In the pursuit of sustainability in aviation, the Minnesota Sustainable Aviation Fuel Hub is at the forefront of a transformative movement. Led by CEO Peter Frosch, this initiative aims to significantly influence the broader adoption of SAF across US airlines while fostering collaboration between public and private sectors.
As Delta Air Lines becomes an anchor partner, committing to the purchase of SAF for blending in Minnesota, the Hub embodies a blueprint for scaling production while addressing critical challenges such as supply constraints and cost differentials with traditional jet fuel. We talked to Peter about the strategic partnerships, economic implications, environmental benefits, and overarching vision that the GREATER MSP Partnership has for making sustainable aviation a mainstream reality.
How do you see the Minnesota SAF Hub influencing the broader adoption of sustainable aviation fuel across US airlines, and what role does collaboration between public and private sectors play in this effort?
Delta Air Lines is an anchor partner of the Minnesota SAF Hub. Delta has purchased the initial shipment of SAF to the blending facility in Minnesota that was just announced. In the future, SAF will be available to any other airline serving MSP Airport. In such a nascent market, the success of an effort like ours can be a powerful way to map the future, showing how the market can grow while also meeting decarbonization, economic development, and providing other environmental benefits. To meet goals set by the US Department of Energy, SAF production would need to increase from less than 10 million gallons in 2020 to over 3 billion gallons in 2030.
To establish a SAF economy, public/private partnerships are necessary to share the risk and the cost. In Minnesota, a coalition of institutions who all see a way to win in a future where SAF is big in our state have come together to form the Hub.
What are the key challenges in scaling SAF production to meet the growing demand from airlines, and how is the GREATER MSP Partnership addressing those hurdles?
What we have learned over the past year since we formed the Minnesota SAF Hub is that the demand for SAF far exceeds the supply. The cost of finished SAF is currently $6-$9 more per gallon than regular jet fuel. Establishing a SAF economy requires incentives from multiple sources all at once. In Minnesota, we have state subsidies, federal subsidies and private subsidies. We recently announced a Demand Consortium, and Delta is also investing because they believe in the future of SAF. The strategy we’ve created with the Minnesota SAF Hub puts us on track for a future of SAF without subsidies. It will take years just like wind and solar energy has taken, but we are trying to accelerate the timeline for SAF.
Working with McKinsey, we are modeling different scenarios: SAF could potentially reach parity with jet fuel in 10 years with subsidies, but there are many variables, and we are continuously studying and incorporating this insight into our plans.
How does the partnership ensure that the entire SAF value chain- from feedstock to fuel blending- remains sustainable and cost-effective?
In terms of making SAF cost-effective, our Demand Consortium includes Bank of America, Deloitte, Delta, and Ecolab. It has been formed to purchase the first several million gallons of SAF each year, beginning in the fourth quarter of 2025. The goal is to scale production, drive down costs and secure multi-year demand that spurs continued growth of the SAF market. Each of these companies are providing funding to support the market production of SAF, which will contribute to verified carbon emission reductions associated with their employee business travel.
The point of the Demand Consortium is to pay the premium for SAF directly so no costs will be passed on to the consumer. Government incentives can also help mitigate cost increases in the short term. And, as production scales up and SAF costs decrease, the price difference between regular jet fuel and SAF will diminish.
Can you elaborate on the anticipated economic and environmental impacts of the SAF initiatives at MSP Airport, and what long-term goals does GREATER MSP have for scaling SAF usage and production across the region?
The most important benefit to SAF is that it can reduce carbon emissions by up to 80%. Every drop of SAF is at least a 50% improvement over what we have today. All feedstocks are under consideration. We are committed to doing SAF right. Our plan includes enhanced water quality and designing solutions that do not require increased land use. We know that by producing regenerative crops, like winter camelina, we can achieve better than a 70% carbon reduction. Currently, only a few thousand acres exist. But what we announced recently creates the first-ever market opportunity to scale these crops from a thousand acres to a million acres, which is part of our strategy.
In Minnesota, we recently announced a blending facility and Demand Consortium, which is like turning on a magnet that’s going to draw SAF from across the country into our state. That’s the first part of our plan. Second, we are working to have large-scale production of SAF in Minnesota, because that is going to create thousands of jobs across the state.
A preliminary calculation by McKinsey, based on conservative numbers when we started, estimated a $5 billion injection of investment in the state and tens of thousands of jobs created. Those numbers are currently being refreshed with what we know today, and we are getting more and more excited about the positive impact SAF will have on the Minnesota economy.
Please discuss parallel efforts similar to the Minnesota SAF Hub you see in other US regions and how such parallel initiatives can support each other.
LAX’s fuel provider was the first to develop a similar commercial-scale SAF production and blending facility, and several others have announced plans to do so. Minnesota is an ideal location for end-to-end SAF production with our combination of agricultural resources, research capabilities, infrastructure, government and private support, and the state’s commitment to sustainability.
The US Department of Energy is playing a convening role to ensure that insights and successful approaches in one region can accelerate progress in other regions.
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