THE COSTS OF PRODUCTION OF ALTERNATIVE JET FUEL: A HARMONIZED, STOCHASTIC ASSESSMENT

This study quantifies and compares the costs of production for six alternative jet fuel production pathways using consistent financial and technical assumptions as well as government policies that incentivize the use of these fuels. Uncertainty in revenues, fuel yield, and feedstock and other input costs is propagated through the analysis using Monte Carlo simulations. The six processes assessed are hydroprocessed esters and fatty acids (HEFA), advanced fermentation (AF), conventional gasification and Fischer-Tropsch (FT), aqueous phase processing (APP), hydrothermal liquefaction (HTL), and fast pyrolysis and hydroprocessing (FPH). A techno-economic assessment using a discounted cash flow rate of return method is employed to estimate the minimum selling price (MSP) and net present value (NPV) of each plant. The results indicate that none of the six processes would be profitable in the absence of government incentives, with HEFA using yellow grease, HEFA using tallow, and FT using MSW revealing the lowest mean jet fuel prices at $0.91/liter ($0.66/liter-$1.24/liter), $1.06/liter ($0.79/liter-$1.42/liter), and $1.15/liter ($0.95/liter-$1.39/liter), respectively. This study also includes an assessment of plant performance in the United States under the Renewable Fuel Standard (RFS2) with incentives in the form of Renewable Identification Numbers (RINs) and tax credits applied to fuel products from each pathway. Results from this analysis indicate that some pathways could achieve positive NPV with relatively high likelihood under existing policy supports, with HEFA and FPH revealing the highest probability of positive NPV at 94.9% and 99.7%, respectively, in the best-case scenario.