Global seed oil trade is shaping the sustainable aviation fuel industry.
Editor’s note: Michelle Kleiger is a member of the Seed World U.S. editorial board. We asked her to provide some perspective on sustainable aviation fuel. This is her column from Seed World U.S. December 2024.
Sustainable aviation fuel (SAF) production and infrastructure has developed slower than anticipated. While global production is expected to triple this year, generating upwards of 500 million gallons, availability and affordability have been constant obstacles for the fledgling industry as it works to supply even a small percentage of a very large demand. How individual countries and businesses work to overcome these obstacles will set a huge precedent for the flow of trade when it comes to biofuel feedstocks around the world.
Market development relies heavily on government policy and substantial investment. Though many nations are using policy to propel growth, revenue projections are speculative. Farmers, refineries and the aviation industry are attempting to leverage limited data to positively impact their bottom lines, but it’s a challenge.
An uptick in sustainable fuel production was the catalyst for an unusual situation in 2023 where the U.S. imported more seed oil than ever before. The shift to importer led to speculation that perhaps biofuel would finally become a financially profitable endeavor worldwide, not just an environmental consideration.
Who is Growing Seed Oil Crops?
If we examine SAF production by country, we see the U.S. and Brazil as front runners. The United States produces a large amount of biofuel crops and has Canadian neighbors who traditionally produce seed oil crops making the flow of these commodities logistically more feasible from farm to refinery in North America.
At the same time South America emerged as a major hub for seed oil crops. The sheer diversity of options ranging from sunflower seeds in Argentina, to Chili’s rapeseed, to Columbia’s palm trees, and of course, Brazil’s soybean crops presents the SAF industry with a lot of fuel source options.
The European Union has also been a major producer of sustainable aviation fuel and has relied heavily on imports of seed oil crops from Russia, Ukraine, Turkey, Bulgaria and Argentina. Cheaper imports have crumbled domestic production putting EU farmers in a tight spot.
Meanwhile, six African countries have partnered together to recruit small farm operations into a new biofuel co-op. The new agricultural endeavor specifically intends to produce seed oil crops used in making SAF.
And in Asia, Malaysia, China and Indonesia decreased their exports of seed oils making us wonder where they went and what they were used for.
How Much SAF is Available?
It’s a chicken or the egg situation. Will the crops be grown and create a demand for larger scale facilities? Or will refineries need to be built before farmers invest in more seed oil crops? In theory, greater demand for SAF should cause seed oil crops to become more competitive and make room for emerging nations to take advantage of an increased demand for seeds. The flow of trade could expand between nations.
On the other hand, countries are caught between decreasing carbon emissions by using oil seed crop byproducts without creating new emissions by transporting feedstocks across the world. Current dynamics could just as easily suggest that individual countries will look to strengthen domestic production of both crops and fuel for the sake of reducing emissions across supply chains. If that happens supply flow could actually reverse and we’d see SAF production facilities in all regions of the world supplied by locally grown oil seed crops.
Supply at this point is speculative. Like fossil fuels, it appears to be a projected guess at how much could be produced with current crops rather than how much is available right now. Even with production expected to triple, 500 million gallons represents just .5% of the global need according to emissions goals.
