Despite the daunting challenge of bringing sustainable aviation fuel (SAF) down to price parity with conventional jet fuel, momentum in the US continues to build. Even under unsupported market economics, many developers are identifying opportunities to leverage subsidies, credit programs, and new feedstock pathways to close the gap.
One of the most promising short-term routes is through waste-derived biogas and forestry residues. These feedstocks offer both an abundant domestic supply and a strong pairing with the revenue stacks already on the table in federal and state markets.
A particularly compelling development comes from Natural State Renewable, a US-based developer that has partnered with French technology firm Axens. The company plans to produce 31 million gallons per year of SAF from forestry waste. This resource is both abundant and currently underutilized in its operating region.
By tapping into these residues, Natural State can turn a low-value byproduct into a high-value jet fuel alternative. And there is plenty of this byproduct to go around as the US continues its reign as a top global lumber producer.
What sets the project apart is its integration of carbon capture and storage (CCS) into the conversion process. The company says CCS can achieve exceptionally low carbon output that actually pushes the fuel into negative emissions territory. In markets such as California’s Low Carbon Fuel Standard (LCFS), which rewards fuels based on the amount of CO₂ avoided, this level of performance could deliver enormous economic benefits.
The US SAF subsidy framework now also prioritizes tons of conserved carbon over gallons produced. The counting difference reinforces the financial value of ultra-low or negative carbon intensities even if those reward levels remain capped for now.
The economic case becomes even clearer when looking at highly negative carbon intensities.
Each incremental reduction in carbon intensity translates directly into more credits under low-carbon fuel systems such as the LCFS in California or the Clean Fuel Regulations (CFR) in Canada. In addition to those programs, producers can layer on the 45Z tax credit for SAF under the Inflation Reduction Act and generate D3 Renewable Identification Numbers (RINs) for qualifying as a cellulosic biofuel.
RIN prices in the D3 category remain strong because supply has consistently fallen short of mandated volumes. That supply gap gives SAF producers a valuable cushion of demand, keeping credit values elevated.
The result is that SAF projects with the right feedstock and process profile can begin to look competitive with fossil jet fuel. And this comes even before accounting for longer-term scale efficiencies.
Federal and state subsidies are not the only tools in the stack. Natural State and other producers also see a significant upside from selling Scope 3 environmental attributes to corporations under pressure to meet their own net-zero or carbon-neutral targets. Voluntary buyers often pay a premium for credits tied to verified SAF use, providing producers with yet another revenue stream.
Alongside growing corporate demand, policy-driven incentives also make a strong case to US producers. Taken together, state-level programs, federal credits, and voluntary market attributes can create a pricing structure that rivals conventional jet fuel.
For companies like Natural State, the business case rests on a carefully constructed stack of rewards that touches nearly every corner of the carbon reduction ecosystem.
Forestry residues are not the only SAF production pathway attracting attention. Biogas is emerging as an equally powerful feedstock option. Developers are increasingly looking to capture gas from landfills, wastewater treatment plants, and agricultural operations.
These municipal sources have historically had to pay to flare or dispose of the gas. This dynamic creates a unique upside: producers may actually be paid to take their feedstock.
Through a renewable conservation of wastes, several benefits emerge:
The challenge, however, lies in scaling logistics.
Collecting, upgrading, and transporting biogas in usable volumes to the right locations is no small feat. Infrastructure investments will be required to aggregate supplies and ensure steady flows into conversion facilities.
Despite the challenges, the underlying economics are compelling. With feedstock costs potentially near zero (or even negative), biogas pathways may prove among the most cost-competitive options for meeting SAF targets in the near term.
The US SAF market is still in its early stages. But as the data shows, the trajectory is becoming clearer.
Forestry waste and biogas are no longer niche ideas. They are emerging as mainstream contenders for supply growth.
With the right policy support and continued investment, these pathways have the potential to achieve cost parity with conventional jet fuel much sooner than once thought possible. For now, the focus is on aligning technology, logistics, and incentives.
If biogas producers can meet carbon intensity targets and build the necessary infrastructure, the US may be on the verge of successfully scaling SAF to economic viability and environmental transformation.