Economic Impact and Risk Analysis of Integrating Sustainable Aviation Fuels into Refineries

The growth of the aviation industry coupled with its dependence on energy-dense, liquid fuels has brought sustainable aviation fuel (SAF) research to the forefront of the biofuels community. Petroleum refineries will need to decide how to satisfy the projected increase in jet fuel demand with either capital investments to debottleneck current operations or by integrating bio-blendstocks while aligning with industry decarbonization objectives. Consequently, a Monte-Carlo simulation framework was developed to compare jet production strategies on a risk-adjusted, economic performance basis. At the core of the framework, a refinery optimization model, developed in AspenTech’s PIMS linear programming software, was used to identify optimal jet production strategies given crude oil prices and product demands. Randomized crude oil price and product demand projections were then fed to the refinery model while simulating (1) debottlenecking with capital investments and (2) SAF integration scenarios to get distributions of economic performance in terms of net present value. Resulting distribution highlight both the economic impacts and risks associated with both scenarios. Furthermore, incentive structures aiming to de-risk initial SAF production from the refiner’s perspective are explored. Results indicate that variable incentive structures with market sensitivity have the potential to greatly diminish the economic risks associated with SAF production and can likely be generalized to de-risk other biofuel investments.