Operational since 2016, the refinery was the sole production facility of Boston-based World Energy. It was among the first companies globally to produce sustainable aviation fuel (SAF) on a commercial scale. SAF is a renewable fuel made from used cooking oil, agricultural waste, and other waste products.

Six years ago, World Energy signed a partnership agreement with United Airlines. At the time, Scott Kirby, CEO of United Airlines, praised the partnership as a prime example for the aviation industry to follow in its efforts to reduce emissions.

With an additional fuel supply contract with JetBlue, World Energy expected to supply millions of gallons of SAF annually to the two US airlines, becoming a rare success story in the new fuel sector. However, this partnership has dissolved.

United Airlines said they terminated their relationship with World Energy several years ago without providing a reason. Meanwhile, a JetBlue spokesperson said the SAF producer was "a valued partner" since 2020 and they would continue to collaborate.

After laying off its entire staff and quietly closing, the future of the Paramount refinery remains uncertain. Industrial gas and chemical giant Air Products, the lead investor in a USD 2 billion project to expand the refinery, withdrew in February due to difficulties surrounding the expansion and operation of the project.

The World Energy refinery located in Paramount, California, USA, 5/6. Photo: Reuters

The World Energy refinery located in Paramount, California, USA, 5/6. Photo: Reuters

World Energy's situation reflects the overall challenges faced by dozens of clean fuel startups. Nearly two decades after the first short-haul flight partially powered by SAF, Reuters suggests the aviation industry's plan to transition to green fuels before regulators tighten emission regulations is merely a pipe dream.

World Energy is one of only 10 companies producing SAF on a commercial scale, out of a total of 165 projects announced by airlines over the past 12 years. Of these, 23 projects have been canceled, 27 indefinitely postponed, and 31 have yet to produce any fuel.

One reason for this situation is technology. Over 97% of SAF production projects utilize the hydrotreated esters and fatty acids (HEFA) process to convert waste oils and greases into jet fuel. This is the same technology used by World Energy, as they believe using corn, soybeans, or palm oil in SAF production could potentially impact food supplies.

However, industry experts say plants using this technology face serious input supply constraints and cannot meet the industry's long-term sustainable fuel needs.

Marie Owens Thomsen, Chief Economist and Senior Vice President of Sustainability at the International Air Transport Association (IATA), said developing alternative SAF production methods is essential to meet fuel demands for the aviation industry to achieve net zero emissions by 2050.

The only company not using HEFA technology is UK-based Velocys, which converts waste, wood chips, or natural gas into clean fuel. IAG – the parent company of British Airways, Iberia, Vueling, and Aer Lingus – has announced 4 major SAF initiatives with Velocys over the past 15 years. However, after more than a decade, Velocys has only produced SAF on a pilot scale and has not sold "a single drop of green fuel."

They planned to build a plant in Immingham (northeast Lincolnshire, England) to supply fuel to British Airways last year. The plant site remains a dusty, empty field, save for a tilted blue portable toilet.

Part of the proposed site for Velocys' sustainable aviation fuel production facility in Immingham, England, 10/4. Photo: Reuters

Part of the proposed site for Velocys' sustainable aviation fuel production facility in Immingham, England, 10/4. Photo: Reuters

While SAF production relies on unproven technology or early-stage projects by startups lacking commercial production experience, airlines are making bold predictions about SAF adoption and emission reductions.

IATA aims to achieve net zero emissions by 2050, requiring airlines to increase SAF usage to 118 billion gallons (nearly 447 billion liters) annually, over 300 times the current production. Airline leaders believe a new wave of SAF initiatives will explode, similar to the rapid growth of electric vehicles and solar energy.

Meanwhile, clean aviation fuel costs 3-5 times more than conventional fuel, leading to cautious demand from airlines.

Representing the production side, World Energy's CEO said some airlines have exaggerated their commitment to SAF projects, adding that they "talk a lot but do too little." Bernard Pinatel, Senior Vice President of Marketing and Services at TotalEnergies, expected "not enough to sell" given the aviation industry's ambitious goals, but they are facing overcapacity.

Without finding a suitable solution, airlines will face increasingly stringent regulations on SAF use for flights departing from Europe. This regulation starts with at least 2% SAF in 2025, increasing to 6% in 2030 and 70% by 2050.

United Airlines aircraft at Newark International Airport, New Jersey, USA, 7/5. Photo: Reuters

United Airlines aircraft at Newark International Airport, New Jersey, USA, 7/5. Photo: Reuters

According to IATA estimates, European SAF regulations will cost airlines an additional USD 2.9 billion in fines or to purchase additional sustainable fuel. Furthermore, the return of US President Donald Trump could further hinder the industry's green transition. Trump has pledged to repeal many of the incentives his predecessor, Joe Biden, provided for SAF and other green energy projects.

Amidst struggling projects in the US, the American aviation industry is pinning its hopes on a new SAF boom in Panama. Three years ago, New York-based SGP BioEnergy pledged to build the world's largest SAF facility in partnership with the Panamanian government. The plant is expected to produce green fuel from industrial hemp oil and waste cooking oil this year.

However, the start of production has been pushed back by two years. Randy Letang, CEO of SGP BioEnergy, said the delay is largely due to airlines paying less attention to supporting SAF projects than before. Panama's Energy Minister did not comment on the matter.

Several years ago, Letang founded SG Preston, a SAF production joint venture. SG Preston secured 10-year SAF purchase contracts with JetBlue of the US and Qantas Airways of Australia. The Qantas Airways contract alone stipulated an annual supply of 8 million gallons (over 30 million liters) of SAF.

These agreements relied on SG Preston's plan to build five SAF plants across North America. To date, none of these plants have been built, and SG Preston has filed for bankruptcy.

Bao Bao (according to Reuters)