France Sustainable Aviation Fuel (SAF) Production Facility Feasibility Study

Executive Viability Abstract

This feasibility study evaluates the development of a 100,000 tonnes-per-annum (TPA) Sustainable Aviation Fuel (SAF) production facility in the Fos-sur-Mer industrial cluster, France. Utilizing HEFA (Hydroprocessed Esters and Fatty Acids) technology, the project capitalizes on France's ReFuelEU mandates and TIRUERT tax incentives. With a projected Capex of €315 million and a base-case IRR of 14.2%, the facility is positioned to serve the high-demand hubs of Marseille-Provence and Paris-CDG, leveraging established maritime and pipeline infrastructure.

## Executive Feasibility Thesis The project aims to establish a front-runner SAF refinery in Southern France to meet the urgent supply gap created by the EU’s 'Fit for 55' package. The thesis rests on three pillars: first, the mandatory 2% SAF blending requirement starting in 2025, scaling to 6% by 2030; second, the strategic proximity to the Port of Marseille for feedstock imports; and third, the maturity of HEFA technology which allows for immediate commercial-scale deployment. By targeting 100,000 TPA, the facility captures approximately 8% of the projected French SAF demand for 2027, ensuring high bankability through long-term off-take agreements with Tier-1 airlines. ## Technical Feasibility & Operational Specifications The facility will utilize a multi-feedstock HEFA process capable of processing Used Cooking Oil (UCO), Animal Fats (Cat 1 & 2), and Vegetable Oil Processing Residues. - **Process Configuration:** A two-stage catalytic process involving hydro-deoxygenation followed by isomerization/cracking to optimize jet fuel yield over bionaphtha and bio-LPG. - **Hydrogen Integration:** On-site 20MW PEM electrolyzer for green hydrogen production to satisfy the 'Renewable Fuels of Non-Biological Origin' (RFNBO) requirements under RED III, supplemented by grid-sourced low-carbon hydrogen from the local industrial cluster. - **Capacity Utilization:** Targeted at 92% (8,050 operating hours per annum), allowing for a 14-day annual maintenance shutdown. - **Output Mix:** 80% SAF (ASTM D7566), 15% Renewable Diesel (HVO), and 5% Bio-LPG/Naphtha. ## Detailed Capital Expenditure (Capex) The total estimated investment is **€315.5 Million**, broken down as follows: 1. **Feedstock Pre-treatment Unit (€48.0M):** Advanced filtration and degumming systems to handle varied impurity levels in UCO and tallow. Unit cost: €480 per annual tonne of capacity. 2. **Hydroprocessing & Isomerization Core (€132.0M):** Reactor vessels, high-pressure compressors, and noble-metal catalyst loads. Unit cost: €1,320 per annual tonne. 3. **Green Hydrogen Electrolyzer (€38.5M):** 20MW PEM system including rectification and compression. Costed at €1.9M per MW. 4. **Storage & Logistics Infrastructure (€42.0M):** 60,000 m³ of total tankage for feedstock and finished products, plus pipeline connection to the TRAPIL/SPSE network. 5. **Engineering, Procurement, and Construction (EPC) (€55.0M):** Fixed-price turnkey contract with a 10% contingency buffer to mitigate inflationary pressures on steel and specialized labor. ## Realistic Operating Expenditure (Opex) Opex calculations are based on local French energy prices and labor market standards. - **Feedstock Procurement (€1,150/tonne):** Average weighted cost of UCO and animal fats. This represents ~75% of total Opex. Total annual cost: €126.5M (at 110k tonnes input). - **Catalyst and Chemicals (€6.5M):** Annual replacement cycles for hydro-deoxygenation and cracking catalysts. Unit cost: €65/tonne of output. - **Electricity and Utilities (€14.5M):** Based on French industrial retail rates of €115/MWh, assuming high-load industrial pricing. - **Labor and Personnel (€7.2M):** 90 FTEs including process engineers, safety officers, and operators. Average cost of €80,000/FTE (including 45% social charges). - **Maintenance and Insurance (€9.5M):** Calculated as 3% of initial Capex per annum. ## Financial Model & Sensitivity Range on ROI/IRR **Core Financial Assumptions:** - **Cost of Capital (WACC):** 7.8% (assuming 60:40 Debt/Equity ratio). - **Market Size (Local):** 1.4M tonnes/year total jet demand in France by 2026. - **Project Life:** 20 years. **ROI/IRR Sensitivity Analysis:** - **Base Case (14.2% IRR):** SAF price at €2,400/tonne, UCO at €1,150/tonne, 92% capacity utilization. Payback period: 7.2 years. - **Optimistic Case (19.4% IRR):** SAF price at €2,850/tonne (driven by high TIRUERT credit values), UCO at €1,000/tonne, 95% capacity utilization. - **Pessimistic Case (8.1% IRR):** SAF price at €2,000/tonne, UCO price spikes to €1,400/tonne, 80% capacity utilization due to supply chain bottlenecks. ## Regulatory & Environmental Compliance Frameworks Project viability is intrinsically linked to the French and EU regulatory landscape: - **ReFuelEU Aviation:** Mandates a sliding scale of SAF blending; non-compliance fines are set at 2x the price difference between fossil kerosene and SAF, effectively creating a price floor. - **TIRUERT (French Tax):** Provides a mechanism where fuel distributors can offset carbon taxes by purchasing SAF certificates. The current value of these certificates in France provides a significant premium over the physical fuel price. - **RED III Compliance:** The facility must demonstrate a minimum of 65% Greenhouse Gas (GHG) savings compared to fossil equivalents. Using UCO, this project targets an 85% reduction, qualifying it for 'High Annex IX' status. - **Environmental Permitting:** Requires 'ICPE' (Installation Classée pour la Protection de l’Environnement) authorization in France, involving a 12-month public inquiry and impact assessment. ## Strategic Takeaways 1. **Feedstock Security:** The primary risk is UCO volatility; the project should secure 50% of feedstock via long-term (5-year) forward contracts. 2. **Location Advantage:** Fos-sur-Mer offers synergy with existing refinery infrastructures, reducing the Capex for pipeline connections and waste-water treatment. 3. **Monetization of By-products:** Sale of Bio-LPG into the French heating market and Bionaphtha to the local steam crackers provides a vital secondary revenue stream that improves IRR by 1.5%.