LINCOLN, Neb. (DTN) -- It has been just one year since the formation of a partnership to create what is the nation's first large-scale sustainable aviation fuel value chain in Minnesota, and a Delta Airlines representative said on Monday that the partnership was just the beginning.
Part of that partnership includes building what is believed to be the nation's first SAF blend facility in Minnesota.
Jeff Davidman, vice president of government affairs for Delta Airlines, said during the Agricultural Outlook Forum in Kansas City, Missouri, that the Minnesota project is helping all parts of the future SAF value chain to learn what works.
Davidman described the Minnesota hub as "like an incubator program for one state, looking all the way from the farm, all the way to the plane, and everything in between, from a value-chain standpoint, to try to answer those difficult questions, not because Minnesota is the only place where we can do it, but it's a place where we can start, and then we can take that and learn again."
The partnership in Minnesota recently announced several accomplishments in the past year. That partnership includes Bank of America, Delta, Ecolab, Xcel Energy and others.
Flint Hills Resources in collaboration with Delta is in the early stages of developing a facility to blend up to 30 million gallons of unblended, or "neat," SAF at its Pine Bend refinery in Rosemount, Minnesota.
Neat SAF is produced using renewable feedstocks to produce drop-in jet fuel. Current standards allow 50% neat SAF to be blended with Jet A fuel.
According to a news release from the partnership, work on the facility is expected to be completed in the fourth quarter of 2025. The facility is expected to be the first SAF blending plant between the coasts, and Shell is expected to supply the SAF.
Blended jet fuel will be delivered via Flint Hills' existing pipeline to the Minneapolis-St. Paul International Airport -- Delta's second-largest hub, according to the partnership.
A so-called "demand consortium" that includes Bank of America, Deloitte, Delta and Ecolab was formed to purchase the first several million gallons of SAF each year in Minnesota, with purchases anticipated to start in the fourth quarter of 2025.
GROWING MARKET
The goal of that consortium is to scale production, drive down costs and secure multiyear demand that spurs continued growth of the SAF market, according to the news release.
The companies are providing funding to support the market production of SAF. That effort is expected to contribute to verified carbon emission reductions associated with employee business travel in the companies.
On Aug. 16, 2024, the Federal Aviation Administration announced a $16.8 million Inflation Reduction Act grant to convert an existing Gevo ethanol and isobutanol plant in Luverne, Minnesota, into a fully integrated alcohol-to-jet-fuel facility for SAF production. This will allow the first conversion of Minnesota crops to SAF.
In addition, the University of Minnesota is developing a winter camelina seed to enable more oil production to produce SAF. Montana Renewables LLC, a SAF producer in Great Falls, Montana, has been actively supporting the hub's work to bring the first shipment of camelina-produced SAF to Minneapolis-St. Paul this fall, according to a news release.
IRA TAX CREDITS
Davidman said the tax credits created in the Inflation Reduction Act to help stimulate the industry -- the 40B and 45Z tax credits -- have been helpful, but both tax credits end after just two years.
"The problem with the Inflation Reduction Act is it is just too short a time," he said, adding, "What I'm hearing is it just needs more time certainty to it."
States such as Minnesota, Illinois and Nebraska have also each passed separate state tax incentives that Davidman said will help ensure SAF production is developed in the Midwest.
Davidman also pointed to complaints raised by farm groups and biofuel producers about the requirements set for 40B feedstocks and the potential 45Z rules.
"They need some additional work to make sure that Midwest feedstocks can be used," he said.
DELTA DEMAND
The Minneapolis-St. Paul airport is Delta's second-largest hub and requires 250 million gallons of jet fuel annually to operate there.
Davidman said Delta is working on SAF policy around the country as the airline pushes to be carbon neutral by 2050. In meeting that goal, 70% of Delta's carbon footprint reduction needs to come from SAF.
Delta is already blending some SAF fuel for planes flying out of California.
"We know it works today," he said. "It's in our planes. We're using it."
The difficulty, though, is ramping up the volume for the industry.
The U.S. last year produced 25 million gallons of SAF. Globally, this year there is 600 million gallons of SAF production expected. But Delta alone uses 4 billion gallons of jet fuel. The airline has a goal of blending 400 million gallons by 2030, Davidman said.
"We want this. We need this to get to our goals."
DTN Ag Policy Editor Chris Clayton contributed to this story.
Todd Neeley can be reached at todd.neeley@dtn.com
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