Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/339466 
Year of Publication: 
2025
Series/Report no.: 
OIES Paper: ET No. 51
Publisher: 
The Oxford Institute for Energy Studies, Oxford
Abstract: 
Drop-in alternative liquid fuels-Renewable Diesel (RD) and Sustainable Aviation Fuel (SAF)-offer material near-term abatement for hard-to-electrify transport segments, such as Aviation and heavy-duty transport; their deployment depends on pathway-specific costs, hydrogen requirements, and policy design. This paper evaluates four production routes-Hydroprocessed Esters and Fatty Acids (HEFA), Fischer-Tropsch (FT), Alcohol-to-Jet (ATJ), and electro-SAF (eSAF/PtL)-including co-processing options across the European Union, the United States, and Brazil, using a harmonized techno-economic model with Monte-Carlo uncertainty to estimate factory-gate costs, decompose cost drivers, quantify hydrogen needs (internal versus external), and compute 50% blend prices relative to fossil comparators. Per kg of fuel at factory gate, results show a stable cost ranking: HEFA sits at $1.6-$1.1/kg , FT clusters around $1.6-$1.4/kg , ATJ lies at $2.1-$1.6/kg , eSAF is near $5.3-$5.0/kg. With feedstock emerging as the dominant lever for HEFA/ATJ, capital and site services for FT, and energy inputs (clean H₂ and power) plus CO₂ supply for eSAF; hydrogen-price sensitivity is decisive only for eSAF. Across the different locations considered within this study at 50% blends, parity expressed as carbon-price equivalents indicates ≈$130-$45/tCO₂ for HEFA, ≈$130-$90/tCO₂ for FT, ≈$210-$125/tCO₂ for ATJ, and ≈$710-$670/tCO₂ for eSAF. On this basis, the paper proposes a sequenced strategy: scale HEFA and FT now with blending-credit architectures and feedstock/utility enablers, expand ATJ where alcohol logistics confer advantage, and unlock eSAF as clean-hydrogen and CO₂ costs fall, aligning instruments with pathway-specific cost drivers.
Subjects: 
Alcohol to Jet (ATJ)
Aviation
Aviation decarbonisation
Brazil
Carbon pricing
Drop in fuels
eSAF
European Union
Fischer-Tropsch (FT)
Fuel and Climate Policy
Hard to abate transport
Heavy transport
HEFA
Hydrogen
Power to liquids (Ptl)
Renewable diesel (RD)
Sustainable Aviation Fuel (SAF)
techno-economic analysis
United States
ISBN: 
978-1-78467-287-4
Document Type: 
Working Paper

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