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Perspectives Paper: SAF Specification as Primary Cost Barrier
Research & Analysis — RD vs SAF Price Differential
Pre-publication draft. Do not distribute. Last updated: Feb 21, 2026.
Core Thesis
The fuel specification (ASTM D7566) is the primary structural barrier making SAF more expensive than renewable diesel (RD). While RD and SAF share identical feedstocks and largely identical production processes, SAF faces a unique combination of specification complexity, qualification barriers, blend limits, processing penalties, and policy asymmetries that collectively create a 2–3× price premium over the petroleum fuel it replaces — a premium that renewable diesel has effectively eliminated in key markets.
1. The Price Evidence
Renewable Diesel: At or Below Petroleum Diesel Parity in California
- AFDC data (2017–2025): RD has consistently tracked near petroleum diesel prices in CA, sometimes selling below ULSD at retail
- OPIS reports: retail sales of RD below petroleum diesel in California (Stillwater Associates, Oct 2024)
- RD production: 4.6 billion gallons consumed in US (2024), ~60% in California
SAF: 2–3× Premium Over Petroleum Jet Fuel
- EASA 2024: Average SAF production cost €1,461/tonne (biofuels) to €7,695/tonne (e-fuels) vs. ~€700/tonne for Jet A
- RMI survey (Sept 2024): SAF green premium $2.34–$3.93/gal → price range $9.40–$10.96/gal
- IATA: Industry paid ~$700M for CORSIA in 2024, projected $1B in 2025
The Paradox: Same feedstock, same plant, dramatically different economics. A HEFA plant producing RD from soybean oil in California achieves price parity with fossil diesel. The same plant, producing SAF from the same oil, sells at 2–3× premium over fossil jet. Why?
2. Specification Differences — The Root Cause
| Feature | Renewable Diesel (D975) | SAF (D7566) |
|---|
| Specification basis | Property-based | Process-based |
| Blend limit | None — 100% drop-in | 10–50% max by pathway |
| New pathway approval | Not applicable — meet D975 = diesel | D4054: 5–7 years, $5–15M |
| Cold flow | Cloud pt: buyer negotiated | Freeze ≤ −40°C; Visc ≤ 8 cSt at −20°C |
| Viscosity at 40°C | 1.9–4.1 mm²/s | (Not binding — cold specs are) |
| Phosphorus | Not specified separately | ≤ 2 ppm |
| Aromatics | Not specified | ≤ 25 vol% (blend) |
| Distribution | Standard diesel infrastructure | Separate chain of custody |
Key Insight: D975 asks "Does this fuel meet these properties?" D7566 asks "Was this fuel made by one of 7 approved processes, at a D4054-certified facility, blended within the approved ratio?" The spec effectively gates market entry by process rather than by properties.
3. Processing Penalty: Same Plant, More Steps, Less Yield
RD production = HDO → Isomerization → Fractionation → ~83% RD yield
SAF production = HDO → Isomerization → Hydrocracking → Fractionation → ~50% SAF + 20% RD + 30% low-value co-products
Key penalties:
- Additional capital: $50–100M+ for hydrocracker + fractionation (farmdoc daily, Jan 2025)
- Yield loss: Credit-eligible fraction drops from 83% to 70% (−13 pp)
- Higher H₂: Hydrocracking is hydrogen-intensive
- Co-products (naphtha, LPG) earn lower/no environmental credits
Baker & O'Brien (Nov 2024): "The conversion of RD to SAF results in an unavoidable increase in low-valued LPG and naphtha. Even though these are 'renewable,' they earn lower incentives than either RD or SAF."
4. Policy Asymmetry: Incentives Favor RD
| Incentive | RD ($/gal) | SAF ($/gal) | Gap |
|---|
| D4 RINs (1.7 vs 1.6 EV) | $1.45 | $1.36 | −$0.09 |
| LCFS | $0.42 | $0.41 | −$0.01 |
| Cap at the Rack (CAR) | $0.30 | $0.00 | −$0.30 |
| 45Z | $0.17 | $0.17 | $0.00 |
| Total incentives | $2.34 | $1.94 | −$0.40 |
Source: Stillwater Associates, Feb 2025 average prices. CI = 40 gCO₂e/MJ, Los Angeles market.
5. Spec Limits with Questionable Technical Justification
Phosphorus ≤ 2 ppm
Limited published data establishing 2 ppm as a critical threshold. HEFA processes using vegetable oils with phospholipids must invest in degumming. What is the actual damage mechanism? At what concentration does it become harmful?
Viscosity: ≤ 8 mm²/s at −20°C, ≤ 12 mm²/s at −40°C
These drive hydrocracking severity. Not all routes require −40°C performance. Could spec dilation unlock volumes?
Blend Limits (10–50%)
Many pathways are blend-limited because full testing hasn't been done, not because of known safety issues. RD has no blend limit whatsoever.
6. Paper Outline (Draft)
- Introduction — The paradox: identical feedstock, different prices
- The Evidence — RD at diesel parity; SAF at 2–3× premium
- Specification Architecture — D975 vs D7566/D4054; property vs process-based
- Processing Economics — HEFA yield, capital, H₂ penalty
- Policy Amplifiers — RIN gap, CAR exclusion, incentive stacking
- Specification Limits Under Review — Phosphorus, viscosity, blend limits
- The Non-Drop-In Alternative — $700B–$1.7T for hydrogen vs. ~$50M for spec reform
- Path Forward — Spec reform opportunities
Target Journals
- Joule (Cell Press) — perspectives format, IF 39.8
- Energy & Fuels (ACS) — IF 5.3
- Nature Energy — policy/systems perspective
7. ICAO SAF Rules of Thumb (Heyne/WSU)
ICAO data developed by WSU for CAEP:
- HEFA yield: 0.83 ton distillate/ton feedstock
- HEFA nth-plant TCI: $448–456M for 1,000 ML/yr
- HEFA MSP: $0.80–1.00/L ($3.03–3.79/gal) without incentives
- Capital cost: $0.4–0.5/L total distillate
8. Data Still Needed
- ☐ D4054 fast-track distillation band data
- ☐ AIAA book chapter details
- ☐ OPIS historical SAF spot price time series
- ☐ Viscosity spray testing results (Heyne/Honeywell)
- ☐ Phosphorus damage mechanism literature
Draft — Feb 21, 2026. Pre-publication. Do not distribute.