Platts proposes to launch daily California and Illinois sustainable aviation fuel price assessments

Platts, part of S&P Global Commodity Insights, proposes to launch daily market-based US California and US Illinois sustainable aviation fuel (SAF) assessments, effective Aug. 1, 2024.

The global aviation industry has taken strides toward the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) net zero target, lowering the carbon intensity (CI) and greenhouse gas (GHG) emissions of aviation. The US, at a federal and state level, has also launched initiatives that support SAF, with production and consumption volumes climbing annually.

After consultation with the industry Platts has observed a desire for market-based SAF price assessment to provide transparency and continue the development of the SAF market.

Platts is proposing to launch sustainable aviation fuel price assessments for both neat SAF (100%) and blended SAF (70% conventional jet fuel and 30% SAF).

The neat SAF and the percentage of SAF in the blended assessment would reflect a reference Carbon Intensity (CI) of 42 gCO2e/MJ, according to the California Air Resources Board Low Carbon Fuel Standard alternative fuels pathway.

The assumed GHG emissions reduction versus conventional jet fuel would be 52.8% (52% rounded), therefore the federal SAF tax credit equals to $1.27/gal ($1.25/gal plus 2 cents/gal).

These assessments would reflect SAF produced via the hydroprocessed esters and fatty acids (HEFA) pathway, using feedstocks such as vegetable oils, waste oils, fats, tallow and other similar feedstocks. Platts would not consider SAF produced from palm oil or palm fatty acid distillate within the assessment.

Neat SAF assessments

Platts proposes to launch two neat SAF daily assessments.

The neat SAF assessments would reflect a minimum volume of 1,000 barrels, meeting the ASTM D7566 specification.

Platts is seeking feedback on the reference density to reflect in the neat SAF price assessments, under ASTM D7566 annex A2.

The US California SAF price would be assessed on a delivered at place (DAP) incoterm basis and reflect SAF delivered via railcar or barge to Los Angeles. Neat SAF delivered to other locations within California such as San Francisco would also be considered but may be normalized back to the basis location.

The US Illinois SAF price would be assessed on a DAP incoterm basis and reflect SAF delivered via railcar or barge to the Chicago area.

Both assessments would reflect delivery five to 25 days forward.

Blended aviation fuel assessment

Platts proposes to launch one blended jet and SAF aviation fuel price assessment.

The blended aviation fuel assessment would be made up of 70% conventional jet fuel and 30% SAF. The assessment would reflect a minimum volume of 8,000 gallons and meet the ASTM D7566 specification.

The blended aviation fuel will reflect product (DAP) via pipeline, or truck into the Los Angeles airport or surrounding airports in the Los Angeles area. The assessment would reflect delivery five to 20 days forward.

Deliveries into other California airports may be considered and normalized. For example, normalization could take into account differences in transportation costs, and differences in blend percentages.

Assessment Details

The US California neat SAF assessment, basis Los Angeles, and the US California blended aviation fuel assessment, basis Los Angeles, would both be published as an outright price in US cents/gallon, as well as a differential to the Platts Jet Kero LA pipeline (PJAAP00) price assessment. The assessments would also be inclusive of the California Low Carbon Fuel Standard (LCFS) carbon credit, federal SAF tax credit and D4 biomass-based diesel Renewable Identification Number.

The Illinois neat SAF assessment, basis Chicago, would be published as an outright price in US cents/gallon, as well as at a differential to the Platts Jet Kero Chicago pipeline (PJAAF00) price assessment. The Chicago assessment would be inclusive of the Illinois SAF tax credit, federal SAF tax credit and D4 biomass-based diesel RINs.

The assessments would consider information reported to Platts and published as heards throughout the day, including firm bids and offers, trades, and indicative values, as well as any other data deemed relevant to the assessment process.

The assessments would reflect a 1330 Houston time market close and would follow the Platts US publishing schedule.

Please submit any feedback, comments, or questions about this proposal to mrts_biofuelsandfeedstocks@spglobal.com, and pricegroup@spglobal.com by June 21, 2024.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.