The California Air Resources Board (CARB) has announced a new initiative to nudge major airlines to transition to sustainable aviation fuel.
The goal of the new program is to ramp up sustainable aviation fuel use in California airports to 200 million gallons by 2035. Based on CARB estimates, the goal would meet about 40% of current intrastate demand and represent a tenfold increase from current levels of sustainable aviation fuel usage.
Sustainable aviation fuel made from renewable biomass and/or waste has been proposed as a significant step forward for major U.S. airlines targeting net-zero carbon emissions in the decades ahead. By issuing state-level requirements, CARB is also opening the door for pushback from other states.
For renewable fuel investors, the potential impact of the new effort could have a massive impact. California leads the nation in air travel by a wide margin with 214 airports.
For companies like Darling Ingredients DAR and Valero Energy VLO who are active in the sustainable aviation fuel sector, the push to ramp up capacity to meet this fresh demand will be significant. Both firms recently announced new contracts to supply sustainable aviation fuel for delivery to both Midway International Airport in Chicago and John F. Kennedy International Airport in New York.
The Department of Energy reports that production capacity of sustainable aviation fuel in the United States could increase from around 2,000 barrels per day to nearly 30,000 barrels per day in 2024 if all announced capacity additions come on line.
Two massive projects — the Phillip 66’s facility in Rodeo, California and the Diamond Green Diesel facility in Port Arthur, Texas — are expected to account for the lion’s share of this growth.
While the industry group Airlines for America estimates that jet travel accounts for only 2% of U.S. carbon emissions, the organization’s member pledge to achieve net-zero emissions by 2050 has made it a highly visible voice.
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