Drop in decarbonization : techno-economic benchmarks, hydrogen needs, and policy design of SAF and renewable diesel

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.