The State of Sustainable Transportation Fuel

Alex Rivera 4

Alright, everyone, welcome back to Digest This: Unpacking Our Sustainable Future. I'm Alex, and as always, I'm joined by Emily—a real powerhouse when it comes to environmental policy analysis. So, this week, we’re getting into sustainable fuels—but I mean for everything on wheels, rails, and propellers. Not just cars, but trucks, trains, ships... all of it. Emily, have you seen the European Commission’s new plan for transport?

Emily Nguyen 4

Yep! It’s kind of a "go big or go home" strategy, right? They’re putting serious money and muscle into renewable and low-carbon fuels across road, shipping, and even rail sectors. The ambition is impressive—they want a unified green push, not just piecemeal stuff for each sector.

Alex Rivera 4

Exactly. And their approach relies on a pretty dense web of regulations: the EU Emissions Trading System (which, I always say, is the carrot and the stick rolled into one), those catch-all frameworks that make CO2 a business liability. But it’s not just about forcing companies—they’re actually trying to make it pay to go green, with tax advantages and funding for research, innovation... the works.

Emily Nguyen 4

But can we talk about the hurdles for a sec? Because, yeah, the vision is big, but real-world execution slows down when countries can't agree on incentives. Even with the EU driving unified targets, the patchwork of national policies and financial incentives complicates things a lot.

Alex Rivera 4

Don’t get me started on that! It’s something we saw, you know, in Episode 10 when we talked about RNG rolling out for city buses and even garbage trucks—policies matter, but if you’re getting paid to use diesel, why would you switch? I think the saving grace is how fast tech is moving. You’ve got scalable biogas, hydrogen, electrification for rail, more efficient shipping fuels... the market’s starting to reward innovation even if policy’s lagging in some areas.

Emily Nguyen 4

And businesses are catching on. With regulations like the EU ETS biting and supply chains getting greener, commercial adoption sort of snowballs. But—there’s still that lack of a really cohesive push. Until we see more alignment—both on incentives and phasing out old subsidies—progress is going to be choppy. That’s just how it is right now.

Alex Rivera 4

Alright, so let’s focus in on aviation—you’ve probably seen the big news about United Airlines, right? They just started using Neste’s Sustainable Aviation Fuel at Houston, Newark, and Dulles. That’s a real milestone for the U.S. market. But, as excited as I am, I gotta ask: is this the breakthrough, or just scratching the surface?

Emily Nguyen 4

That’s a good question, Alex. The scale is impressive—United now uses SAF at some of the country’s busiest airports, and Neste’s fuel is made from things like used cooking oil and animal fat waste. Neste says it can cut up to 80% of greenhouse gas emissions over its lifecycle compared to conventional jet fuel. I mean, if you’re blending up to 50% with regular fuel and still using existing engines, that’s pretty efficient, technology-wise.

Alex Rivera 4

The thing is—and not to rain on the parade—The International Air Transport Association put out a warning recently. They’re projecting that SAF will meet only about 0.7% of airlines’ global fuel needs in 2025. That’s—well, honestly, that’s a drop in the bucket given the huge demand for jet fuel. It’s like, the headlines are great, the pictures are great, but we’ve still got this supply bottleneck and sky-high price. United may be leading in the U.S. with over 4,300 metric tons last year, but the overall market is stuck at the launchpad in a way.

Emily Nguyen 4

Right, and the policy and price hurdles just add to it. Look at what’s happening in Europe with the ReFuelEU Aviation regulation. The mandates kicked in this year—2% minimum SAF blending now, aiming for 70% by 2050. That’s a huge climb. But airlines are getting squeezed because the compliance costs are, honestly, massive. SAF is five times more expensive than fossil jet fuel in some cases because of both production costs and new fees.

Alex Rivera 4

And it isn’t just Europe—we’ve got similar moves in the U.K., Asia… even Singapore is rolling out a levy for SAF on all departing passengers. But is it enough to jumpstart the market? Well, United’s rollout with Neste shows what’s possible—leveraging existing pipelines, taking advantage of tax credits like in Illinois, and working with suppliers willing to scale up. But like I said, if mandates come before there’s enough market supply, you just get these awkward price spikes. That can slow things down rather than speed ‘em up.

Emily Nguyen 4

And then there’s infrastructure. Scaling up to meet these new regulations means investment not only in technology but also in getting that SAF where it’s needed—terminals, blending, pipelines, the lot. It’s not always keeping up with the ambition. And as Lauren Riley from United pointed out, real progress will need even stronger support from federal and state governments, and a willingness to rethink those incentive structures. Until then, these impressive case studies are promising—but they’re also reminders of the challenges ahead.

Emily Nguyen 4

Looking forward, I keep circling back to this question: What’s really going to drive the next big leap—will it be mandates, market demand, or some combination of both? We’re seeing a lot of creative policy, like India’s biofuels alliance, which is shooting for a 2% SAF blend for international flights by 2028, with guaranteed pricing and technical support baked in. Or Singapore’s passenger SAF levy. Then in the U.S., you’ve got the SAF Grand Challenge, which is mostly about giving producers tax credits to scale up to 3 billion gallons by 2030.

Alex Rivera 4

Yeah, and there’s innovation everywhere—synthetic fuels, Power-to-Liquid stuff, new feedstocks. But, I mean, the scale we need? It’s massive. If mandates keep racing ahead of what the market can actually provide, you get blowback. Airlines pay premium after premium, and it actually delays real change—same thing The International Air Transport Association called out with the high compliance costs in Europe. But then, on the flip side, if we wait for market forces alone, it’s probably too slow for climate needs, right?

Emily Nguyen 4

Yeah, and the patchwork of policies isn’t helping. There’s Carbon Offsetting and Reduction Scheme for International Aviation and the International Civil Aviation Organization’s global frameworks setting the baseline, but uptake and incentives still vary so much region to region. I sometimes wonder, can we actually achieve a holistic global approach? Or are we stuck with regional pilots for the foreseeable future?

Alex Rivera 4

Real transformation needs those cross-sectoral coalitions. Public, private, big companies, startups—everybody. It’s the only way to fill the gaps, not just with funding, but with technical know-how and regulatory consistency. I know, sounds kind of... utopian? But I think the ideas are finally being taken seriously.

Emily Nguyen 4

Maybe that’s what marks this moment—people are actually starting to realize that broken incentives or policies don’t just slow progress, they sometimes make the problem worse or cause odd market reactions. Hopefully, as new technologies like synthetic SAF or improved feedstocks scale, we’ll see the price gap close and barriers come down. But until there’s a coordinated policy push—and commitment from investors—we’re always going to face that start-stop progress we’ve been talking about.

Alex Rivera 4

Absolutely. And as we’ve covered in past episodes, every sector—from shipping to agriculture to city transit—faces this same dance between policy, technology, and market reality. The good news is, momentum’s building. So I guess we’ll leave it there for today, but you know us—we’ll be back to track how these policies, incentives, and tech shake out for the future of sustainable transport.

Emily Nguyen 4

Definitely, Alex. Thanks for joining us today, everyone—always a pleasure to dig in with you. Take care, and we’ll catch you on the next episode of Digest This.

Alex Rivera 4

Alright, have a good one, Emily. See you next time, everybody!