7a supp
Item No. 7a_Supp Date: August 15, 2017 Sustainable Aviation Fuels Program Update Stephanie Meyn August 15, 2017 1 Sustainable Aviation Fuel Program 2008-2014 Port is early supporter of research & development 2015-present Port shifts to a Market Development role exploring: How to support fuel integration & infrastructure How to help with incremental cost of fuel How to help incentivize biofuel production in WA The Port's role is expanding to support sustainable aviation fuel market development How Are Aviation Biofuels Produced? Hydroprocessed lipids (HEFA) Only one in commercial Fischer Tropsch (FT & FT/A) production Alcohol to Jet (AtoJ) Biochemical sugars (HFS) 15 additional processes going through approval including HEFA+ Five aviation biofuels pathways approved, only one is in commercial production 3 State of the Market Only one in commercial production Image courtesy: CAAFI Dozens of off-take agreements signed. Only one facility is in production 4 State of the Market - cont'd Image courtesy: CAAFI State of the market will only improve with stable & reliable feedstocks, technologies, policies, and end markets 5 First refinery on-line in 2016 AltAir Facility in Paramount, CA First dedicated US production facility for HEFA and renewable diesel fuels Repurposing of shuttered refinery Tallow feedstock initially The first aviation biofuel facility in the U.S. took many years to get to production 6 AltAir Facility Context Capacity is 40 M gallons Only 2 M gallons per year of bio-jet, which could increase to 4M Remainder (38 M gallons) is renewable diesel for on-road transportation Bio-jet = <1% of total Jet-A use at LAX Market dynamics dictate how much jet fuel vs other products to make at a facility 7 AltAir's Successful Ingredients Low Carbon Fuel Standard renewable diesel price Federal and state grants Off-take agreement (renewable jet fuel) Shuttered refinery Availability of feedstocks Sales of high value co-products Some of the successful ingredients are in WA, others are not 8 Regional Roadmap to Aviation Biofuels Production If SEA wanted bio-jet in the next 1-5 yrs, it would have to come from non-food oil crops grown outside WA 9 Innovative Funding Study - Scope What role the Port of Seattle could play in: Covering the incremental cost of sustainable aviation fuels Incentivizing or financing sustainable aviation fuel infrastructure Innovative Funding Study explored support for fuel costs and infrastructure costs European Model for Airport-based Biofuel Program Airlines Airport Corporations European airports along with airlines and corporations have supported aviation biofuels together Financial Mechanism Evaluation Developed list of 14 possible fund sources Evaluated based on revenue potential and feasibility o legal considerations o ease of implementation o airline impact o neighboring community impact o other stakeholder impacts Financial mechanisms were evaluated based on their revenue potential and feasibility Biofuel Co-Benefits Airport Precedent Pre-conditioned Air Quality Air Core Mission of Economic Development Port Renewable Energy Climate Credits (RECs) Reputation License to Operate and Grow While airports can't buy fuel directly, they might be able to use funds to pay for the fuel's co-benefits Most Viable Funding Sources To achieve a 1% blend, a combination of four funding sources needed: 1) Corporate Funding Program 2) Tax Levy Requires FAA approval: 3) Non-Aeronautical Revenue 4) Aeronautical revenue The most viable funding sources include a combination of Airport and non-Airport Revenue streams Possible Options for Port Partnered approach 1% blend ($7 M/yr) paid for via central fund from multiple sources; work with airlines & partners to approach FAA Larger investment by Port 1 to 5% blend ($7 - 30 M/yr) paid for with Port mechanisms Legislative-focused approach Market signal is sent via a WA-based Low Carbon Fuel Standard 15
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