On Top of SAF

As one of the industry’s leading SAF process technology providers, Topsoe believes all possible pathways are needed—but for most, investment costs remain high.
By Susanne Retka Schill | August 24, 2023

U.S. SAF goals are lofty. New tax credits provide real incentives. Multiple technologies are ready to roll. Opportunities lie ahead.  But the challenges are complex, Henrik Rasmussen, Topsoe’s managing director for the Americas, tells SAF Magazine. “We have the pieces. We have the technology and catalyst black box. We can make SAF using many different pathways,” he says, listing technologies and feedstocks such as e-fuels utilizing electrolyzers combined with CO2 from direct air capture or a biogenic CO2 source, methanol-to-jet, ethanol-to-jet, biomass-to-jet, fats, oils and greases-to-jet. “We as a technology provider can show it’s technically feasible, but we’re not the ones financing the plants.”

There’s a reason why HEFA (hydrotreated esters and fatty acids) technology is leading the commercialization race. These units making renewable fuels from fats, oils and greases have become profitable due to government policies acting as subsidies. The definition of biodiesel was expanded to include renewable diesel and renamed biomass-based diesel. Thus, renewable diesel is now eligible for the blenders tax credit alongside RIN generation (renewable identification number used to demonstrate compliance with the Renewable Fuel Standard). On top of that, the value of carbon credits in states and provinces on the West Coast with low carbon fuel standards add greater returns. Refiners can convert their older, less efficient facilities to renewable diesel production with relatively low capital expenditure.

The cost of a retrofit of an existing facility is much less than a greenfield HEFA project, Rasmussen says, due to infrastructure being in place and the ability to incorporate much of the existing equipment into the new process. “We have licensed more than 50 of these plants now worldwide, and 90% are in the U.S. and Canada,” he says. “Initially, they were focused on making diesel because there were almost no subsidies for jet. Now that the Inflation Reduction Act is in place, the production of renewable jet is as profitable or more profitable than renewable diesel, so our customers are pivoting toward making jet. We’re already going back and modifying the plants we licensed a couple of years ago to make more jet.” 

Topsoe’s HydroFlex process offers advantages that has made it a leading HEFA technology. The company has developed a new suite of proprietary catalysts for fats, oil and greases that permits optimizing either jet or renewable diesel production. The Topsoe process utilizes catalysts for the hydrogenation process to remove oxygen from the triglycerides as water, unlike the more common decarboxylation process that removes oxygen as CO2. Not only does that keep the carbon in the fuel fraction, thus increasing yield, but it eliminates the need for an amine tower to scrub the CO2, lowering energy consumption and CAPEX.

“The next big thing which will be very helpful in generating more SAF is hydro liquefaction,” Rasmussen continues. Steeper Energy and Topsoe are working on hydrothermal liquefaction technology that applies supercritical water as a reaction medium to convert biomass directly into a high-energy density biocrude oil. “With this technology, we can take woody biomass to a liquid, instead of gasifying the biomass into individual molecules as a gas," Rasmussen says. "Then, we send that liquid to our HydroFlex technology to make jet or diesel.

“The reason why HEFA is more cost effective than biomass gasification is that you already have a liquid and a molecule that looks like a diesel or jet molecule. When you gasify the biomass, you then have to take the individual molecules—hydrogen and CO2—and put them together to create longer-chain molecules and form a liquid. That requires more unit operation and more catalyst steps. It’s technically a proven process, but more expensive,” Rasmussen explains.

Biomass-based SAF units are all likely to have somewhat smaller capacities, he adds, to correspond with biomass availability within a 50- to 100-mile radius from the plant. It does not make sense to truck the biomass long distances from an energy balance. A rough rule of thumb, he says, is it takes 1 ton of dry woody biomass to make a barrel (42 gallons) of SAF. 

The process of building molecules from CO2 and H2 into targeted hydrocarbon fuels is not new technology. Fischer Tropsch (FT) technology has been around nearly a century. “We can license this technology due to our collaboration with Sasol,” Rasmussen says. “Sasol technology is proven in a number of very large-scale plants around the world.”

This summer, Topsoe established a 50/50 joint venture with Sasol, (subject to approval by relevant authorities), solidifying their commitment to produce sustainable aviation fuels. The purpose of the Sasol Topsoe JV is to develop, build, own and operate SAF plants, and market sustainable aviation fuels derived primarily from nonfossil feedstock, utilizing green hydrogen, sustainable sources of CO2 and biomass.

Other pathways to SAF that Topsoe is working on include methanol to jet, ethanol to jet and eFuels. “These are great pathways as well,” Rasmussen says. “To make eFuels, we use Topsoe SOEC (solid oxide electrolytic cell) electrolyzer technology to dissociate water to hydrogen and oxygen to get the green hydrogen, and combine with a CO2 source to make fuels. The CO2 source may be from an ethanol plant (biogenic CO2) or from direct air capture, etc. The H2 and CO2 are converted to syngas, which is further processed in a Fischer Tropsch technology to make waxes, which are hydrocracked into jet fuel. It is a great technology, and it certainly works well, but at a higher CAPEX than HEFA. Fortunately, the carbon intensity score for the renewable jet is better, so the subsidies for this pathway are higher making these projects profitable.

“All of these pathways are needed to get more volume of jet into the marketplace, but these new pathways require higher CAPEX investment,” he continues. “And the plants won’t get built unless you have financing and off take agreements in place.”

Investment hurdles
As for SAF investment, Rasmussen cites several challenges. “What has to happen for projects to really explode in the jet world is that the airlines need to be willing to make a long-term off-take commitment at a realistic price,” he says. “The cost of renewable jet will be higher than fossil jet unless crude oil increases significantly, so the airlines will have to pass on that extra cost to the consumer and tell the consumer, ‘We want to be sustainable, so you can fly without a CO2 footprint, but it’s going to cost you more.’ That is the part of the story that’s not being told, right now.”

The lack of long-term off-take agreements is a problem, he says. “The airlines are saying they want jet, but they are only signing off-take agreements for a few years. You can’t build a plant based on a short off-take agreement,” he says. “Refiners with solid balance sheets aren’t affected as much, however, as project developers need nonrecourse financing of their projects.

“Even if a long-term agreement is in hand,” he says, “bankers are likely to be leery because airlines are not considered investment grade. Airlines lack the four or five balance-sheet ratios that investors look for, such as price-to-earnings or earnings-to-deployed capital ratios.”

Another concern for bankers and investors is that the federal goals and tax credits in place now that are making a project profitable may expire before the plant is paid back. “Ultimately, airlines and consumers will need to accept that going green is going to cost more,” Rasmussen says. “Topsoe’s online report, Voices from the Sky, poses the tough question: With fuel comprising 20-30% of an airline ticket, will passengers accept a doubling of cost for green fuel over fossil jet fuel?”

Decarbonization Vision
Rasmussen steps back from the SAF arena to outline Topsoe’s vision for decarbonization, starting with a blue transition and moving toward more green energy. “Fossil is not going away,” he says. "It will be a stable part of the world energy supply for many decades to come, while all these other energy sources will be part of the overall energy mix going forward. In the U.S., we have already started the blue transition and we will start to see more and more green projects over the next 10 years and beyond. The reason for this is that blue hydrogen and blue ammonia can be realized at massive scale right now. Blue ammonia can be shipped as an energy carrier and blue hydrogen will be produced and consumed right where it’s needed to decarbonize many industries.” While SAF is the only real alternative for the airline industry today, he adds, hydrogen is a basic ingredient in SAF technologies.

Topsoe has long dominated the ammonia scene, with its catalyst technology producing half the globe’s nitrogen fertilizer. Topsoe expects huge growth in blue ammonia. “You can’t easily ship hydrogen, but you can ship ammonia,” Rasmussen points out. “Ammonia is already being shipped all over the world for fertilizer use, but now blue ammonia can be an energy carrier to decarbonize businesses where they can’t make blue. Why can’t they make blue? In a lot of places in the world, they can’t sequester the CO2 easily. The U.S. is blessed with the geology where we can sequester CO2 in most states safely, and we have lots of natural gas, which are the two main requirements for making blue hydrogen and blue ammonia.”

Refinery-scale blue hydrogen is on the drawing board as well. “A blue hydrogen hub on the Gulf coast is building two mega-scale Topsoe blue hydrogen plants,” Rasmussen says. Those two plants alone will reduce CO2 emissions by 10 million tons per year. “It shows the scale where blue can make a huge impact right here, right now,” Rasmussen says. “A blue transition is important because it can decarbonize right now, at scale and it is commercially proven.”

We cannot get from A to B with green today, Rasmussen adds. “The pieces of the puzzle are not there. But you can get from A to B with blue in the near term, while we continue to build the green infrastructure.”

Author: Susanne Retka Schill
Freelance contibutor, SAF Magazine