The European Union has implemented Sustainable Aviation Fuel (SAF) blend mandates in its member states, starting for bio-SAF in 2025 and for synthetic SAF (e-SAF) in 2030. Various e-kerosene plant projects have taken off in the last years in Europe. However, due to the high investment costs and dependency on feedstock availability, no plant has reached final investment decision yet. In the Netherlands, two full scale e-kerosene plants have been announced to be build in the next decade. This paper estimates the net present value of one of these in the current market conditions of the Dutch aviation fuel market. For this, a real option tree model is created to represent the current risks, investment costs and market state in the Dutch geographical context. In addition, the impact of various policy measures are added to the model to create different policy scenarios. The objective of this paper is to find which policy scenario's yields a positive net present value for the analyzed PtL plant in the Netherlands.

The real option decision tree was composed in various steps. The model is based on an e-jet fuel plant based in the Netherlands with annual jet-fuel production capacity of 50,000 tonnes. The e-fuel mix contains 75% jet fuel, 12.5% diesel and 12.5% naphtha. This plant sources green hydrogen and CO2 externally, therefore does not require investment in direct air capture systems or an electrolyzer. First, the project stages and options were defined as in other energy projects. The length of each is approximated based on the status and expected deployment of current PtL e-kerosene plants. Next, the project investment and value was determined following the findings of previous works. The CAPEX was split up over the investment stages determined previously, and adjusted for inflation. Likewise, the OPEX found in various literature sources was inflation adjusted and averaged. The selling price is modeled to decrease at the same rate as the projected electrolyzer costs because of technology maturity. Market conditions were based on both fuel demand projections in the Netherlands and the European blend mandates for synthetic fuels until 2050. From this, two market condition scenarios were modeled. These were based on whether the modeled plant or its smaller competitor reaches market first. This makes a difference, as the fuel demand in the first years of operation is limited because of lower blend-mandates. Next, the abandon options were modeled by determining the salvage value. The salvage value was defined as the current replacement costs minus the depreciation. For this, the depreciation rates for each investment during both testing and operation were determined. After finding the values, the probability distribution for the options in the different project stages were determined. This was done using the probability ranges as defined in the classical risk matrix. The current and forecasted status of most prominent project and market risks were described, where after the risks were allocated to a probability range. The main value of each was used in the probability distribution. Lastly, the different policy incentives and scenarios were defined...