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Refined Products, Agriculture, Energy Transition, Jet Fuel, Biofuel, Renewables
June 12, 2025
By Thomas Washington and Janet McGurty
HIGHLIGHTS
Less government money for renewables under Trump
SAF prices will grow amid firming global interest
XCF recently listed on NASDAQ
The private sector's interest in investing in sustainable aviation fuel remains robust, despite a more generalized downturn in renewable markets since the change of presidential administration in the US at the start of the year, according to Mihir Dange, CEO of SAF producer XCF Global.
In an interview with Platts, part of S&P Global Commodity Insights, Dange said that, while capital is increasingly shifting toward petroleum-based products, there is still a strong commitment to SAF infrastructure development.
"I think the decade-long thesis is going to be that [renewable] energy and infrastructure are important," he said.
During the previous administration of President Joe Biden, substantial financing was directed toward SAF projects and infrastructure development, bolstered by government incentives, such as the Inflation Reduction Act credits.
The Biden administration facilitated access to Department of Energy loans and grants for SAF projects, but since the inauguration of President Donald Trump, investment banks have been adopting a more cautious approach, waiting for clearer signals before committing funds, he added.
"There was a lot of appetite for financing from the government around SAF-type projects and/or infrastructure and IRA credits around SAF; what we've noticed in the current administration is the focus around petroleum-based products and the 'drill baby drill' type of concept," he said.
Prices have sagged as a result. Platts assessed SAF in California at a $4.14/gal premium to jet June 11; it has been in a broadly downward trajectory since being assessed at $4.65/gal May 7.
Many of the beneficiaries of the Biden-era IRA were in the so-called red states and, although there is still government-level interest in producing SAF, it is less clear how such projects will attract funding under the Trump administration, industry sources said.
The US House Ways and Means Committee released a draft bill to extend the 45Z tax credit through Dec. 31, 2031. This bill comes as a relief to a struggling market and, with the 45Z credit extended to 2031, biofuels producers would have the guarantee of elevated margins, compared with the present day, analysts a Commodity Insights said.
"There is focus for SAF on a producer credit level in the United States, so they want to see it, but the investing in the actual infrastructure has changed," Dange said.
SAF prices have been under pressure in different jurisdictions. "I think we're in a valley right now on pricing, and I think that valley has been created by the push toward petroleum-based products and the fact that it's a voluntary mandate here domestically," Dange said.
A number of industry commentators have said biofuels are currently oversupplied. However, demand, not least for SAF, is set to grow globally. This year will be the first of EU SAF mandates kicking in, under the terms of ReFuel EU Aviation. At the same time, a UK mandate is also taking effect. Under the EU regulation, 2% of aviation fuel supplied in the EU must be SAF from the start of 2025. In 2030, this jumps to 6% and then grows at intervals to 70% SAF in 2050.
Over the next five years or so, as mandates bite in different jurisdictions and as aviation demand continues to increase, there will be more demand for SAF and a growing disconnect between supply and demand, Dange said.
Global SAF production is set to rise from 1.03 million mt/year in 2024 to 3.93 million mt/year in 2026, with Europe and the US leading the way, according to forecasts from Commodity Insights analysts.
SAF is a global product, Dange said.
"We are domestic producers with a credit stack that favors domestic production right now, especially with 45Z, which is going to support domestic feedstocks, but I don't think we're going to see just a domestic approach here," he added.
XCF makes its product from distillers' corn oil, which is not a compliant feedstock in the EU and as such would have to be blended with a designated waste product, such used cooking oil.
"We've had the opportunity to have now conversations in Europe, in Japan, in China and in Australia.... My observation is that each one of those markets is different [and] regulation affects the market and the feedstock supply in those markets," Dange said. This means each market must be treated as a unique case, he added.
Formed from XCF Global Capital and Focus Impact BH3 Acquisition Company, XCF is currently a sole-asset producer of SAF from its New Rise Reno Facility in Nevada, which has a nameplate production capacity of 38 million gal/year of neat SAF. XCF commenced its first customer deliveries of neat SAF in March 2025.
XCF is advancing a pipeline of production sites in Nevada, North Carolina, and Florida to expand SAF capacity and support long-term growth. It announced the listing of its Class A common stock on the Nasdaq Capital Market June 9.
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