Houston Business Journal: Texas Companies, Projects Soar in Sustainable Aviation Fuel Industry, Report Says
As interest in the production of sustainable aviation fuels grows, Houston companies will have significant roles to play.
A new report released by the Sustainable Aviation Futures North America Congress highlighted facilities producing SAF and renewable diesels, including several created by companies with a Houston presence.
Shortly after the report was released, Houston-based engineering firm McDermott International Ltd. announced a master services agreement with Colorado-based biofuels company Gevo Inc. (Nasdaq: GEVO) to provide engineering and planning services for multiple SAF plants across the nation, with the first one to be located in South Dakota.
Companies with a Houston presence named in the report include Chile-based HIF Global, which tapped London-based chemicals company Johnson Matthey and North Carolina-based Honeywell (Nasdaq: HON) for its planned SAF plant south of Houston. HIF, which has its U.S. headquarters in Houston, said the plant would produce over 11,000 barrels per day of SAF. The company received permitting approval from the state of Texas in May.
Other Texas-based projects include Sacramento, California-based Infinium’s multiple planned projects to develop electrofuels, which are made using renewable energy, hydrogen and recycled carbon dioxide for heavy transport sectors.
The abundance of renewable electricity and CO2 emissions in the Lone Star State were factors that brought Infinium to Texas for its projects. Infinium has already struck partnerships with Amazon.com Inc. (Nasdaq: AMZN) as a customer for its fuels and signed a deal with Plano, Texas-based Denbury Inc. (NYSE: DEN) — which will be acquired by Spring-based Exxon Mobil Corp. (NYSE: XOM) — for a potential Brazoria County e-fuels plant.
Meanwhile, Houston-based Next Renewable Fuels has made acquisitions in Oregon, where it plans to build a $2 billion biofuels refinery. The project has faced local opposition as it works its way through Oregon’s permitting processes.
Next received investment from United Airlines Ventures, the venture fund of Chicago-based United Airlines (Nasdaq: UAL), which also has a significant presence in Houston. United Airlines Ventures launched a $100 million fund targeting investments in new technologies related to alternative fuels.
Outside of highlighting companies, the report also named five challenges that companies must overcome to meet 2050 production goals. Those challenges include high prices — SAF is currently three to six times more expensive than conventional jet fuel — and low availability. Others include the slow scaling of SAF production technologies, the need for long-term policy support, and the availability of low-carbon feedstock such as fats, oil and greases needed for production.
One policy initiative that has been touted for the SAF industry in the United States is the August 2022 Inflation Reduction Act, which includes a SAF blenders tax credit that helps address the price gap between conventional jet fuel and SAF.
The U.S. Department of Energy, Department of Transportation and Department of Agriculture have collaborated to establish the Sustainable Aviation Fuel Grand Challenge, which targets the production of 3 billion gallons of SAF by 2030 and 35 billion gallons by 2050. The roadmap details six action areas to expand SAF supply and use, including policy analysis, feedstock innovation, and supply chain construction.
Originally published on The Houston Business Journal.
