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

Platts, part of S&P Global Commodity Insights, will 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 and greenhouse gas 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 assessments to provide transparency and continue the development of the SAF market. Platts originally proposed the launch of market-based SAF assessments on May 28, in a subscriber note available here.

Platts will 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 will reflect a reference Carbon Intensity 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 will be 52.8% -- rounded to 52% rounded-- therefore the federal SAF tax credit equals to $1.27/gal ($1.25/gal plus 2 cents/gal).

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

Neat SAF assessments

Platts will launch two neat SAF daily assessments.

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

The US California SAF price will be assessed on a delivered at place 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 will also be considered but may be normalized back to the basis location.

The US Illinois SAF price will be assessed on a DAP incoterm basis and reflect SAF delivered via railcar or barge to the Chicago area. Neat SAF delivered to other locations within Illinois will also be considered but may be normalized back to the basis location.

Both assessments will reflect delivery five to 25 days forward.

Blended aviation fuel assessment

Platts will launch two blended jet and SAF aviation fuel price assessments.

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

The California 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 will 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.

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

Deliveries into other Illinois 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, will 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 will also be inclusive of the California Low Carbon Fuel Standard carbon credit, federal SAF tax credit and D4 biomass-based diesel Renewable Identification Number.

The Illinois neat SAF assessment, basis Chicago, and the US Illinois blended aviation fuel assessment, basis Chicago, will both 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 will be inclusive of the Illinois SAF tax credit, federal SAF tax credit and D4 biomass-based diesel RINs.

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

Please submit any feedback, comments, or questions about these assessments to mrts_biofuelsandfeedstocks@spglobal.com, and pricegroup@spglobal.com.

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.