Refiners Turn to Bio-Based Jet Fuel to Cushion Green-Diesel Pain

Some US fuel makers are overhauling facilities so they can produce so-called sustainable aviation fuel amid slumping returns from renewable diesel.

Valero Energy Corp., Phillips 66 and Calumet Specialty Products Partners LP are among producers that have retrofitted renewable diesel plants to also make SAF — jet fuel derived from things like cooking grease. Government incentives aimed at decarbonizing the aviation industry are expected to help improve returns on SAF, which is markedly more expensive to produce, according to BloombergNEF.

Although SAF currently is a tiny niche in the global market for jet fuel, it’s seen as key to ...