Low-CI Feedstock Traceability Critical to SAF Growth, Program Integrity
The U.S. government’s aggressive SAF goals will present challenges to tracking and verifying feedstock sustainability, demanding new solutions to ensure compliance.
The U.S. government has set major goals to ramp up production of sustainable aviation fuel (SAF). According to the plan, by 2050, 100 percent of jet fuel should be sustainable.
In 2021, the federal government announced the Sustainable Aviation Fuel Grand Challenge, a project through which it hopes to produce 3 billion gallons of SAF per year by 2030. To put this in perspective, the entire lipid-based biofuel production complex produced roughly 3 billion gallons in 2022, meaning that the SAF ramp up would double demand for low carbon-intensity (CI) lipids over the next decade. To achieve such an ambitious goal, it outlines investments in innovative solutions, but it also suggests beefing up infrastructure and creating policies to make better use of existing sustainable feedstocks.
In short, between continued growth of on-road renewable diesel and emerging SAF markets, demand for low-CI feedstocks is projected to continue growing rapidly. As the market grows, so will the challenges of ensuring untraceable and unsustainable feedstocks do not work their way into the U.S. biofuel market, robbing consumers and taxpayers of the intended benefits.
Aircraft have unique fuel energy-density needs, which render electricity and hydrogen unviable options to replace fossil fuels in aviation today. As an alternate path to reducing petroleum dependence, SAF can be created from renewable biomass and waste sources.
To reach 3 billion gallons of SAF per year by 2030, SAF production must grow 122 percent each year between now and then. Starting in 2023, one of the first steps outlined by the SAF Grand Challenge Roadmap is to maximize the supply of SAF derived primarily from fats, oils and greases (FOG).
For years, the federal and state governments have been working to incentivize the production and use of biofuels. The federal government offers tax credits based on the volume of biofuel that a producer blends with petroleum. Other incentives include the U.S. EPA’s renewable identification number (RIN) credits and California’s Low Carbon Fuel Standard credits.
To qualify for tax credits and other petroleum-reduction incentives, it’s likely companies will need to produce detailed records to prove the fuel they produce and feedstocks they’re using really are produced along the pathway they claim. Since the collector who sells their oil to a buyer does not determine the final destination of the fuel they sell, it’s in their best interest to comply with all recordkeeping regulations—even those of other states and, sometimes, countries. Failing to do so limits sellers’ ability to access top-product bids. Compliance pays, and at Reiter Software we are building—and constantly adapting—the tools to make it easy.
In the past, industry leaders had understood EPA regulations as requiring companies to share the approximate areas from which they collected oil, rather than exact business addresses. More recently, however, regulators clarified that they are looking for these granular details.
Clean Fuels Alliance America is fighting EPA in court because, under current language, the biofuel producer is responsible for verifying the supply chain, while used cooking oil (UCO) collectors say this is tantamount to giving confidential business data to a competitor (many biofuel producers also have an arm that collects UCO) and are thus resistant to handing over these records.
To address the “need for traceability” dilemma, California Air Resources Board allows records to be provided to third-party auditors rather than counterparties themselves.
In some regards, EPA has allowed biofuel producers to use intermediaries such as third-party auditors to absolve themselves of RIN fraud culpability—a notable example being RIN Quality Assurance Plans.
A QAP-like program for UCO using a combination of Reiter Software data analytics and on-the-ground data validation could provide the defense against fraud the industry is looking for.
Another solution discussed within industry and regulatory circles is the creation of a central-records database protected from private interests but available to law enforcement for fraud detection. Enforcement actions and removal from the supply chain could be collaborative between government and industry.
Reiter Software is dedicated to being part of the solution regardless of how EPA decides to handle this issue and is determined to protect the needs of both UCO collectors and their biofuel-producer counterparties.
Reiter Software’s first-generation Cooking Oil Service Tier software platform has been successful in helping collectors build more efficient routes, easily train and deploy drivers, and maintain the detailed compliance records necessary to comply with data audits since 2018. Throughout this time, we received consistent, ongoing feature-development feedback from 10 growing collectors of various sizes. With their insights and experience, Reiter Software is launching Route Simplified, the next generation in UCO productivity and value-creation software. We recommend getting on the schedule to onboard now, as there is limited availability.
Author: Kristof Reiter
CEO, Reiter Companies