Trade Dynamics and the SAF Value Chain
Stefan Unnasch
Managing Director
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Life Cycle Associates
Brian D. Healy
Chief Economist
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Lifecycle Associates
Introduction
Trade dynamics, including policy, for feedstocks and finished fuel will grow in importance for the SAF value chain as the industry scales. U.S. SAF production today depends not only on domestic inputs but also on imported feedstocks and intermediate products. In the meantime, global markets for SAF are growing, driven by various policy priorities, and may require imports to meet their stated targets. These evolving trade dynamics will impact the ability of the U.S. industry to fully scale
Current Trade in Feedstocks and Finished SAF
Although U.S. SAF production remains small, about 20-30 million gallons annually, international trade already plays a key role in supply chains:
Feedstock Imports: The U.S. imports used cooking oil (UCO), tallow, and other waste fats from Canada, China, Singapore, and the EU.
Finished Fuel Imports: Small but growing volumes of SAF are imported from the EU and Singapore and may grow depending on U.S. policy and industry growth.
Potential Exports: Looking ahead, U.S. producers see opportunities to export SAF as international policies require volume for compliance.
Tariff Landscape for SAF and Competing Fuels
The current tariff structures for SAF and petroleum-based jet fuel are inconsistent across key markets. In most cases, conventional jet fuel has zero or near zero tariff rates, depending on the trading partner, while SAF faces either higher tariffs or unclear treatment under existing customs codes. In the U.S., imported SAF is frequently classified under biodiesel or chemical feedstock codes, resulting in tariffs as high as 6.5%. In practice, importers sometimes attempt to classify SAF as kerosene-type jet fuel, which would qualify for zero tariffs, but may be subject to inconsistent treatment.
Similar dynamics are playing out in the European Union, where conventional jet fuel also enters tariff-free, while SAF can face tariffs of 6.5% to 8% depending on its classification. The U.K. and Japan have likewise not fully harmonized tariff treatment for SAF, with some imports facing duties while petroleum-derived jet fuel remains exempt. A key driver of this problem is the lack of clear international classification for SAF under the Harmonized System (HS). Without an agreed tariff code, SAF is often treated as a biofuel or chemical rather than an aviation fuel, impacting tariff rates and ultimately trade.
Tariffs and Technical Barriers to Trade Create Risk for SAF Market
Tariffs and technical barriers to trade, impact the growing SAF market. Higher feedstock costs are one clear impact where increases in UCO or tallow prices would create margin pressure for producers. Imported SAF would also become disadvantaged. Higher tariffs on finished SAF imports could shrink the supply pool just as airlines seek to ramp up usage. Threats to U.S. export competitiveness, will also impact the industry over the long term.
As with most renewable fuel policies, trade will play a critical role for the global SAF industry by allowing countries to meet their policy requirements while a domestic industry is built out. Consistently meeting the targets of a policy, through imports, creates certainty throughout the entire value chain. Moreover, this certainty supports access to credit, compounding the sector’s growth.
Strategic Priorities for U.S. Industry and Policymakers
As SAF scales, trade policy must evolve alongside production. For the U.S. to maintain competitiveness and ensure supply chain resilience, several actions should be prioritized:
Work through U.S. Customs and USTR to clarify SAF HS codes and seek parity with jet fuel tariffs.
Pursue zero-tariff agreements for SAF with key partners—especially the EU, U.K., Japan, and Canada.
Align certification frameworks (CORSIA, ISCC and RSB) to avoid technical barriers to trade.
As the global aviation industry nears their adoption goals for SAF, trade in feedstocks and finished fuels will become increasingly strategic for the industry as a whole.
About Life Cycle Associates
Life Cycle Associates is a trusted partner for clients worldwide, assisting in emissions reduction and environmental impact mitigation. Our expertise lies in life cycle greenhouse gas emission analysis of fuel and energy production pathways, with extensive use of models such as R&D GREET, 40BSAF-GREET, 45ZCF-GREET, CA-GREET4.0 and GTAP.
We offer services that include the modification of the California GREET model, development of initial pathway documents for the LCFS, support for fuel pathways under the LCFS, RFS2, and EU Renewable Energy Directive, as well as determining the applicability of Inflation Reduction Act provisions. A significant portion of our work in biofuels and other alternative fuels concerns the evaluation of new fuel production technologies, their energy balance, and economics.
Please let us know if you have a question or would like further information about Life Cycle Associates’ work and services. You can learn more about our SAF experience on our website: https://www.lifecycleassociates.com/Experience/aviation-fuel-life-cycle-analysis/.