CHICAGO, March 22 (Reuters) - Costs are the main

obstacle to increasing the use of sustainable aviation fuel

(SAF), Exxon Mobil ( XOM ) Senior Vice President Jack Williams

said on Friday.

SAF accounts for just 0.2% of the jet fuel market but

policymakers including U.S. President Joe Biden see its adoption

as a way to meet goals on lowering carbon emissions.

But SAF, a biofuel made from plant or animal materials

including used cooking oil or agricultural waste, is up to five

times more expensive than regular fuel.

"There's one big negative and that's the cost," Williams

said at a conference near Chicago. "As we think about how we

want to grow SAF ... we have got to focus on how do we minimize

the costs?"

Williams said demand for jet fuel could increase from 7

million barrels a day now to 12 million barrels a day in 2050.

Seven million barrels a day is the same as the International

Energy Agency's estimate for all jet fuel demand. By comparison,

current production of SAF is only 15.8 million gallons per year,

as per U.S. government data.

Williams described the Biden administration's Inflation

Reduction Act as the catalyzing action for biofuel production as

well as carbon capture and storage and low carbon hydrogen.

Biden launched a challenge in 2021 to supply at least 3

billion gallons of SAF annually by 2030.

Major airlines, including Delta Air Lines ( DAL ) and

Southwest Airlines ( LUV ), have said they want to replace 10%

of jet fuel with SAF by 2030.