Policies to promote sustainable aviation fuels would interact with existing biofuel policies, mostly by diverting fuels and feedstocks away from surface transportation and towards aviation. 

Singapore Airlines offers the longest current commercial passenger flight. It travels from Singapore to New York and takes 18 hours and 40 minutes. Mercifully, they don’t offer economy seats — it’s premium economy or business only!  During the flight, the plane emits about 2.7 tons of CO₂ per passenger, or about the same as driving a standard gasoline-fueled car from San Francisco to Boston and back.

Batteries and hydrogen potentially could dramatically reduce CO₂ emissions from aviation, but their weight and/or volume make them infeasible at present. Current batteries are 50 times heavier than jet fuel per unit of energy, and they take up 20 times as much space. Compressed hydrogen takes up 6 times as much space as jet fuel. The fuel in a typical long-haul jet (including the Singapore-NYC plane) comprises up to 40% of its weight on takeoff. This leaves little capacity for batteries or hydrogen.

The low energy density of batteries and hydrogen implies that near-term decarbonization of long-haul jets relies on sustainable aviation fuel (SAF). SAFs are liquid aviation fuels derived from feedstocks such as waste oils and fats, crops such as corn, soy, and sugarcane, cellulosic biomass, municipal solid waste, or captured CO₂. SAFs are chemically very similar to fossil jet fuel. They are currently approved to be mixed with conventional jet fuel at levels up to 50%, making them compatible with existing aircraft and requiring no modifications to current fueling infrastructure. 

A Grand Challenge

In 2011, the US Federal Aviation Administration set a goal for US airlines to use one billion gallons of SAF annually by 2018. Actual SAF production fell far short of this target; in 2018 only 1.8 million gallons were produced.

In 2021, the US Federal government launched the SAF Grand Challenge, which set a target of 3 billion gallons annual production by 2030, which would result in SAF comprising about 12% of US jet fuel consumption in that year. At the beginning of 2024, US annual production capacity for SAF was approximately 30.66 million gallons, representing just 0.1% of the current US jet fuel supply. In late 2024, two additional plants came online, generating a significant increase in capacity to about 450 million gallons per year. 

What would it take to reach the SAF Grand Challenge goal?

In an NBER working paper out today, Mengying Wu, Kristen McCormack, Will Scott, Jingran Zhang, Jim Stock, and I  answer that question. 

In the paper, we develop a detailed model of the road and air transportation fuel sectors, including the 12 most common biofuel-feedstock combinations. We use this model to evaluate six alternative policy scenarios designed to achieve the 3 billion gallon SAF target and discuss the estimated emissions reductions, cost effectiveness, fuel-feedstock mix, and cost incidence of each policy.

Two SAF production technologies are currently operational in the US, both based on biofuels: (i) hydroprocessed esters and fatty acids (HEFA) using vegetable oils and waste fats, and (ii) alcohol-to-jet (ATJ) using ethanol made from corn or some other bio feedstock. The three most common road transportation biofuels are ethanol, biodiesel and renewable diesel. Biodiesel and renewable diesel are produced from the same feedstocks as HEFA SAF.

Because currently available SAFs are predominantly biofuels, SAF policy will interact with the tangled web of existing policies that promote biofuels for surface transportation. In the United States, these policies include the Renewable Fuel Standard (RFS), which mandates blending biofuels into the surface transportation fuel supply, federal tax credits (45Z), state-level Low Carbon Fuel Standards (LCFS), and state tax credits. These policies provide subsidies for producers and consumers of biofuels. Depending on the policy, the cost of these subsidies fall on drivers, surface freight shippers, or taxpayers (illustrated below).

Any proposed SAF policy must be developed and assessed in the context of existing biofuel policies. The mix of policies in place help determine the total quantity, as well as the composition by technology and feedstock, of biofuel produced and consumed for surface and aviation fuel.

We have five main findings

First, current policies are insufficient to achieve the SAF production target. Using SAF generates credits in the RFS and LCFS programs, but the value of these credits is insufficient to bring much SAF into the market. In our model, only 60 million gallons of SAF are produced in 2030 under current policy, and a large amount of biodiesel feedstock that could be used for SAF is converted instead to less-expensive renewable diesel, which is used to replace petroleum diesel to satisfy the California LCFS.

In short, the current US policy mix incentivizes the use of biofuels for surface transportation over aviation (as illustrated below).

Second, we find that three alternative policy options to reach the target would all result in similar total emissions and overall economic costs. But they differ in who would bear those costs. The three are:

1. a regulatory change to the RFS that creates a SAF requirement, but does not obligate petroleum jet fuel producers to buy renewable fuel credits (we call this Nested D2)
2. a regulatory change to the RFS that creates a SAF requirement and obligates petroleum jet fuel producers to buy renewable fuel credits (we call this D2 with Aviation Obligation)
3. a clean aviation standard in addition to current policy (we call this Aviation Intensity Standard)

The average cost of reducing carbon emissions with any of these three policies is around $470 per ton of CO₂, which is more than twice the social cost of carbon. These three policy tools would result in slightly higher average economic costs and lower total emissions than the current policy mix (see figure below).

Our cost estimate is based on current models of greenhouse gas emissions from biofuels. These models adjust for the fact that increasing demand for biofuels induces more land to be converted into farmland, which can release large amounts of carbon stored in plants and soil. However, there’s ongoing debate about whether these adjustments are large enough. Such emissions are especially high when forests are cleared in places like Brazil for soybeans or Indonesia for palm oil. Accounting for emissions from higher induced land use would move the dots in the above figure up and to the left.

Our third finding is that replacing all current federal and state biofuel policies with a $15 per metric ton carbon tax on fossil transportation fuels and a $4.41 per gallon SAF tax credit could reduce emissions, reach the 3 billion gallon target, and substantially reduce total policy costs, all relative to the current policy mix. Almost all reductions are a result of reduced demand for fuels.

Fourth, additional policy costs of reaching the target are disproportionately borne by California, which experiences gasoline and diesel price increases of 30-40 cents per gallon under the three policies mentioned above. This occurs because increased demand for SAF outside of California, encouraged by state tax incentives that currently exist in Hawaii, Illinois, Iowa, Minnesota, Nebraska, and Washington, increases competition for bio-based diesel feedstocks and therefore makes compliance with California’s LCFS more expensive. 

Finally, it follows from the first two findings that adding policies to achieve the target is more costly than current policy. The static costs reported in this paper, however, do not account for any technological innovation induced by a durable SAF policy that would spur investment; costs arguably could be driven down further by extensive federal R&D support for advanced low-carbon SAFs, such as SAF produced from captured CO₂, which has low carbon emissions if produced using clean electricity.

Conclusion

Open up an in-flight magazine or read press releases from airlines and you will see an industry that is conscious of the high greenhouse gas emissions from flying. Many companies, including Singapore Airlines, have experimented with adding SAF to their fuel supply. Such voluntary initiatives could potentially support some SAF, but volumes would likely remain small, in large part because SAFs are significantly more expensive than fossil jet fuel and somewhat more expensive than biofuels for surface transportation. For SAF to expand, it will need long-term policy support. Our findings show that such policies would mostly divert biofuels from surface transportation to aviation at somewhat higher cost.

Considering potential innovation is important, particularly because many SAF technologies are still relatively nascent. In surface transportation, recent research indicates that learning-by-doing that drives down costs has been substantial for ethanol but not for bio-based diesel. If using biofuel SAFs can accelerate the technological transition to deep decarbonization (e.g., batteries, hydrogen, or SAF from captured CO₂), and if the induced land-use change effects of biofuels are not too large, then incentivizing biofuel SAFs could perhaps be justified. 

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Suggested citation: Smith, Aaron. “What If We Required Airplanes to Use More Biofuels?” Energy Institute Blog, UC Berkeley, October 6, 2025, https://energyathaas.wordpress.com/2025/10/06/what-if-we-required-airplanes-to-use-more-biofuels/

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