High Level SAF conference: Sustainable aviation fuel-stuck on the carousel?

Insights and commentary on the European High-Level SAF conference,

8 February 2021

 

The solution to net-zero carbon aviation exists

Sustainable aviation fuels (SAF) exist as a product and solution to climate change that airlines can use today to offset their carbon emissions. Indeed, KLM recently used sustainably produced synthetic kerosene successfully on a commercial passenger flight. So why isn’t SAF being used as a standard product by the aviation industry?

 

The problems: There is a lack of agreement on how to adopt the use of SAF. Adding to this, some airlines are concerned about the impact on their profitability through the use of SAF, which is more expensive than kerosene.

The political will to address net carbon aviation is real. U.S.-based National Air Transportation Association is lobbying for sustainable aviation fuel of up to $2 a gallon

In December 2019, the European Green Deal focused on the importance of supporting the development and use of alternative fuels and is formulating proposals to be published in the coming weeks. Such proposals will be critical in helping the aviation industry reach its goal of net-zero emissions by 2050. If adopted and implemented, such proposals would lead to an EU-wide mandate for a minimum amount of green aviation fuel to use in each flight throughout the European Union. Also included in these proposals are details of the incentives required to develop fuel refineries and production facilities. The EU is likely to face opposition from international airlines flying in and out of Europe. In 2012, the EU’s emissions trading scheme was outlawed by the US Congress, thereby preventing US carriers participation in the scheme. With the newly elected president Biden’s commitment to the Paris agreement and returning the US to a climate leadership position, we can expect to see a greater commitment to SAF by the US in the coming months. The U.S.-based National Air Transportation Association, which represents more than 3,000 companies across the aviation industry, is lobbying for an incentive for sustainable aviation fuel of up to $2 a gallon.

Seven of the world’s largest aerospace companies are backing the transition to SAF

Aviation industry leaders are backing the transition to SAF. Seven of the world’s largest aerospace companies have warned that the aviation industry’s commitment to reach net-zero carbon emissions by 2050 is at risk. They have highlighted that the lack of agreement between policy and industry stakeholders on how to encourage the use of SAF is putting the entire initiative at risk of failure.

The Financial Times recently reported that in a letter to the International Civil Aviation Organization, the Chief Technology Officers of Boeing, Airbus, Rolls-Royce, General Electric, Safran, Dassault Aviation, and Raytheon have urged greater efforts to create “conditions under which sustainable aviation fuels (SAF) can be widely deployed” They warn that without broad agreement on tools and policies to encourage the use of green fuels, energy companies would not put up the “trillions of dollars of capital investment between now and 2050” required to meet the needs of the aviation industry.

In the recently held European High-Level SAF conference, SAF was highlighted as having a significant role in reducing the carbon footprint of the aviation sector in the coming years. Industry thought leaders and senior European government ministers stressed the importance of utilising the post-CoViD economic recovery of the aviation sector, as an opportunity to drive the reduction of emissions in the aviation industry. There is a significant cost in transitioning fuel production capacity from fossil fuels to the manufacturer of SAF. However, in this transition, there is significant upside for job creation and investment in European economies. A recent study produced by Sustainable Aviation (UK), argues that a green fuels industry could deliver about £3bn in value to the UK economy and 20,200 jobs. Warren East, the CEO of aviation engine manufacturer Rolls-Royce, has stated that SAF production volumes would have to be increased by a factor of 1,000. “To be compatible with a net-zero carbon future, we will still need 500m tonnes of sustainable fuels to power the aviation industry of 2050,”.

Aviation as we know it can never truly be emissions-free, however, with SAF it can be carbon neutral

It was clear from February’s European High-Level SAF conference that while everyone is in principle committed to a cleaner future there is a real tension between stakeholders. In one camp there are the SAF producers who encourage airlines to use more of their products and in doing so will reduce the price of their product and enable them to invest more in increasing their production capacity. In another camp, the airlines are unwilling to commit to using SAF as it is a disincentive and increases their operating costs. Rather they are waiting for policymakers to issue directives. ln the last camp, the European Union’s policymakers can be found, working to reach consensus amongst their nation-states to define what the EU will commit to.

In reality, until new alternative energy storage technologies such as hydrogen or battery technologies become real and validated, aviation as we know it can never truly be emissions-free, however, with SAF it can be carbon neutral.

 

Dermot O’Mahony, Arvensis Partners