InSights

The Sustainable Aviation Fuel market size stood at US$1.1 billion in 2022, up from US$50 million in 2019 registering an annually compounded growth rate of 115.38%. As per cCarbon estimates, the market is expected to reach value of US$29.7 billion by 2030. The main driver of growth is the need to reduce Greenhouse gas (GHG) emissions.

In the past year, several landmark judgements and legislations have been brought into action within the United States. These comprise laws that focus on greenhouse gases, emissions reduction, regulation of carbon markets, and more. Within this version of our Legislative Tracker, we have captured key bills that were introduced in the US Federal and State legislation, as well as in Canada during 2021-2022. Several key bills focusing on the broader environmental domain have an impact on different carbon-related markets: from Cap-and-Trade, Carbon-intensity based clean fuels, to Voluntary markets.

The Canadian Clean Fuel Standard (CFS) is a proposed set of regulations which aims to reduce the carbon intensity (CI) of liquid fuels that are imported, sold, and consumed within Canada. The CFS will come into force in 2023. It is modelled around the Californian and European fuel standards that are already in place. It is anticipated that the CFS will deliver a 30 megatonnes of annual reduction in greenhouse gas emissions by 2030, and lead to associated health and air quality benefits of Canada's citizens.The implementation of the CFS may incur an estimated societal cost per tonne between $111 and $ 186 and a $ 9.0 billion hit to the GDP in 2030 (0.3% of total). The implementation of the CFS may incur an additional cost of gasoline of between 6- 13 cents per liter in 2030.

Aviation accounts for approximately 2.4% of global COâ‚‚ emissions. In view of the current state of the global climate crisis, it becomes imperative to curb emissions. SAF is a biofuel which is chemically similar to conventional jet fuels and is one of the prominent solutions to decarbonize the aviation sector. It can be produced from renewable sources such as waste oils, municipal waste and non-food crops. With a carbon footprint much lower than conventional fossil fuels, SAF can help reduce COâ‚‚ emissions by up to 80%. With environmental regulations growing increasingly stringent across the globe, the demand for SAF is expected to pick up in the coming years. There are different technology pathways available for producing SAF. Currently, the ASTM D7566 lists seven approved pathways for the production of drop-in SAF. In addition, the ASTM D1655 lists two pathways for co-processing biomass-based feedstocks along with fossil fuels.

This report looks at carbon insights based key markets operating in North America: California's Low Carbon Fuel Standard, the Oregon Clean Fuel Program (CFP) and the British Columbia Low Carbon Fuel Standard (BC-LCFS), a term used interchangeably with the Renewable and Low Carbon Fuel Requirements Regulation (RL-CFRR). There are two other markets that are in the pipeline for development: the Transportation and Climate Initiative-Program (TCI-P) (a collaboration between North-eastern and Mid-Atlantic US) and the Canada Clean Fuel Standard (CFS), also known as the Clean Fuel Regulations (CFR). The report examines the current state and outlook for these markets, the credits that are/ will be required, and the economics behind them.

The Canadian Clean Fuel Standard (CFS) is a proposed set of regulations that aim to reduce the carbon intensity (CI) of liquid fuels that are imported, sold, and consumed within Canada. It is expected to come into force in 2022. This introduction note discusses the regulatory development and timeline of launch. It also focuses on the expected impact of this program on emission reduction targets and fuel mix in Canada.