ADM sees its sustainable aviation fuel coming online by 2026

Global grain merchant Archer Daniels Midland Co sees the commercialization of its sustainable aviation fuel (SAF) efforts coming online around 2026, CFO Vikram Luthar said on Monday. “SAF in terms of reality to come online, at least for us, is going to be in the 2026 type of time frame,” said Luthar, speaking at the BMO Capital Markets 2022 Growth & ESG Conference. He said investment in the SAF sector will be needed to help commercialize sustainable jet fuel but such investment would not necessarily come from ADM. In an effort to fight climate change, the Biden administration has launched a government challenge to supply at least 3b gallons of SAF per year by 2030. The airline sector is considered one of the most difficult to decarbonize as fuel for flights cannot be easily replaced with other kinds of power. The biofuel industry got a boost this year from passage of the Inflation Reduction Act, which provides significant subsidies to the biodiesel and sustainable jet fuel industries in the form of tax credits. “We believe there’s enough economic incentive for SAF to be profitable and to be a viable blend for jet fuel,” he said, adding that in some circumstances, “we believe there is some profitability already in SAF.” Luthar also said the US Environmental Protection Agency’s proposal of renewable volume obligations is a positive move for the biofuel industry that “establishes a floor, not a ceiling for demand going forward.”<br/>