How to De-risk SAF Investments: A Financial & Tech Due Diligence Framework

The SAF investment cycle connects nature, production, and aviation, with rigorous due diligence driving scalable growth and value creation

The SAF Promise and Its Peril

Sustainable Aviation Fuel (SAF) sits at the center of net-zero aviation strategies. Governments are tightening mandates, airlines are rushing to lock in offtake agreements, and institutional investors are under pressure to deploy billions into decarbonization. Yet beneath this enthusiasm lies a stark reality: many SAF projects struggle to clear investment committees (ICs).

Why? Because proformas often oversell the upside and undersell the risks. IRRs look compelling on paper, but when stress-tested against feedstock volatility, policy fragility, and technology uptime, the numbers collapse. Investors have already seen projects stall after policy pivots, developers underestimate operating expenses, or scaling curves fail to match the timelines promised.

The challenge is not whether SAF will be needed — the aviation sector has no other scalable decarbonization option in the next 20 years. The real challenge now is identifying which SAF projects are truly bankable when subsidies taper, feedstocks tighten, and technologies face operating realities.

This blog introduces a financial and technology due diligence framework that goes beyond the data room, slide decks and aspirational LCAs and right into the granular mechanics of IRR resilience helping investors distinguish between hype and resilience

Financial Lenses: What Actually Moves IRR

At its core, de-risking SAF requires brutal clarity on what drives project economics. The temptation is to assume policy incentives (LCFS, RINs, EU ETS, 45Z in the U.S.) are sufficient. But history across renewables shows subsidy-led IRRs can evaporate when costs or yields slip by even 10–15%.

A disciplined investor should therefore probe:

1. Capex per gallon – Is this in line with peer benchmarks? An HEFA unit leveraging refinery integration should sit far lower than a greenfield PtL facility.

2. Yield assumptions – Are they based on pilot data or extrapolated projections? Over-optimism on conversion efficiency has killed many pilots.

3. OpEx inputs – Particularly hydrogen costs (for PtL and AtJ) and lipid/ethanol feedstock volatility.

4. Revenue durability – Are offtakes indexed to crude spreads, or are they flat-price agreements at risk if jet demand dips?

5. Policy buffers – Does the IRR collapse if LCFS credit prices halve?

A side-by-side sensitivity view helps sharpen this lens:

Variable	High-Risk Exposure	De-risking Lever
Capex Inflation	EPC quotes inflated 25–40% since 2021	Leverage stranded assets; modular retrofits
Feedstock Cost	Soy, tallow, ethanol futures highly volatile	Long-term supply contracts; multi-feedstock flexibility
Policy Reliance	IRR collapses without LCFS/RIN support	Build margin shields via co-products (naphtha, LPG)
Technology Scale-up	Lab-to-commercial often overstated	Insist on demonstrated >1,000 hr continuous runs

The investor’s question is no longer “what’s the headline IRR?” but “what survives three stress tests?”

Technology Lenses: Sorting Pathways Without Hype

SAF is unique because there is no single dominant pathway. Each — HEFA, AtJ, PtL, FT — carries its own maturity curve, capex intensity, and feedstock constraint.

A technology due diligence framework focuses on:

• Maturity: Has the pathway cleared >1 Mtpa scale, or is it still at TRL 6–7?

• Feedstock resilience: Does it rely on scarce lipids, or can it tap into waste streams or CO₂ + green hydrogen?

• System integration: Can the pathway dovetail with existing refineries, or does it demand entirely new infrastructure?

• Certification pathway: ASTM approvals are not uniform across chemistries; some face blend wall constraints.

Comparison at a glance:

Pathway	Status	Strengths	Risks
HEFA	Commercial (>15 plants globally)	Proven, refinery-integration friendly	Lipid scarcity, food vs fuel tension
AtJ	Demo/pilot scaling	Leverages ethanol oversupply; SAF drop-in	Still expensive; yield penalties
Fischer–Tropsch (FT)	Few large pilots	Flexible feedstock (biomass, MSW, syngas)	High capex, complex ops
Power-to-Liquids (PtL)	Emerging	Green hydrogen + captured CO₂	Hydrogen cost curve, electrolyzer maturity

The framework avoids hype by weighting each against execution risk, not just climate appeal.

Where Execution Risk Creeps In

Investors often underestimate the operational bottlenecks that derail IRRs post-FID:

• Feedstock logistics: A plant designed for used cooking oil cannot suddenly pivot to tallow without major re-engineering.

• Catalyst lifetimes: Shorter-than-projected cycles inflate opex.

• Maintenance cycles: High downtime erodes offtake credibility.

• Permitting resets: Especially for FT and PtL, where CO₂ capture infrastructure triggers new regulatory reviews.

Here, investors should demand operational track records from technology vendors, not just LCAs or grant awards.

A Playbook for Investors: Aligning Finance with Tech Reality

De-risking SAF requires treating projects not as “green” but as infrastructure with commodity exposure. That means:

1. Interrogate assumptions – Ask for downside scenarios on feedstock pricing, hydrogen costs, and LCFS spreads.

2. Demand multi-path resilience – Favor projects with retrofit optionality (e.g., ethanol-to-AtJ that can pivot to chemicals).

3. Value execution discipline – Back teams that have delivered uptime, not just raised grants.

4. Insist on transparency – Full data room access: pilot logs, catalyst change-outs, downtime records.

Who Gains from This Framework?

• Investors: Gain confidence that their IRRs won’t collapse with a policy swing.

• Airlines and offtakers: Avoid stranded supply agreements with underperforming projects.

• Policymakers: Showcase SAF projects that deliver durable, not just subsidized, decarbonization.

In a sector crowded with PowerPoints, the winners will be those who build SAF projects that are shock-absorbing, capital-efficient, and execution-tested.

Looking Ahead: SAF as a Resilience Test

SAF investment is more than climate virtue; it is a stress test for 21st-century infrastructure investing. The coming decade of unpriced fragilities — supply chain weaponization, ESG fatigue, generative AI shifts — means capital will reward projects that can absorb volatility rather than chase subsidies.

By embedding a Financial & Technology Due Diligence Framework, investors position themselves not just to fund the next SAF plant, but to define the resilient systems that will underpin aviation’s future