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Climate-Tech to Watch: Sustainable Aviation Fuel

Climate-Tech to Watch: Sustainable Aviation Fuel
October 17, 2022

Sustainable aviation fuel (SAF) will play the most significant role in meeting President Biden’s goal of a zero-carbon aviation sector by 2050, but significant progress must be made to scale up production and bring down costs.

KEY TAKEAWAYS

Commercial aviation accounted for 2.4 percent of global carbon dioxide (CO2) emissions in 2018, and emissions are set to triple by 2050 if policies are not adopted to reduce them.
Few decarbonization options are available for the aviation industry, and they are costly. Technologies such as batteries and liquid hydrogen fuel are far from commercially ready for this application.
SAF, a type of jet fuel made from sustainable feedstocks, is already available on a limited commercial scale. It can be used in existing aircraft to curb emissions in the near term without significant changes to aircraft design and infrastructure.
The most widely available type of SAF, made from waste oils and fats, faces significant feedstock constraints. Progress is being made in the United States and globally to demonstrate the commercial viability of other pathways.
Recently implemented measures such as tax credits for SAF production will encourage scale-up and bring down costs, but ambitious targets remain well out of reach.
Meeting these targets will require significant increases in research, development, and demonstration (RD&D) investment by the federal government as well as sustained industry leadership and international cooperation.

Key Takeaways


Contents

Key Takeaways 1

What Is It? 3

Role of SAF in the Transition to Clean Energy 3

Types of SAF. 4

Comparison of Feedstocks and Production Pathways 5

Global Progress 7

Progress in the United States 7

Key Policy Issues 8

Looking forward. 9

Endnotes 9


 

What Is It?

Sustainable aviation fuel (SAF) is jet fuel produced from sustainable feedstock, usually waste resources, renewable biomass, and captured carbon. It has a much lower carbon footprint than do fossil-based jet fuels and is considered a “drop-in” fuel, meaning it can be blended with other fuel types to reduce emissions from aviation without any changes to aircraft design or existing infrastructure.

Timeline

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Role of SAF in the Transition to Clean Energy

In 2018, commercial aviation accounted for an estimated 2.4 percent of global CO2 emissions. As air travel returns to pre-pandemic levels and growth rates, especially in developing nations, emissions from the aviation sector are expected to triple by 2050.[1]

Aviation is one of the hardest-to-abate sectors. Few decarbonization options are available, and they are costly.[2] Technologies such as batteries and liquid hydrogen fuel are far from commercially- ready for this application—due to challenges such as storage of liquid hydrogen on aircraft—and are unlikely ever to be able to power large or long-haul flights. (See table 1.) SAF, which is already available in modest amounts on a commercial scale, may offer a way to curb emissions using existing aircraft designs and infrastructure if costs decline and production capacity increases. The International Air Transport Association (IATA) estimates that as much as 65 percent of the emissions reductions needed to reach net zero by 2050 could come from replacing conventional jet fuel with SAF.[3]

Table 1: Where low- and zero-carbon technologies could be deployed in commercial aviation[4]

2025

2030

2035

2040

2050

Commuter

9–19 seats

< 60 minute flights

< 1% of industry CO2

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Regional

50–100 seats

30–90 minute flights

~3% of industry CO2

SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Electric or hydrogen fuel cell and/or SAF

Short haul

100–150 seats

45–120 minute flights

~24% of industry CO2

SAF

SAF

SAF and possibly some hydrogen

Hydrogen and/or SAF

Hydrogen and/or SAF

Medium haul

100–250 seats

60–150 minute flights

~43% of industry CO2

SAF

SAF

SAF

SAF and possibly some hydrogen

SAF and possibly some hydrogen

Long haul

250+ seats

150 minute + flights

~30% of industry CO2

SAF

SAF

SAF

SAF

SAF

While SAF offers significant emission reductions compared with fossil-based jet fuel, it is not entirely emission-free. It will ultimately need to be paired with other low- and zero-carbon technologies for aviation to reach net zero, or with direct air capture to offset residual emissions.

Types of SAF

A SAF production pathway is defined by the feedstock, production process, and type of fuel that is produced. The American Society of Testing and Materials (ASTM) has approved seven production pathways for drop-in use in aviation, with more on the way. Most pathways are approved for blending up to 50 percent with conventional jet fuel.[5]

1. Gasification and Fischer-Tropsch (Gas/FT): The Gas/FT pathway takes a carbon-containing material such as municipal solid waste (MSW) and breaks it into hydrogen and carbon monoxide to form a synthesis gas (syngas). Syngas is then chemically converted (using the well-known set of FT reactions) into a liquid biofuel called synthetic paraffinic kerosene (SPK). SPK differs from conventional jet fuel in that it does not contain aromatics or sulfur compounds that are essential to the fuel performance, so it needs to be blended with other fuel types.[6]

a. Power to Liquid (PtL): Power to liquid, a variation of the Gas/FT pathway, uses water, captured CO2, and renewable energy to produce liquid fuel. Renewable energy is used to make hydrogen from water via electrolysis, and an FT reaction is used to synthesize the hydrogen and CO2 into fuel.[7]

2. Gas/FT plus aromatics: This pathway is like the first, but the fuel is processed further to produce a hydrocarbon blend containing aromatic compounds. The resulting fuel is known as SPK/A. Unlike SPK produced in the first pathway, SPK/A has a similar composition to that of conventional jet fuel.[8]

3. Hydroprocessed Esters and Fatty Acids (HEFA): HEFA-based fuel is made from waste oils and fats that are treated with hydrogen to produce SPK.[9]

4. Hydrocarbon-HEFA (HC-HEFA): SAF can also be produced from a species of microalgae in a similar process as the HEFA pathway. It is currently limited to 10 percent blending.[10]

5. Alcohol-to-jet (AtJ): In the AtJ pathway, agricultural waste is converted to alcohol and then to jet fuels by dehydration and oligomerization, a chemical process that links molecules together to form a liquid hydrocarbon fuel. Currently, only isobutanol and ethanol are approved feedstocks for AtJ; however, it is also possible to produce jet fuel from methanol.[11]

6. Catalytic Hydrothermolysis (CHJ): CHJ uses a catalytic hydrothermal reactor to convert clean free fatty acid (FFA), a product of the processing of waste or energy oils, into hydrocarbons. The hydrocarbons are then treated with hydrogen to produce liquid fuel with a similar composition to fossil-based jet fuel.[12]

7. Synthesized Iso-Paraffins (SIP): SIP is a biological process in which yeast is used to ferment sugar into liquid fuel. It is currently limited to 10 percent blending.[13]

Comparison of Feedstocks and Production Pathways

The costs, emissions reduction potential, maturity, and feedstock availability vary greatly across different types of SAF. The feedstock options and emissions reduction potential for the approved pathways are summarized in table 2.

Table 2: Summary of SAF pathways

Pathway

Feedstock

Cost vs. Historical Average for Fossil Fuel

Emissions Reduction Potential

2020

2050 Projection

Gas/FT and Gas/FT plus aromatics

Municipal solid waste, agricultural and forest waste, and lignocellulosic crops

3–4.5x

2–3.5x

85–95%

PtL

Captured CO2 and hydrogen

3–9x

1–2.5x

Up to 99%[14]

HEFA

Plant and animal fats, oils, and greases

2–3x

2x

33–84%

HC-HEFA

Oils from algae

No data

No data

No data

AtJ

Agricultural and forest waste, lignocellulosic crops, and Industrial gasses

3–4.5x

2–3.5x

26–67%

CHJ

Plant and animal fats, oils, and greases

No data

No data

No data

SIP

Sugar crops

No data

No data

63–64%

The current and projected costs of SAF depend on the production pathway. HEFA is currently the cheapest pathway, yielding a product that costs about 2 to 3 times as much as conventional jet fuel. However, since it is already being produced at scale, only minor cost reductions are expected in the coming decades. Other pathways currently cost about 3 to 4.5 times as much as conventional fuel, but they should catch up to HEFA by 2050. In fact, PtL, which currently has the highest production cost of all the SAF pathways, may well be the cheapest option by then (if the costs of hydrogen and low-carbon electricity drop rapidly).[15]

The quantity of fuel that can be produced using each pathway depends mainly on the feedstock. HEFA, which is primarily produced using fats, oils, and greases (FOGs) that would otherwise go to waste, faces the greatest constraint. These wastes are limited, and other sectors such as heavy-duty transportation compete with aviation for them. Figure 1 shows that only about 800 million gallons (about 4 percent of the domestic commercial jet fuel market) of SAF can be produced in the United States per year from FOGs.[16]

The feedstocks for other biofuel pathways such as gas/FT and AtJ are less constrained. MSW, agricultural and forestry residue, and industrial gases could be used to produce as much as 10.9 billion gallons of SAF per year, equivalent to about 52 percent of the U.S. aviation fuel market. PtL offers an even more robust solution to feedstock constraints, since the supply of low-carbon electricity and captured CO2 could far exceed SAF demand.[17]

Figure 1: U.S. SAF production potential[18]

image

The emissions reductions that could be achieved with SAF are also dependent on which feedstock is used. HEFA has the greatest range of emissions reduction potential; fuel produced from FOGs can reduce emissions by as much as 84 percent compared with conventional jet fuel; while palm oil or soybean oil-based fuel only reduces emissions by 33 to 55 percent. SAF produced using the gas/FT pathway provides 85 to 95 percent greenhouse gas (GHG) savings.[19] A full life cycle assessment has not yet been conducted for PtL fuels, but some initial estimates suggest they could reduce emissions by up to 99 percent.[20]

AtJ fuels generally have higher life cycle emissions than do the other SAF pathways, with emissions reductions falling somewhere between 26 and 67 percent. The SIP pathway provides about 63 percent GHG savings; however, the main feedstocks for this pathway are edible crops such as sugar cane, which could interfere with local food security and result in additional indirect emissions.[21]

Contrails from the combustion of jet fuel are another way aviation impacts the climate. At the low temperatures found at airplane cruising altitudes, water vapor interacts with soot particles from jet engine exhaust to form trails of condensation. According to NASA modeling, SAF can reduce contrail formation by 50 to 70 percent.[22]

Global Progress

Aviation is a global industry, and international cooperation will be needed to achieve net zero. The International Civil Aviation Organization (ICAO) took a first step in this direction in 2016, introducing a global system that seeks to stabilize net CO2 emissions from the industry. Currently participating in this system, which offsets emissions from international flights, are 107 countries.[23]

SAF qualifies as an offset under the ICAO system. While SAF currently accounts for only about 0.05 percent of global jet fuel consumption, this share should grow.[24] In 2021 alone, buyers announced 20 new offtake agreements, bringing the global total to 53.[25] These agreements represent more than 5.5 billion gallons of sustainable fuel over their lifetime, more than 2,000 times the amount produced in 2021 (roughly 26 million gallons).[26]

Almost all the demand for SAF is currently met through the HEFA production pathway. The Finnish biofuel company Neste is set to become the largest global producer of HEFA-based SAF by 2023 with the expansion of its refineries in Rotterdam and Singapore. Once completed, this expansion will increase Neste’s annual production capacity from 34 million gallons (0.03 percent of the global commercial jet fuel market) to 515 million gallons (0.5 percent of the global market).[27]

RD&D investment has also increased for other pathways, particularly PtL. In 2021, Airbus announced that it is partnering with SAF+ Consortium to produce PtL using green hydrogen at commercial scale in Canada. The group’s pilot plant began production in 2021, and a full-scale demonstration project is planned for 2025.[28] The Dutch company SkyNRG plans to complete a PtL facility in Amsterdam by 2027 as well.[29]

Progress in the United States

In 2021, the White House launched the Sustainable Aviation Fuel Grand Challenge, a government-wide commitment to accelerating the production of SAF to 3 billion gallons per year by 2030 and meeting 100 percent of demand by 2050. The Grand Challenge was formalized in a Memorandum of Understanding (MOU) between the Department of Energy (DOE), Department of Transportation (DOT), and Department of Agriculture (USDA) and is supported by about $4.3 billion in new and existing funding.[30]

As part of the Grand Challenge, the Bioenergy Technologies Office (BETO) of DOE has awarded $64.7 million in funding to support biofuel RD&D to reduce transportation emissions. The awards include $3 million to Alder Energy for developing advanced pyrolysis technology to convert biomass to SAF and $2.8 million to the National Renewable Energy Laboratory for lowering the cost and emissions from producing fermentable sugar from corn stover.[31]

The Biden administration’s effort to advance SAF has been backed by strong industry support; every major U.S. airline has already made commitments to purchase SAF. United Airlines is leading the way, with offtake agreements totaling about 2.3 percent of global jet fuel demand.[32] The airline announced the largest purchase agreement to date in 2021, for 1.5 billion gallons (or 1.4 percent of the global market) from DC-based Alder Fuels.[33] United also became the first airline to successfully operate a fully SAF-powered flight with passengers onboard, establishing the feasibility of going beyond the current 50 percent blending limit.[34]

American Airlines has agreed to purchase 131 million gallons of SAF, and Delta has 260 million gallons of SAF under offtake agreements, equivalent to 0.1 percent and 0.2 percent of global jet fuel demand, respectively. In addition to offtake agreements, American Airlines has invested $100 million in Breakthrough Energy’s Catalyst program, an initiative designed to facilitate public-private partnerships to advance sustainable aviation.[35]

Key Policy Issues

One of the biggest barriers to achieving the Biden administration’s ambitious goals for SAF is cost. SAF today carries a hefty “green premium”—up to nine times the price of conventional jet fuel. Significant support for innovation will be needed to reduce this differential. An estimated 35 billion gallons of alternative fuel will be needed to meet 100 percent of the demand for jet fuel in 2050, an unsustainable level at today’s cost.[36]

The Inflation Reduction Act of 2022 took a first step by including a $1.25 to $1.74 per gallon production tax credit for SAF.[37] These incentives are anticipated to expand capacity, reduce cost, and increase availability of U.S.-made SAF. SAF produced using captured carbon may also be able to benefit from the 45Q tax credits for carbon capture, utilization, and storage projects. However, tax credits provide a subsidy that does not necessarily reduce production costs. The policy’s aim is to drive cost reductions indirectly through learning by doing as production scales. Other policies that complement tax credits, such as public RD&D funding and regulation, are likely to be necessary to achieve this outcome.[38] SAF tax credits have also drawn criticism from fuel retailers who worry that they will divert feedstock from renewable diesel production.[39]

Federal RD&D investments are more important at this stage than tax credits aimed at cost reduction because they expand the scale of production. Many federal departments and programs are involved in the effort. BETO plays a significant role, funding research and development efforts aimed at both creating new pathways for producing SAF and improving existing pathways. USDA is responsible for continuing investments and building expertise in sustainable biomass production systems. It is also responsible for decarbonizing supply chains and investing in biomanufacturing capability.[40]

The Federal Aviation Administration (FAA) is essential for certifying new SAF production pathways. Under the Continuous Lower Energy, Emissions, and Noise (CLEEN) program, the FAA can act as a cost-sharing partner with industry, enabling the private sector to test and evaluate new sustainable fuels. The Aviation Sustainability Center (ASCENT), a consortium of research institutions, industry, and federal agencies, assesses the impact of new SAF pathways on emissions and performance. The work of these two programs has enabled the certification of the seven existing SAF pathways.[41]

Even with all this policy support, it is unlikely SAF will become cost competitive with regular jet fuel before 2050. Getting airlines to adopt SAF will therefore be a challenge and require a permanent suite of policies to ensure global adoption. Fuel costs make up a large share of airline expenses, so opting to use SAF will result in higher ticket prices and reduce airline travel, especially for lower-income customers.

Looking forward

SAF will almost certainly play a role in decarbonizing the aviation sector. Meeting the ambitious targets set by the Biden administration and other governments will require significant RD&D investment by the public sector worldwide, backed by complementary policies as well as sustained industry leadership and international cooperation. Given the feedstock constraints and technological uncertainty associated with SAF, a wide range of pathways must be explored on a commercial scale.

Acknowledgments

The author would like to thank David Hart and Rob Atkinson for their help on this report.

About the Author

Hannah Boyles is a research assistant with ITIF’s Center for Clean Energy Innovation. Previously, Boyles was a research assistant at the Weldon Cooper Center and the ROMAC Lab in Charlottesville, Virginia, and has interned with the American Energy Society. Boyles holds a bachelor of science degree in aerospace engineering from the University of Virginia.

About ITIF

The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized by its peers in the think tank community as the global center of excellence for science and technology policy, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress. For more information, visit us at itif.org.

Endnotes

[1].     Brandon Graver, Kevin Zhang, and Dan Rutherford, “CO2 Emissions from commercial aviation, 2018,” working paper, International Council on Clean Transportation (ICCT), September 2019, https://theicct.org/sites/default/files/publications/ICCT_CO2-commercl-aviation-2018_20190918.pdf.

[2].     “Making Net-Zero Aviation Possible,” Mission Possible Partnership, July 2022, https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/decarbonizing-the-aviation-sector-making-net-zero-aviation-possible.

[3].     “Net zero 2050: sustainable aviation fuels,” International Air Transport Association, July 2022, https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet---alternative-fuels/.

[4].     “WAYPOINT 2050: Balancing growth in connectivity with a comprehensive global air transport response to the climate emergency: a vision of net-zero aviation by mid-century,” Air Transport Action Group, September 2020, 54, https://aviationbenefits.org/media/167417/w2050_v2021_27sept_full.pdf.

[5].     “Fuel Qualifications,” Commercial Aviation Alternative Fuels Initiative, accessed August 10, 2022, https://www.caafi.org/focus_areas/fuel_qualification.html.

[6].     “Sustainable Aviation Fuel: Technical Certification,” International Air Transport Association, July 2022, https://www.iata.org/contentassets/d13875e9ed784f75bac90f000760e998/saf-technical-certifications.pdf.

[7].     MPP, Making Net-Zero Aviation Possible, 39.

[8].     IATA, “Sustainable Aviation Fuel: Technical Certification”

[9].     Ibid.

[10].   Ibid.

[11].   Ibid.

[12].   Ibid.

[13].   Ibid.

[14].   Ibid.; Nikita Pavlenko and Stephanie Searle, “Assessing the sustainability implications of alternative aviation fuels,” working paper, the International Council on Clean Transportation, 2021, https://theicct.org/sites/default/files/publications/Alt-aviation-fuel-sustainability-mar2021.pdf; Adam Christensen and Chelsea Petrenko, “CO2-Based Synthetic Fuel: Assessment of Potential European Capacity and Environmental Performance” (ICCT, 2017), https://theicct.org/publication/co2-based-synthetic-fuel-assessment-of-potential-european-capacity-and-environmental-performance/; MPP, Making Net-Zero Aviation Possible, 33.

[15].   MPP, Making Net-Zero Aviation Possible, 33.

[16].   Johnathan Holladay, Zia Abdullah, and Joshua Heyne, “Sustainable Aviation Fuel: Review of Technical Pathways” (DOE Office of Energy Efficiency and Renewable Energy, 2020), https://www.energy.gov/sites/prod/files/2020/09/f78/beto-sust-aviation-fuel-sep-2020.pdf.

[17].   Mission Possible Partnership, Making Net-Zero Aviation Possible, 39.

[18].   “U.S. Jet Fuel Production Potential from Wastes” (working document, CAAFI, 2018), https://www.caafi.org/focus_areas/docs/US_WasteFeedstockPotential.pdf.

[19].   ICCT, “Sustainability Implications of Alternative Aviation Fuels, 5.

[20].   Christensen and Petrenko, “CO2-Based Synthetic Fuel,” 27.

[21].   ICCT, “Sustainability Implications of Alternative Aviation Fuels,” 6.

[22].   Christiane Voigt et al., “Cleaner burning aviation fuels can reduce contrail cloudiness,” Nature Communications Earth Enviro 2, 114 (June 2021), https://doi.org/10.1038/s43247-021-00174-y.

[23].   “CORSIA Fact sheet” (International Air Transport Association), https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet---corsia/.

[24].   “Sustainable aviation fuels – ReFuelEU Aviation,” European Commission, accessed August 16, 2022, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12303-Sustainable-aviation-fuels-ReFuelEU-Aviation_en.

[25].   International Civil Aviation Organization (ICAO), SAF Offtake Agreements, accessed August 10, 2022, https://www.icao.int/environmental-protection/GFAAF/Pages/Offtake-Agreements.aspx.

[26].   Jeff Overton, “Corporations, Nonprofits, and Airlines Cooperate to Expand Sustainable Aviation Fuels Use and Capacity” (Environmental and Energy Study Institute, February 2022), https://www.eesi.org/articles/view/corporations-nonprofits-and-airlines-cooperate-to-expand-sustainable-aviation-fuels-use-and-capacity.

[27].   Linnea Ahlgren, ‘Which Producers Are Leading the Sustainable Aviation Fuel Race,” Simple Flying, June 17, 2022, https://simpleflying.com/producers-leading-sustainable-aviation-fuel/.

[28].   SAF+ Consortium, “The first production of SAF sustainable aviation fuel developed in North America,” news release, September 14, 2021, https://safplusconsortium.com/blog/the-first-production-of-saf-sustainable-aviation-fuel-developed-in-canada/.

[29].   Ahlgren, “sustainable aviation fuel race.”

[30].   The White House, “FACT SHEET: Biden Administration Advances the Future of Sustainable Fuels in American Aviation,” news release, September 9, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/09/fact-sheet-biden-administration-advances-the-future-of-sustainable-fuels-in-american-aviation/.

[31].   Department of Energy (DOE), “U.S. Department of Energy announces More Than $64 Million for Biofuels Research to Reduce Transportation Emissions”, news release, September 9, 2021, https://www.energy.gov/eere/bioenergy/articles/us-department-energy-announces-more-64-million-biofuels-research-reduce.

[32].   Overton, “collaborate to expand sustainable fuel use.”

[33].   Green Car Congress, “United, Honeywell invest in alder Fuels. 1.5-billion-gallon SAF offtake agreement,” news release, September 10, 2021, https://www.greencarcongress.com/2021/09/20210910-alder.html.

[34].   Honeywell, “Sky’s The Limit: First Passenger Flight Powered by 100% Sustainable Aviation Fuel Marks New Milestone,” news release, December 1, 2021, https://pmt.honeywell.com/us/en/about-pmt/newsroom/featured-stories/uop/first-passenger-powered-by-100-percent-saf-marks-new-milestone.

[35].   Overton, “Corporations, Nonprofits, and Airlines Cooperate to Expand Sustainable Aviation Fuels Use and Capacity.”

[36].   The White House, Sustainable aviation fuels fact sheet.

[37].   Inflation Reduction Act of 2022, H.R. 5376, 117th Cong. (2022).

[38].   Elizabeth Noll and David Hart, “Less Certain Than Death: Using Tax Incentives to Drive Clean Energy Innovation” (ITIF, December 2019), https://www2.itif.org/2019-tax-incentives-clean-energy.pdf.

[39].   Laura Sanicola, “U.S. fuel retailers rail against green aviation fuel tax credit” Reuters, August 8, 2022, https://www.reuters.com/business/sustainable-business/us-fuel-retailers-rail-against-green-aviation-fuel-tax-credit-2022-08-08/.

[40].   “Memorandum of Understanding Sustainable Aviation Fuel Grand Challenge” (DOE, September 2021), https://www.energy.gov/sites/default/files/2021-09/S1-Signed-SAF-MOU-9-08-21_0.pdf.

[41].   Alexander Laska, “Federal Funding: A Flight Path to Sustainable Aviation Fuels”, Third Way, May 2022, https://www.thirdway.org/memo/federal-funding-a-flight-path-to-sustainable-aviation-fuels.

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