Today: Sustainable aviation fuel struggles to scale despite increased demand amid the energy crunch; state AGs sue Interior Department over TotalEnergies wind payment; AI’s growth in India is hitting water supplies.

Welcome back: The war in Iran has left airlines scrambling to find their next barrel of oil, paying through the nose to ensure they keep flying. Alternatives made from used cooking oil, cover crops and even captured carbon dioxide would have eased pressures on the beleaguered industry—if only there had been enough to go round.

For years, airlines have pointed to sustainable aviation fuel, otherwise known as SAF, as the future of lower-carbon flying. But the industry has struggled to take off, WSJ Pro Sustainable Business reports.

Last year, SAF made up only 0.6% of fuel used for flights, according to the International Air Transport Association. Four years ago, the United Nations’ International Civil Aviation Organization expected SAF production volumes to reach roughly five million tons in 2026. But today they stand at just over two million tons, while total jet fuel consumption is close to 300 million tons.

One of the main reasons SAF remains in scant supply is it’s expensive to produce and to buy. Manufacturing largely focuses on converting used cooking oil, animal fats and forestry waste into jet fuel. Shortly before the war, a ton of SAF cost about $1,500 more to buy than a ton of traditional jet fuel, according to data from commodities pricing agency Argus Media.

• Europe’s Militaries Test Green Fuels as Iran War Exposes Supply-Chain Vulnerabilities (WSJ)

New York’s attorney general is leading a lawsuit against the Trump administration to challenge its deal that put an end to a French energy company’s offshore wind projects.

As part of an agreement with the Trump administration, TotalEnergies said in March it would stop developing offshore wind projects in the U.S. and will instead invest in oil and gas production in the country. The government said the company would be paid $928 million—the value of its offshore wind leases—which would then be reinvested into oil and gas projects.

The lawsuit was filed on Tuesday in the U.S. District Court for the District of Columbia by attorneys general from New York, Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont, WSJ Pro Sustainable Business’s Clara Hudson reports.

“We are fighting back to stop this illegal agreement that threatens to erase over a thousand union jobs and cheat millions of New Yorkers out of clean, affordable energy,” New York Attorney General Letitia James said.

When Google arrived last year in the sleepy coastal Indian city of Visakhapatnam, the government rolled out the welcome mat, offering billions of dollars’ worth of incentives for the U.S. company to build data centers for artificial intelligence.

Some residents had never heard of AI, much less Gemini and ChatGPT.

What they do know is that Visakhapatnam doesn’t have much water, which is typically needed in large volumes to cool data-center servers. Some fear their community will be hollowed out entirely, with many residents already pushed from land they have farmed for decades for the $15 billion project, the Journal’s Rory Jones and Krishna Pokharel report.

Data centers have faced bitter opposition in the U.S. and other rich countries. Now, similar debates are spreading across the developing world, as Google, Amazon, Microsoft and other companies rush to capitalize on growing demand for AI in places with newly emerging middle classes.

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• America’s truckers are slowing down to save on gas, as the soaring price of fuel shows no sign of let up. (WSJ)
   
• A company is testing a new desalination technology in deep water to make drinking water at lower cost than coastal desalination. (LA Times)
   
• Judge temporarily blocks dismantling of a globally significant weather and climate research center based in Boulder. (Bloomberg)
   
• Last year was the most economically damaging wildfire year on record, according to a new analysis. (NYT)
   
• A new petition is calling on the EU to let polluted rivers or deforested woodlands “take” their polluters to court. (Politico)
   
• Novel forms of CO2 removal must expand at ‘highly ambitious rates’ if world is to limit global heating to 1.5C, says a new study. (Guardian)

WSJ Pro Sustainable Business gives you an inside look at how companies are tackling sustainability. Send comments to bureau chief Perry Cleveland-Peck at perry.cleveland-peck@wsj.com and reporters Clara Hudson at clara.hudson@wsj.com and Yusuf Khan at yusuf.khan@wsj.com. Follow us on LinkedIn at wsjperry, clara-hudson and yusuf_khan.