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New $800M sustainable aviation fuel
plant planned for Washington state
By Dominic Gates
May
18, 2023
![](images/images_05_24_2023/pic6%20copy.jpg)
Amer Halilovic, working as a
fueling agent, pulls a hose back to a hydrant cart (at right) after
refueling an Alaska Airlines jet at Sea-Tac International Airport on
Jan. 10, 2020. Dutch company SkyNRG has announced plans... (Ellen M.
Banner / The Seattle Times)
The legislation “positions Washington state as the most attractive,
most supportive state for SAF,” he said. “It’s the most generous state
in the nation now.”
SkyNRG has been studying several potential locations in the state but
Lecamp declined to identify them pending full “engagement” with the
local communities. “We want to make sure that we’re a good neighbor,”
he said.
The project to produce about 90,000 metric tons of SAF per year, about
30 million gallons, will require a huge investment of between $600
million and $800 million, he added.
Lecamp said he’s confident SkyNRG will nail down the equity and debt
financing to cover that as the global aviation industry mounts a big
push to reach net zero carbon emissions by 2050 — with large-scale SAF
production accounting for fully 65% of the planned reduction.
“We see these technologies as being absolutely essential for the
ongoing development of the aviation industry in terms of 2050
targets,” Lecamp said. “We have confidence that they can be financed.”
“There is capital available, even in the current macroeconomic
situation,” he added. “There is a willingness to provide the capital.”
A bill sponsored by state Senate Majority Leader Andy Billig,
D-Spokane, creates tax credits that will provide subsidies of up to $2
per gallon for SAF, which is 2 to 5 times more expensive than regular
jet fuel that currently costs about $2.17 per gallon.
A separate bill will accelerate permitting and environmental review
for construction of clean energy plants.
“This is what we hoped would happen,” Billig said Thursday. “It’s
rewarding to see this bill pay dividends for the state so quickly.”
Enormous challenge to produce enough SAF
For Wednesday’s aviation sustainability conference in Renton, Boeing
brought together leading representatives of airlines, Wall Street
financiers, global aviation regulators and government policymakers to
discuss the challenge of aviation meeting its goal to decarbonize by
2050.
Aviation today contributes about 2.5% of worldwide carbon emissions, a
relatively small percentage but one expected to grow as air travel
expands around the globe.
Because of the huge energy intensity required to haul hundreds of
people safely across the skies, flying is one of the most difficult
modes of transportation to decarbonize.
Electric batteries to power bigger airplanes are impractical, as
they’d be too heavy.
The industry’s plan for net zero by 2050 includes switching out older
planes flying today for much more efficient ones and eventually coming
up with electric, hybrid-electric and hydrogen-powered alternatives
for smaller airliners.
However, the bulk of the reduction is planned to come from using SAF,
a hydrocarbon fuel that performs exactly like the kerosene-based fuel
in current jet engines but is sourced from a variety of renewable
feedstocks instead of from fossil fuels.
This transition to decarbonized flying will be costly, as air
travelers will discover in the years ahead, because SAF is expensive
to produce.
Willie Walsh, director general of the International Air Transport
Association, or IATA, warned via video conference from Geneva on
Wednesday that airlines will have to pass along the extra cost of SAF
in higher ticket prices.
Before we get there though, the biggest issue is that, after years of
talk about developing SAF, there is precious little actually produced.
Dutch company SkyNRG has chosen Washington state to locate a major new
biogas plant that will produce sustainable aviation fuel — a key part
of the airline world’s push to decarbonize flying.
In an interview Wednesday on the sidelines of a Boeing
conference on aviation sustainability in Renton, SkyNRG CEO Philippe
Lacamp said he expects the plant to be operational by 2028 or 2029.
Its construction will provide about 600 jobs, and running it
thereafter will provide about 100 permanent new jobs, he said.
Previously SkyNRG, which has its U.S. office in Bend, Oregon,
had said it was looking for a location somewhere in the Pacific
Northwest. Lacamp said new state legislation signed this month by Gov.
Jay Inslee that provides sustainable aviation fuel, or SAF, subsidies
and speeds permits for plant construction tip the scale for
Washington.
Last year, less than 0.1% of the fuel used in airplanes
worldwide was SAF. Just two producers supply SAF commercially in the
U.S.
World Energy and Neste last year provided less than 16 million
gallons of SAF made from cooking oil and animal fats to Los Angeles
and San Francisco airports. That was the total U.S. production.
For perspective, United Airlines Chief Sustainability Officer
Lauren Riley said United uses 4 billion gallons of fuel a year.
The White House has set goals to produce 3 billion gallons of
SAF per year by 2030, and 35 billion gallons per year by 2050.
Going from almost nothing to producing the required quantities
of SAF is daunting.
“We recognize that this is going to be incredibly challenging,
but it is achievable,” IATA’s Walsh told the conference. “And we are
absolutely determined to do everything we can to achieve that goal.”
Chris Raymond, Boeing’s chief sustainability officer, said in
an interview that failing to produce SAF at large scale could stunt
the growth of aviation as governments impose limits on carbon
emissions.
“That is the threat that sits out there,” Raymond said.
Boeing is using its clout to try to get movement. It partnered
with SkyNRG specifically by committing in 2021 to the advance purchase
of SAF from its facility here for use in Boeing flight tests and other
operations.
Boeing also lobbied in Olympia for the passage of the clean
energy bills to support SAF production.
And Raymond said Boeing union leader Jon Holden, District 751
president at the International Association of Machinists, played a
strong role in convincing the Legislature to support the bills.
SkyNRG’s ambitions
Nascent industry that it is, SAF production is now being
boosted to life by government support in Europe and the U.S. — with
California and now Washington leading the way here.
Several different chemical mechanisms are being developed to
produce the fuel from various carbon sources, which are referred to as
“feedstocks.”
Production from used cooking oil and fats is the most
established pathway, but scaling that to the required levels has
limits. As Angela Wilkinson, CEO of the World Energy Council, put it,
“There’s only so much fried chicken people can eat.”
Since its founding in 2009 — spun off from a study done for
Dutch airline KLM, which is a shareholder in the company — SkyNRG has
been focused entirely on developing SAF technology.
Yet it is essentially still a startup, with only about 50
employees and just three of those in the U.S.
Still, it has partnerships with Boeing and with major airlines
and it has huge ambitions.
In Holland, Lacamp said it is closing in on a final investment
decision on a plant producing SAF via the used oils and fats pathway.
But the one it plans for Washington state will use a different
chemical pathway: It’s dubbed “alcohol-to-jet” and consists of
fermenting carbon waste to produce ethanol that is then converted to
fuel.
The feedstock will be waste gases, chiefly methane, derived
from agricultural or municipal landfill waste.
“Think around dairy farms, for example,” Lacamp said.
Yes, he means cow farts and cow manure. “It can be captured
under canopies. There’s all sorts of ways dairy farms find of
capturing biogas,” he added.
Even more ambitiously, SkyNRG plans another plant in Holland
using a third, different pathway — the greenest SAF of all — called
“power-to-liquid,” which uses renewably sourced electricity to produce
“green hydrogen” that is then combined with carbon dioxide captured
from the atmosphere to produce fuel.
These latter two SAF pathways are new and in development.
They’ve been shown to work in a lab but have never been used on an
industrial scale.
“We are a novel technology and that comes with a level of
risk,” Lecamp said. “Matching the capital with the appetite to accept
a level of risk which is higher than what you now see in wind turbines
and solar farms, that is more challenging.”
For investors to take that risk with a huge amount of capital,
they must be convinced of a long-term market for the SAF product.
It will require more than noble declarations of intent from the
aviation industry.
Joe Shanahan, managing director, head of aviation at investment
bank Citi, said investors will hesitate until airlines step up and
sign long-term contracts to buy the fuel, despite the premium price.
The Washington state per-gallon subsidy could prove critical
for that to happen.
In 2021, Alaska Airlines agreed to work with SkyNRG and Lecamp
said it’s “one of many airlines keen to take part” by committing to
buy SkyNRG’s SAF.
All the larger airlines flying out of Seattle-Tacoma
International Airport, including Delta and Southwest, could equally
have an interest in locally produced SAF.
The future of aviation is being gambled on this technology
play. Lacamp estimated that 750 SAF plants will have to be built at
enormous cost to meet the capacity targets of just the U.S. and the
European Union.
The one planned for Washington state will be leading edge, he
said.
“When you’re doing the first-of-a-kind facility, you’re going
to learn a lot,” said Lecamp, adding that the lessons will then be
applied to replicate similar plants around the world.
“From the very beginning, this company has been focused on
sustainable aviation fuel,” Lecamp said. “We understand the feedstocks.
We understand the technologies. We know that it has to happen for
aviation to reach its 2050 net zero target. And we’re all in on that.”
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
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