Refined Products, Biofuels

May 14, 2025

Fuel for Thought: Alaska hopes SAF plant will protect lucrative cargo traffic

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Featuring Tim Bradner


Alaska, hoping to forestall a possible slowdown in cargo air traffic, is hoping a SAF plant in Anchorage will help retain the state’s position as a profitable pitstop.

Cargo carriers, mainly on Asia-North America flights, use Anchorage as a midway refueling and cargo transfer point. About 900 million gallons of jet fuel are loaded at Ted Stevens International Airport each year. Air cargo contributed $69.3 million, or 42.5%, of Anchorage airport revenues in 2024, mostly in landing fees.

Most large cargo planes are capable of flying trans-Pacific and trans-polar routes nonstop, but the economics are still attractive for freight operators to stop in Alaska to refuel. That’s because carrying less fuel allows for more cargo to be carried, maximizing revenue.

But that advantage is threatened in part by technology advances and a requirement from the EU that airlines use a 20% blend of sustainable and conventional fuels by 2035 and 42% by 2045.

Providing cargo carriers with a cost-effective supply of SAF would give them an incentive to continue refueling stops in Alaska even if technology improves the economics of flying nonstop.

"Anchorage is already a critical refueling hub for trans-Pacific cargo, but as aviation technology evolves, we can’t rely on today’s fuel burn vs. payload advantage alone,” said Katharine Keith, Alaska Deputy Commissioner of Transportation and Public Facilities.

“Investing in sustainable aviation fuel gives carriers a long-term reason to keep stopping here -- it’s a hedge against future aircraft designs and market shifts that might otherwise bypass Alaska. Building SAF capacity secures our position in the global air logistics chain," she said.

Backed by major airlines

The state is investigating an SAF plant that could meet air carriers’ growing demand. Atlas Air, one of the world’s largest air cargo operators, and Alaska Airlines, a major west coast regional airline and also the state’s largest passenger carrier, are supporting the state’s effort to make SAF for blending with conventional jet fuel.

Keith is leading the initial feasibility assessments. The goal is for a plant to produce 150 million gallons per year of sustainable fuel, which is one-sixth of the current jet fuel demand in Anchorage, along with 80 million to 95 million gallons of Renewable Diesel and Renewable Naphtha. The plan has the backing of Alaska’s governor, Mike Dunleavy, who has a strong interest in renewable energy.

Keith said six other airlines, mostly cargo operators, have written letters to the state supporting the idea. Initial studies show costs for SAF would be less than what the fuel costs elsewhere because of a huge amount of biomass that is available. Organic material like fish oil or forest biomass could be converted to fuel at costs low enough to offset the capital cost of building an SAF plant, which could range from $1 billion to $3 billion, depending on the technology selected, Keith said.

At this point, the Alaska team working on the initial feasibility is looking at two technology paths, Keith said. One is a Hydroprocessed Esters and Fatty Acids, or HEFA, process using organic material like fish oil from Alaska seafood processing plants to produce synthetic kerosene for blending. Plants elsewhere producing renewable aviation and diesel fuels mostly use the HEFA process.

The second approach is a Fischer-Tropsch technology that would rely mainly on the large amount of forest biomass available. Fischer-Tropsch process is used today in South Africa to produce fuel from coal and natural gas.

Pulp to power

But there are still uncertainties. “While the FT process is proven, not many FT refineries exist globally, and not with biomass as a feedstock. That, combined with our plan for carbon sequestration, means that many aspects will be new,” Keith said.

“There is a plant similar in feedstock and scale to ours, scheduled to be operational in 2028 in Louisiana,” she said. DG Fuels’ plant, located in St. James Parish, will have a planned capacity of 13,000 b/d of SAF, according to company information.

Keith said Fischer-Tropsch is costly, but with the large volumes of forest material available, Fischer-Tropsch could be more cost-effective than HEFA.

“This was a complete surprise to us because the capital cost would be much higher, but that appears to be offset by the more limited supply of fish oil and the longer transport costs from fish plants compared with the volumes of available wood biomass and the shorter distance from harvest areas,” she said.

Studies also show that Alaska’s fisheries will be able to supply only 9% of a plant’s target output, assuming that only byproducts like fish oil are used. Also, the largest fish processing plants are at a considerable distance from Anchorage. A smaller HEFA plant could still be viable with additional organic feedstock, such as municipal waste.

The forest biomass is closer, mostly within 150 miles of Anchorage in the Matanuska-Susitna Borough and the Kenai Peninsula. Estimates are that 46.2 million dry tons of live and dead timber can be reached within one mile of existing roads. For a target output of 150 million gallons a year of SAF, about 4.9 million dry tons of forest biomass, or 9.8 million green tons (with higher moisture), would be needed.

Infrastructure advantage

The existing fuel infrastructure near Anchorage offers advantages, Keith said. Anchorage’s port has 3.4 million gallons of fuel storage to supply both its airport and Joint Base Elemendorf-Richardson, a nearby military installation. If the SAF plant is built at or near an existing Marathon Petroleum refinery on the Kenai Peninsula, it can use an existing 67-mile liquids pipeline to move the SAF fuel to bulk storage in Anchorage.

An alternative plant site at Port MacKenzie, a short distance from Anchorage across Knik Arm of Upper Cook Inlet, could see the SAF fuel barged to storage facilities at Anchorage’s port.

Converting forest biomass, meanwhile, solves another problem for Alaska because much of it is damaged and dead spruce killed by beetle infestations. This creates a serious fire danger, so removing the damaged timber serves an important public purpose, Keith said.

This could be a double-win for Alaska if the technology and economics work – Alaska gets a reduced wildfire danger along with an anchor for its air carrier refueling industry.