Executive Summary
Sustainable aviation fuel (SAF) has moved from niche demonstration projects to a central pillar of airline decarbonization roadmaps. In 2026, hydroprocessed esters and fatty acids (HEFA) still dominate commercial SAF supply, while alcohol-to-jet (ATJ) pathways scale more slowly from ethanol and isobutanol feedstocks. Typical SAF blends remain well below 10% of global jet demand, but mandates in Europe and voluntary offtake agreements elsewhere are tightening. At Energy Solutions, we benchmark HEFA and ATJ on levelized fuel cost (LCOF), feedstock availability, and CO abatement cost to understand where each pathway makes economic sense and where synthetic e-kerosene or demand reduction remain more realistic.
- In 2026, HEFA-SAF production costs for mature plants typically fall in the USD 1,200–1,800/t range (roughly USD 1.0–1.5/litre), versus USD 600–900/t for fossil jet. ATJ-SAF is higher at USD 1,600–2,400/t depending on ethanol pricing and plant scale.
- Well-to-wake GHG reductions for HEFA are commonly 60–85% relative to fossil jet when using waste oils and animal fats; ATJ from crop-based ethanol is often in the 40–70% band, improving when advanced residues or cellulosic ethanol are used.
- Under typical EU 2026 policy conditions (jet at 800–1,100 USD/t, carbon prices 80–100 EUR/tCO), abatement costs for HEFA span roughly 200–450 USD/tCO, with ATJ often above 350 USD/tCO unless low-cost ethanol or strong incentives apply.
- Even aggressive HEFA and ATJ build-out can only reach 10–15% of global jet demand by 2035 without straining lipid and sustainable biomass feedstocks; long-run scenarios increasingly pair early HEFA/ATJ with green hydrogen production economics and power-to-liquid e-fuels.
What You'll Learn
- SAF Basics: HEFA and Alcohol-to-Jet Pathways
- Benchmarks: Production Costs, Yields, and Carbon Intensity
- Economic Analysis: LCOF, Abatement Cost, and Policy Stacks
- Case Studies: EU HEFA Hubs and Emerging ATJ Projects
- Global Perspective: US, EU, and Asia-Pacific SAF Markets
- Devil's Advocate: Feedstock, Land Use, and Policy Risk
- Outlook to 2030/2035: From HEFA/ATJ to E-Kerosene
- Implementation Guide: Airlines, Lessors, and Fuel Suppliers
- FAQ: HEFA vs ATJ Economics and Deployment
SAF Basics: HEFA and Alcohol-to-Jet Pathways
Sustainable aviation fuel is a drop-in replacement for conventional jet A-1 that meets the same energy density, freezing point, and combustion characteristics but with lower lifecycle greenhouse gas emissions. Current certified pathways under ASTM D7566 include HEFA, ATJ, FischerTropsch from biomass or waste, and emerging power-to-liquid routes. Airlines typically blend SAF up to 50% with conventional jet for use in existing aircraft and infrastructure.
HEFA and ATJ differ mainly in feedstock and conversion chemistry:
- HEFA (Hydroprocessed Esters and Fatty Acids): Uses lipid feedstocks (used cooking oil, tallow, technical corn oil, and some vegetable oils). After hydrotreating and isomerization, the resulting hydrocarbon stream is fractionated into diesel, jet, and naphtha cuts.
- ATJ (Alcohol-to-Jet): Starts with ethanol or isobutanol. Alcohol is dehydrated to an olefin, oligomerised to longer-chain hydrocarbons, then hydroprocessed and fractionated into jet-range molecules.
Both routes are constrained not only by capex and operating cost but also by feedstock availability. Waste lipid supply is finite and regionally concentrated, while sustainably sourced ethanol volumes depend on land use, yields, and competing demand from road fuels and chemicals.
Methodology Note
Energy Solutions analysis triangulates public techno-economic assessments, disclosed offtake agreements, and internal models. Cost ranges here are expressed in 2025–2026 real USD, assuming plant capacities of 0.5–3 million tonnes/year, financing at 8–10% real WACC, and capacity factors of 80–90%. Lifecycle emissions use typical values from EU RED II and CORSIA default pathways, adjusted for regional electricity mixes and transport. Numbers are indicative ranges, not engineering designs for specific projects.
Summary of HEFA vs Alcohol-to-Jet Technical Characteristics (2026)
| Parameter |
HEFA-SAF |
ATJ-SAF (Ethanol) |
| Typical plant scale |
0.5–5 Mt/year (jet + diesel) |
0.1–0.4 Mt/year (jet-focused) |
| Main feedstocks |
Used cooking oil, tallow, distillers corn oil, some vegetable oils |
Sugarcane ethanol, corn ethanol, emerging cellulosic ethanol |
| Jet fraction of output |
25–35% of total hydrocarbons |
40–60% (depending on cut strategy) |
| Well-to-wake GHG reduction vs fossil jet |
60–85% (waste oils); 40–70% (dedicated crops) |
40–70% (crop ethanol); 60–90% (advanced/cellulosic) |
| Technology maturity |
Commercial (multiple large plants in EU, US, Asia) |
Early commercial / first-of-a-kind in most regions |
Indicative Lifecycle GHG Reduction vs Fossil Jet
Source: Energy Solutions synthesis of typical HEFA and ATJ pathways under CORSIA and EU RED II; actual performance is project-specific.
Benchmarks: Production Costs, Yields, and Carbon Intensity
Reported SAF prices in 20252026 span a wide range because of policy stacking (tax credits, mandates, certificate schemes) and differences in feedstock contracts. To compare HEFA and ATJ on a technology-neutral basis, this section focuses on levelized fuel production cost at the plant gate before incentives.
Illustrative Levelized Production Cost Benchmarks (2026, Plant Gate)
| Pathway |
LCOF Range (USD/t jet) |
Approximate Multiple vs Fossil Jet |
Key Cost Drivers |
| Fossil jet A-1 |
600–900 |
1.0× baseline |
Crude price, refinery margins, taxes |
| HEFA-SAF (waste oils) |
1,200–1,800 |
1.5–3× |
Feedstock price (800–1,200 USD/t), hydrogen, capex recovery |
| HEFA-SAF (food crops) |
1,400–2,100 |
1.7–3.5× |
Vegetable oil pricing, land use constraints |
| ATJ-SAF (crop ethanol) |
1,600–2,400 |
2.0–4× |
Ethanol price (500–800 USD/t), conversion efficiency |
| ATJ-SAF (cellulosic ethanol) |
1,700–2,600 |
2.1–4.2× |
Higher capex, lower feedstock emissions |
Stylised Production Cost Comparison (USD per tonne of jet fuel)
Source: Energy Solutions LCOF modelling for representative 2026 projects; excludes tax credits and certificate revenues.
On a per-litre basis, the midpoints above correspond roughly to USD 0.55–0.75/litre for fossil jet, USD 1.1–1.4/litre for HEFA, and USD 1.3–1.7/litre for ATJ. With jet fuel accounting for 20–40% of typical airline operating costs, such premia are material even under partial blends.
Economic Analysis: LCOF, Abatement Cost, and Policy Stacks
The economic attractiveness of SAF depends not only on plant-level costs but on who captures value: airlines, fuel suppliers, or certificate traders. To illustrate, consider an EU airline in 2026 facing fossil jet at 850 USD/t, a SAF mandate of a few percent, and access to HEFA and ATJ volumes.
Indicative Abatement Cost Calculation (EU 2026 Conditions)
| Scenario |
Fuel Cost Premium vs Fossil (USD/t) |
Lifecycle CO Reduction vs Fossil |
Abatement Cost (USD/tCO) |
| HEFA (waste oils, 75% GHG reduction) |
700 |
0.75 |
~310 |
| HEFA (mixed feedstocks, 60% reduction) |
800 |
0.60 |
~440 |
| ATJ (crop ethanol, 50% reduction) |
900 |
0.50 |
~600 |
| ATJ (advanced ethanol, 70% reduction) |
1,000 |
0.70 |
~510 |
Illustrative Abatement Cost vs GHG Reduction
Source: Energy Solutions abatement cost curves for SAF under EU-style mandates and certificate schemes.
In many markets, these abatement costs are well above prevailing carbon prices, meaning SAF deployment is driven primarily by mandates, blending obligations, and targeted subsidies rather than purely market-driven carbon economics. This is consistent with patterns seen in industrial heat pump decarbonization and other hard-to-abate sectors.
Case Studies: EU HEFA Hubs and Emerging ATJ Projects
Case Studies: Real-World HEFA and ATJ Projects
Case Study 1 Coastal HEFA Hub Serving Flag-Carriers
Context
- Location: Northwest Europe (coastal refinery hub)
- Facility Type: Converted hydrotreater producing renewable diesel and SAF
- System Size: ~750 kt/year renewable fuels, 30% jet cut
- Start-up: 20232024 ramp-up
Investment
- Total CAPEX: ~USD 900 million (conversion + logistics)
- Unit Cost: Estimated 1,3001,700 USD/t SAF at nameplate utilisation
- Financing: Corporate balance sheet plus green bonds
Results (First Years)
- Delivered Volumes: ~150 kt/year SAF to nearby airports via pipeline and rail.
- GHG Reduction: 7080% vs fossil jet using primarily waste oils and tallow.
- Blending Levels: 510% SAF blends on key flag-carrier routes.
Lessons Learned
Integration with existing refinery assets lowered capex per tonne, but securing long-term waste oil contracts proved critical. Exposure to vegetable oil price spikes highlighted the importance of diversified feedstock and clear sustainability criteria.
Case Study 2 ATJ Demonstration Plant Linked to Ethanol Producer
Context
- Location: North America, corn-ethanol region
- Facility Type: First-of-a-kind ATJ plant adjacent to an ethanol mill
- System Size: ~100 kt/year SAF-equivalent output
- Start-up: Commissioning 20242025
Investment
- Total CAPEX: ~USD 350 million
- Feedstock: Corn ethanol, with pilots on cellulosic streams
- Offtake: Multi-year agreements with major US airlines
Results (Early Operation)
- GHG Reduction: 4060% vs fossil jet depending on ethanol pathway.
- Cost: Initial LCOF estimated at 1,8002,200 USD/t, expected to decline as the technology scales.
- Operational: Higher complexity than HEFA; catalyst lifetimes and integration with the ethanol plant are key focus areas.
Lessons Learned
Co-location with ethanol production reduces logistics cost and enables incremental adoption of advanced feedstocks. However, exposure to commodity ethanol markets and policy changes in road fuel can affect economics.
Global Perspective: US, EU, and Asia-Pacific SAF Markets
SAF deployment is evolving differently across regions:
- European Union: Strong policy signals via ReFuelEU Aviation, growing mandates, and high carbon prices drive HEFA adoption first, with ATJ and e-kerosene pilots. Access to waste lipids is relatively strong but increasingly competitive.
- United States: The combination of the Blender's Tax Credit, state low-carbon fuel standards, and IRA incentives has created a deep market for HEFA primarily via renewable diesel. ATJ growth is linked closely to ethanol industry strategy and federal support.
- Asia-Pacific: Large jet demand growth and abundant biomass potential, but SAF policies and certification frameworks are less mature. Several national carriers are signing offtakes with EU and US producers while domestic capacity grows.
Stylised SAF Capacity by Region and Pathway (2026, kt/year)
Source: Energy Solutions estimates based on announced HEFA and ATJ projects worldwide.
Devil's Advocate: Feedstock, Land Use, and Policy Risk
While SAF appears indispensable in decarbonizing long-haul aviation, there are legitimate questions about scale, cost, and trade-offs.
Technical and Feedstock Barriers
- Lipid supply limits: Global availability of truly sustainable waste oils and fats likely supports only a few percent of long-term jet demand, even with high collection rates.
- Competing uses: HEFA feedstocks are also in demand for renewable diesel in road transport, chemical feedstocks, and heating applications.
- ATJ feedstock competition: Ethanol used for SAF competes with road fuels and, in some regions, food and feed markets.
Economic and Policy Constraints
- High abatement costs: Many SAF pathways sit at 200600 USD/tCOd abated, higher than alternative decarbonization options such as industrial efficiency or building retrofits.
- Policy dependency: Project bankability relies heavily on long-term mandates, tax credits, or contract-for-difference schemes; abrupt policy shifts could strand assets.
- Market fragmentation: Differing sustainability criteria and accounting rules between CORSIA, EU schemes, and national programs increase transaction costs.
When Not to Rely on HEFA or ATJ
For sectors or routes where high-frequency short-haul electrification or hybridization is plausible by the 2030s, it may be more efficient to focus SAF on long-haul and high-utilisation segments. In addition, airlines with constrained balance sheets may choose to prioritise operational efficiency, fleet renewal, and demand-side measures ahead of deep SAF blending, especially when mandates are modest.
Outlook to 2030/2035: From HEFA/ATJ to E-Kerosene
Most credible decarbonization roadmaps for aviation show a transition in the SAF mix over the next decade:
- Near term (to ~2030): HEFA dominates, ATJ and early power-to-liquid projects operate at modest scale.
- 203035: E-kerosene from green hydrogen and captured COd grows as costs fall and renewable power expands, while HEFA and ATJ plateau due to feedstock constraints.
Stylised SAF Mix Scenarios (Share of Total Jet Fuel Demand)
| Scenario |
2030 SAF Share |
2035 SAF Share |
Dominant Pathways |
| Conservative |
36% |
812% |
HEFA, limited ATJ; early e-kerosene pilots |
| Base case |
58% |
1218% |
HEFA + ATJ; growing e-kerosene share |
| Aggressive |
820% |
1825% |
Rapid scale-up of e-kerosene and advanced ATJ |
Indicative SAF Cost Trajectories to 2035 (Midpoints, USD/t)
Source: Energy Solutions cost learning curves for HEFA, ATJ, and power-to-liquid kerosene based on experience rates and input cost trends.
Implementation Guide: Airlines, Lessors, and Fuel Suppliers
For airlines and fuel suppliers planning their SAF strategy, HEFA and ATJ should be evaluated alongside other decarbonization investments across the portfolio.
- Map policy exposure: Quantify expected SAF blending obligations and certificate prices in core markets (EU, UK, US, Asia).
- Assess feedstock access: For HEFA, evaluate long-term waste oil and tallow contracts; for ATJ, consider ethanol supply, sustainability, and co-product markets.
- Structure offtake agreements: Blend fixed-volume and price floors with flexibility clauses linked to policy and carbon prices.
- Integrate into fleet planning: Align SAF deployment with new aircraft deliveries and high-utilisation routes to maximise impact per tonne of fuel.
- Build internal carbon price signals: Use internal carbon prices closer to SAF abatement costs to prioritise routes and customers willing to pay premiums.
FAQ: HEFA vs Alcohol-to-Jet Economics
How much more expensive is HEFA-SAF than fossil jet in 2026?
Most mature HEFA projects report levelized production costs in the USD 1,2001,800/t range at the plant gate, compared with USD 600900/t for fossil jet. Delivered premia depend on logistics and policy incentives but often translate into roughly 24 times the fuel component cost for the SAF fraction of a blend.
Is alcohol-to-jet (ATJ) more expensive than HEFA?
Today ATJ is generally more expensive, with mid-range estimates of USD 1,6002,400/t SAF. Higher capex per tonne of output and dependence on ethanol pricing drive this premium. Over time, larger plants and improved catalysts could narrow the gap, particularly for ATJ using low-cost cellulosic ethanol.
What lifecycle emissions reductions can airlines expect from HEFA and ATJ?
HEFA from waste lipids typically delivers 6085% well-to-wake COd reductions versus fossil jet, while HEFA from food crops sits lower due to land use change assumptions. ATJ from conventional ethanol tends to fall in the 4070% band, with advanced or cellulosic ethanol pathways approaching HEFA-from-waste performance.
How do SAF abatement costs compare with other climate measures?
On a cost-per-tonne-of-COd basis, HEFA and ATJ often land between 200 and 600 USD/tCOd. That is significantly higher than many building, industrial, or power-sector options, which can sit below 100 USD/tCOd. However, for long-haul aviation there are few alternatives that deliver comparable absolute emissions cuts in the near term.
Can existing aircraft and engines use 100% SAF?
Most SAF today is used in blends up to 50% with fossil jet under current certification. Several engine OEMs and airframers have successfully flown on 100% SAF in test campaigns, and certification work is ongoing. Commercial operations at 100% will require further approvals and fuel supply, but drop-in compatibility remains a key design requirement.
Are there enough sustainable feedstocks to replace all jet fuel with HEFA or ATJ?
No. Even optimistic scenarios for waste oils, fats, and sustainable ethanol show that HEFA and ATJ together can realistically cover a minority share of long-term jet demand. This is why many 2035+ roadmaps pair SAF with efficiency improvements, modest demand management, and eventually power-to-liquid e-kerosene built on green hydrogen.
How do regional policies change HEFA vs ATJ economics?
In the EU, mandates and high carbon prices tend to favour waste-based HEFA initially, while in the US, ethanol-centric policies can improve ATJ competitiveness. Asia-Pacific markets are more heterogeneous, with some countries prioritising domestic biomass utilisation and others relying on imports under global schemes such as CORSIA.
When should airlines prioritise SAF over fleet renewal or operational measures?
Fleet renewal and operational efficiency usually offer lower abatement costs and should be pursued aggressively. SAF becomes particularly relevant when these options are saturated, when mandates require specific blending levels, or when airlines target premium segments and corporate travellers willing to pay for lower-emission flights.
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