Port of Seattle

Sustainable Aviation Fuel

Strategic Plan

Background

Historically the Port of Seattle (Port) has been a leader in supporting research and development of

sustainable aviation fuels (SAF), as a founding member of Sustainable Aviation Fuels Northwest (SAFN).

With the support of regional partners, the Port shifted towards a market development role in 2015, and

began exploring what the Port could do to support SAF infrastructure development, and build demand

at Sea-Tac Airport.

The Port demonstrated its leadership in market development with the release of two reports in 2016

and 2017. The first report was done in partnership with Alaska Airlines and Boeing, and evaluated how

best to integrate SAF into the airport’s fueling infrastructure. The second report was done in

partnership with the Rocky Mountain Institute and SkyNRG, and explored innovative airport funding

mechanisms that could be used to help lower the incremental cost between SAF and conventional jet

fuel. The information contained in these studies sets the foundation to help the Port of Seattle take the

next step toward the goal of making SAF cost-effective and practical for airlines at Sea-Tac.

In December 2017, a Motion was passed by the Port Commission that contained specific SAF goals, and

directed staff to develop a SAF Strategic Plan to meet those goals. Subsequent to the Motion, a

Memorandum of Understanding (MOU) was executed in Q2 2018 between the Port and sixteen (16)

airlines/airlines groups operating at Sea-Tac Airport, formalizing a commitment between the parties to

work together to develop a separate MOU Committee-specific strategic plan to reach the Commission’s

goal.

The strategies outlined below identify where the Port or other partners may play a lead role in

implementation, and where the work of the MOU Committee intersects with the broader strategy of the

airport. Many of the actions and milestones within the strategies will become more detailed and

developed as research is completed and options are evaluated.

State of the Industry

Since 2009, ASTM has approved five alternative jet fuel production pathways.

The five approved

alternative jet fuel types represent four different processes associated with various feedstock types:

Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK) which converts syngas (from biologic or

http://www.caafi.org/resources/faq.html

Item No. 8b attach_1

Meeting Date: July 24, 2018

petrochemical sources) to jet fuel components; Hydroprocessed Esters and Fatty Acids (HEFA-SPK) from

plant and animal oils; Hydroprocessed Fermented Sugars to Synthetic Isoparaffins (HFS-SIP) made by

microbial conversion of sugars to hydrocarbons; FT-SPK with aromatics (FT-SPK/A) from various sources

of renewable biomass such as municipal solid waste, agricultural wastes and forest wastes, wood and

energy crops; and Alcohol-to-Jet Synthetic Paraffinic Kerosene (ATJ-SPK) derived from isobutanol from

multiple feedstocks.

More than a dozen airlines have signed ‘off-take’ agreements (contractual obligation for SAF volume at a

specific price when it’s produced) with producers, but only one of these agreements (United Airlines and

AltAir Fuels) has resulted in commercial-scale, regular production.

To date (mid-2018), only one commercial SAF production facility exists in the world. This facility, owned

by AltAir Fuels in Paramount, California, is a retrofitted petroleum refinery that now makes renewable

diesel and renewable jet fuel from waste oils and animal tallow (HEFA-SPK pathway). While there have

been several SAF demonstration flights throughout the world over the past several years, the fuel for

the majority of these flights has come from ‘batch’ productions and not commercial-scale facilities. In

total, the present-day regular production of SAF worldwide is less than 4 million gallons per year,

compared with 20 billion gallons per year of petroleum jet fuel consumed in the U.S. alone.

Some ‘batch’ scale but semi-regular production in the world comes from Total (headquartered in

France), who convert Brazilian sugarcane to jet fuel for some of Airbus’ factory delivery flights from

Toulouse, France to the purchasing airline’s home airport.

There are several reasons why the AltAir facility in California has reached commercial scale production,

while others have not. The presence of a shuttered refinery 16 miles from LAX helped reduce capital

costs and permitting obstacles. The policy environment for low carbon fuels (largely supported by

California’s Low Carbon Fuel Standard, or LCFS) allowed the producers to capture financial benefits to

bring down the price of renewable diesel (an important co-product with HEFA-based SAF production)

and SAF to a lesser extent, for end users. And finally, the availability of waste oils and feedstocks near a

large population center, combined with a proven fuel conversion technology, allowed the production

facility to succeed. While this is not an exhaustive list of the success factors of this facility, it highlights

the most critical elements, and those that are relevant to our challenges at SEA.

It is the aim of this plan to describe specific strategies Sea-Tac Airport and the Port of Seattle can

implement to help create these same types of stable incentives, policies, feedstock availability,

partnerships, and research and development support to help additional commercial production scale

facilities come on-line. The strategies outlined in this SAF Strategic Plan reflect the most effective

policies and approaches found around the world (e.g. AltAir Fuels in California, Scandinavian airports)

that have helped build or support a SAF market. Specifically, these strategies are designed to work

together to support an aggregated market signal and facilitate the development of a local SAF supply

chain.

1.0 Goals

The goals outlined by the Commission in their December 2017 Motion are as follows:

• By 2028, 10 percent of jet fuel available at Sea-Tac will be produced locally from sustainable

sources.

• By 2035, 25 percent of jet fuel available at Sea-Tac will be produced locally from sustainable

sources.

• By 2050, the maximum blend currently approved for jet fuel will be produced locally from

sustainable sources.

Currently, Sea-Tac Airport dispenses approximately 600 million gallons of jet fuel per year, and this

amount is likely to grow to between 700 and 800 million gallons in the next decade. To put these goals

in context, the 2028 goal is equivalent to approximately 75 million gallons of ‘neat’ or pure biojet fuel, or

about fifteen to twenty times (15-20x) the current total world-wide production volume.

This volume would require at least two (2) new or co-located dedicated biofuel refineries to meet the

goal. Given the pace of permitting, securing feedstock, securing capital, etc., this is considered an

ambitious target, particularly if the fuel is to be produced locally.

To achieve these goals, the Port will implement four key strategies, as described in detail below.

2.0 Strategies

1. Create an airline-airport cooperative model to aggregate demand and address infrastructure

needs

2. Develop and/or support specific local, state and federal policies that incentivize SAF use and in-

state production

3. Obtain FAA support (approval) to use airport funds and/or grants toward SAF co-benefits

4. Enhance awareness of, and support for SAF use

These strategies are described in detail below.

2.1 Airline-Airport Cooperative Model

Purpose:

The incremental cost between SAF and petroleum Jet A is the most significant barrier to market growth

and development. Estimates of SAF incremental cost do not typically include the costs to build and

integrate a local supply chain and fueling infrastructure, which can be substantial. Airports in Europe

have helped send a SAF market signal by bringing these costs down through participation in partnership

funds among airlines, governments, corporations, etc. A cooperative model is an agreement among an

airport, airlines, and possibly other parties to aggregate funds and/or demand to send a SAF market

signal.

Context:

While several airlines have signed “off-take” agreements (contractual obligation for SAF volume at a

specific price when it’s produced) with producers, airports in the U.S. can’t play a role in direct fuel

purchases or off-take agreements. Instead, airports must look for other ways to promote cost-effective

access to SAF.

Some airports in Europe have turned to cooperative, or ‘partnership’ funding models. These partnership

funds typically aggregate contributions from the airport, government, airlines, and corporations. For

example, at Oslo Airport, such a collaborative fund has purchased ~ 150,000 gallons per year of neat

biofuel in batches since 2016. SkyNRG, who partnered on the innovative funding study for Sea-Tac, has

also helped create a Fly Green Fund for airports in Sweden. In this model, airlines such as SAS and KLM

pay for the administrative costs of the fund so that contributions from corporate and individual flyers

can be allocated to the premium cost for SAF and support local production projects.

This Strategic Plan defines ‘cooperative model’ broadly, to allow for stakeholder input in its

development. Sea-Tac seeks to work with airlines to develop a cooperative model or partnership fund

that meets the needs of all contributing partners (Port, airlines, corporations), provides equitable

benefits, offers transparency in its structure and governance, and provides cost-effective access to

sustainable fuel. The Port expects to hire consultants with expertise in fund development who

understand the legal and accounting principles that would provide assurance to any fund contributors

that the funding structure meets their needs.

This cooperative model is not intended to replace airlines’ efforts to obtain SAF, but to aggregate

demand. This effort seeks to find a system that complements existing airline efforts and provides equal

access to benefits for all airlines whether they have a large or small presence at the airport.

Like other fund models, the intention is to use the bulk of the commitments and funding for fuel, but

some percentage of funds could be allocated to local supply chain and infrastructure development.

However, it is critical to find or develop a model that works in the U.S. context, and might not be an

exact replica of European models.

Key Milestones:

• 2018: Explore airline-airport cooperative models or partnership funds from other regions

(Airline-Airport MOU Committee)

• 2018-2019: Develop a “made by airlines for airlines” approach/partnership fund, and issue

Request for Proposals (RFP) for consultants to develop structure (Airline-Airport MOU

Committee)

• 2020: Cooperative model operational (Port staff)

• 2021: Partner commitments finalized (All Partners)

• 2021-23: Market signal leads to SAF production commitments

2.2 Policy Support

Purpose:

The Port seeks to develop and/or support local, state, or federal policies that incentivize SAF use and in-

state production facilities. Importantly, the Port seeks to find ways to create a level playing field with

California, such that policies in Washington create an economic equivalency with California’s Low

Carbon Fuel Standard and Cap and Trade regulations.

Context:

Several regional, state, national, and international-level policies can influence SAF production and cost-

competitiveness. It is critical to the success of a Port strategy to understand all of these mechanisms and

determine which approach is likely to be most successful in:

• Developing a stable and reliable market for SAF production in WA state

• Reducing greenhouse gas emissions

• Harmonizing cost/incentive levels with those of California and/or Oregon

• Having the support of many Port-related businesses and industries

Analysis conducted by Port staff and regional partners suggests that a Clean Fuel Standard (aka Low

Carbon Fuel Standard) similar in design to California’s is the most likely to meet these criteria. Therefore

the milestones outlined for this strategy focus on harmonization with California’s regulation. However,

additional incentives to attract production facilities to the region via tax incentives or other mechanisms

will also be pursued where possible.

Key Milestones:

• 2018: Build WA LCFS campaign with partners; Support tax incentives for in-state bio-

refineries/SAF facilities (Port Commission & Staff)

• 2019: Support WA LCFS (with opt-in for SAF) if carbon pricing mechanism not passed in 2018;

Identify production barriers and recommend further state legislative actions (Port Commission

& Staff)

• 2020: Continued support for carbon pricing mechanisms equivalent to California

2.3 Approval for SAF Co-benefits Expenditures

Purpose:

Airports routinely use their revenues and are granted federal funds to support projects that reduce air

pollution. Similarly, airports could use federal grants or airport revenue to pay for the “co-benefits” of

SAF to help reduce the incremental cost in a way that is consistent with current federal policy. This

approach has not yet been approved by FAA. Research being conducted by FAA’s Aviation Sustainability

Center (ASCENT) and other research teams has demonstrated air pollutant reductions when SAF is used.

Sea-Tac Airport aims to quantify these benefits in a manner that is consistent with other air pollution

reduction investments, and obtain FAA approval to use airport revenue and/or federal grants towards

this benefit.

Context:

Airports cannot directly pay for aircraft fuel. Among other restrictions, public dollars cannot fund a

commodity used by a for-profit private firm. However, airports can purchase services that support

airport performance goals such as cleanliness (custodial contracts) or clean energy (renewable energy

certificates). Besides offering lower life-cycle carbon emissions, SAF usage lowers direct emissions of air

pollutants (such as sulfur and particulate matter) and supports regional economic development through

locally sited supply-chain elements. We term these environmental and social benefits as ‘co-benefits.’

An airport could theoretically purchase these co-benefits in the same way that vendors provide services

without a transfer of physical ownership. Additionally, airports are already in the business of providing

services that offer air quality benefits and cost savings to airlines in the form of pre-conditioned air at

the gate, or infrastructure to plug in electric ground support equipment. In order to qualify spending on

co-benefits, robust science quantifying these co-benefits, and agreement by FAA, who regulate airport-

qualified spending, must be established.

Key Milestones:

• 2018: Identify specific particulate matter (PM) and sulfur emission reduction co-benefit values

and present to FAA (Port Staff)

• 2019: Work with FAA (with support from research teams) to gain approval to use airport

revenue and/or VALE grants toward SAF co-benefits (Port Commission & Staff)

• 2020: Sea-Tac Airport contributes revenue to Partnership Fund (Port Commission)

2.4 Education & Advocacy

Purpose:

Public perception regarding new production facilities in WA is considered by SAF producers to be a

barrier equal in magnitude to the imbalance of carbon policies between WA and CA. There are also

many misconceptions about the volume of SAF currently in production, as well as the benefits they

provide. A robust education and advocacy approach to audiences critical to SAF acceptance is necessary

to increase local production.

Context:

Due to the low production and use of SAF, it is assumed general awareness of the fuel, policies,

technical research, and airline adoption of SAF is relatively low. Given the complexity of developing local

production facilities, an education and advocacy campaign is needed across several audiences to gain

support for SAF facilities, partnership funds, or policies cited in this strategic plan. These campaigns will

focus on key messages to build understanding in the following categories:

General Public:

• Basics of SAF and its benefits

• Production facility size/scale and impacts to community

• Policies needed to increase SAF use

Politicians:

• Basics of SAF and its benefits

• Impact of air travel on climate and air quality

• Policies needed to increase SAF use and create jobs

Businesses:

• Impact of business travel on climate and air quality

• Policies needed to increase SAF use and create jobs

• Benefits of SAF to business interests and sustainability reporting

Key Milestones:

• 2018: Develop specific messaging for policy maker, businesses, and general public/airport

community audiences and complete the “SAF 101” slide deck in partnership with Public Affairs;

For specific policy outreach, see Strategy 2.3 (Port staff)

• 2019: Identify key audiences, and opportunities to present SAF 101 information (Port staff)

• 2020: Continue to identify audiences and outreach opportunities (Port staff)

3.0 SAF Strategic Plan Timeline

The timeline below shows the schedule for each strategy and related milestones identified in Section 2.0.

Strategy

2018

2019

2020 2021 2022 2023

Airline-Airport

Cooperative Model

Sign MOU

Evaluate other

cooperative

models in Europe

and assess options

for SEA

Issue RFP to

develop

cooperative

model structure

Develop model/fund structure;

Outline of model/fund structure to

Commission for approval

Select 3

party operator for

model/fund

Model/fund

operational.

Signed

commitments

send market

signal to

producers

Longer-term

commitment to

develop SAF

facility in-state

Producer

identifies

location and

seeks capital

Producer

continues to

pursue funding

and location

options

State Policy

Support

Present to House

Transportation

Committee;

support any

carbon legislation

that provides SAF

incentives

Monitor & support legislation that

provides equivalent or better

incentives for SAF than neighboring

jurisdictions (California in particular)

Support LCFS approach; Industry

Day in Olympia

Federal Policy

Support

Meet with FAA

and present

white paper of

co-benefits

Seek FAA

approval to use

airport revenue

toward co-

benefits

Receive FAA

approval to use

airport revenue

for SAF co-

benefits

SAF Co-benefit

Quantification

Literature review

Begin development of SAF pollutant

reduction co-benefits white paper

Review and

finalize co-

benefits white

paper

Adjust co-benefit

values as new

science emerges

Education &

Outreach

Develop communication tools and

outreach strategy for politicians, local

leaders, environmental NGOs, etc

Adjust

communication

strategy as

necessary based

on policies,

producers, etc

Implement communication and outreach strategy

Develop

outreach

strategy for

communities

neighboring

production

facility