By now, most regular fliers will have heard about sustainable aviation fuel (SAF). All parts of the aviation industry – airlines, aircraft manufacturers and airports – have emphasized its importance. United was the first airline globally to incorporate SAF in regular operations on a continuous basis, using a blended fuel to help sustainably power every flight departing its Los Angeles hub since 2016. Boeing has announced a goal of making all new commercial aircraft deliveries “capable and certified to fly on 100 percent sustainable aviation fuels by 2030.” And the 14 member airlines of the Oneworld Alliance have pledged their support for the ambition statement of World Economic Forum Clean Skies for Tomorrow Coalition to commit to a target of 10 percent use of sustainable aviation fuel by 2030. But what exactly is SAF, and what are the challenges in realizing these aims?
What is SAF?
SAF is best understood as a collective term for many different types of fuel. It is the feedstock – what goes into the mix to create the SAF – as well as the process by which it is made that determines just how “sustainable” the fuel is.
Most existing forms of SAF might also be termed biofuels, which, as the name suggests, means a fuel produced from biological resources (plant or animal material) but which also includes used cooking oil, and municipal and household waste. It is also possible to create synthetic fuels from hydrogen and carbon dioxide – these are often referred to as e-kerosene, power-to-liquid and e-fuels. To make matters more complicated, some NGOs, such as clean transport campaign group Transport and Environment, use the term SAF to refer to “sustainable advanced fuels.” These are the same as sustainable aviation fuels but don’t carry the implication that the fuels have to be used for aviation.
How Sustainable Is It?
It depends on how it is made. To use the term “sustainable’’ validly, the fuel must meet criteria such as lifecycle carbon emissions reduction, limited freshwater requirements, no competition with needed food production (such as first-generation biofuels) and no deforestation count.
There are some processes that seem to have obvious benefits – using household waste, for instance, or used cooking oil. But even then, it is important to certify that the oil is, in fact, waste. A recent study showed that more than half of the waste cooking oil for SAF in the European Union came from abroad. China supplies more than a third (34 percent) while almost a fifth (19 percent) of waste oil comes from the major palm oil producers Malaysia and Indonesia combined. The increasing reliance on imports means that the price of used cooking oil can sometimes rise above virgin oils, such as palm oil. This could potentially lead to virgin oils being reclassified as waste to meet demand, so driving deforestation.
Finnish-based company Neste is currently the world’s largest supplier of SAF but it includes in its feedstock palm fatty acid distillate (PFAD). Transport and Environment says: “PFAD is a byproduct of the palm oil industry that is used in other industries. Thus, its promotion for biofuel use, beyond directly creating an incentive for more palm oil cultivation, leaves a gap in these other industries as they would need other feedstocks – such as virgin palm oil.”
Neste defends its use of PFAD, saying that it is just one of several feedstocks it uses: “Proportions of individual raw materials in Neste’s refining vary from year to year, depending on their availability, price and specific market requirements, for example.”
It argues that this provides flexibility and allows it to “respond to the needs of different markets and customers. We are constantly looking into diversifying our portfolio with new raw materials. Replacing fossil oil with renewable and recycled raw materials helps to reduce crude oil dependency [and] greenhouse gas emissions, and combat climate change.”
Other companies, such as Velocys, use municipal and wood waste. Lanzajet, launched by biotech company Lanzatech, uses ethanol, which, depending on the market, might come from corn (in the US), sugarcane (in Brazil) and wood waste (in Europe), but also steel mill waste gases from its planned plant in South Wales. The proposed facility will yield about 26 million gallons per annum.
Lessons from the Road
While focusing on aviation, it is important, and instructive, to remember that it is part of a larger strategy for overall transport. The EU regulated the use of SAF in road transport as long ago as 2009, when the Renewable Energy Directive (RED) set a target of 10 percent of renewable fuels to be used in land transport by 2020. Over the past decade, the industry has learned lessons from RED, and NGOs such as Transport and Environment say that because of poor sustainability criteria and a lack of consideration of the full life-cycle emissions of the fuels, the target has driven the use of unsustainable crop-based biofuels, such as palm and rapeseed oil, which has caused deforestation, loss of habitat and increased greenhouse gas emissions. The revised REDII (adopted in 2018) took some steps to reduce the use of these biofuels and put a strong emphasis on advanced fuels – such as biofuels based on true waste and residues without negative direct or indirect impacts – but still allows for crop biofuels to count towards the RED targets.
Can Current Aircraft Use SAF?
Yes. The chemical and physical characteristics of SAF are almost identical to those of conventional jet fuel. This means they can be safely mixed with the latter to varying degrees, can use the same supply infrastructure and do not require any adaptation of either aircraft or engines. It means that SAF is often referred to as a “drop-in fuel” – that is, fuel that can be automatically incorporated into existing airport fueling systems.
All fuels (and SAF) must be certified to be used in commercial flights, and there are several bio-based aviation fuel production pathways that have been certified, with others in the approval process.
How Much Does It Cost?
Here lies the problem. As Henrik Wareborn, chief executive of Velocys, says, “The spot market for SAF is currently at $2,500 per ton. That’s what airlines pay for the small volumes available today. The similar price for fossil jet fuel is $500 per ton, meaning SAF is five or six times the price. It is eye-wateringly expensive and hard to procure.”
Production must rise and prices must fall before SAF will find widespread use. According to IATA, “Insufficient supply and high prices have limited airline uptake to 120 million liters (32 million gallons) in 2021 – a small fraction of the 350 billion liters (92 billion gallons) that airlines would consume in a normal year.”
There is no single solution to reducing the high cost of SAF in the long term. Producing it in volume will obviously make the price drop, but for that to happen, governments will have to play a role in carbon pricing, either through emissions trading systems or a carbon tax. This would mean that an airline would have to either pay for SAF, or pay a similar price for the carbon they will emit from their flights up to whatever the percentage mandate is. So if the mandate for SAF is 5 percent, they would have to pay a penalty equivalent to the carbon emitted for 5 percent of their flights. This would encourage them to purchase SAF, which would drive demand and so help to bring down the cost. Campaigners point out that all other transport fuels – apart from kerosene –are taxed, and so removing this exemption would raise revenue and help to close the gap, while also affecting some demand management (by raising the cost of flying and so reducing demand).
As you can imagine, airlines are not keen on this.
“Making jet fuel more expensive through taxation scores an ‘own goal’ on competitiveness that does little to accelerate the commercialization of SAF,” says IATA director general Willie Walsh.
IATA argues that taxes “siphon money from the industry that could support emissions-reducing investments in fleet renewal and clean technologies.” In other words, by reducing the potential profits of the airline industry, it leaves less money to invest in technologies such as SAF.
So What Are Airlines Planning?
Nearly every major airline has outlined plans for increasing its use of SAF. ANA, for instance, has reached an agreement with supplier Lanzatech for the future purchase of SAF and signed a memorandum of understanding with Neste “to create a medium- to long-term strategic alliance.” Since July 2021, the carrier has been
using Neste SAF on its flights departing from Tokyo’s Haneda and Narita airports.
JAL, meanwhile, along with other investors, acquired a stake in SAF-manufacturing company Fulcrum Bioenergy, which has a newly constructed plant starting production at the end of this year in Nevada, allowing the airline to refuel its flights departing from North America with SAF. In Japan, it is working with the Japanese government to encourage domestically produced SAF “with the aim of achieving the government’s objective of the widespread adoption of domestically produced SAF by 2030.”
In the US, carriers are taking various approaches to SAF, including investing in production facilities on the supply side and encouraging use on the demand side. Examples of the former are United investing in Fulcrum Bioenergy and partnering with some of its large corporate customers in its Eco-Skies Alliance to buy approximately 3.4 million gallons of SAF this year.
For its part, Delta Air Lines has a medium-term goal to replace 10 percent of its jet fuel with SAF by 2030 – it has an agreement with Neste and has agreed to buy 70 million gallons per year from producers Gevo and Northwest Advanced Bio-Fuels, beginning in 2024 and 2025, respectively. On the demand side, Delta’s SAF partnership agreements, launched in 2021, enable corporate customers to offset their business travel while building SAF demand. Organizations already on board include Nike, Deloitte, Takeda, BCD Travel and CWT. Similar agreements have been made by organizations such as American Express Global Business Travel and Shell Aviation.
Virgin Atlantic has had agreements with Lanzatech since 2011 to help “the scale-up of their process to convert industrial waste gases into various low carbon products,” says an airline spokesperson. It operated the first commercial flight using Lanzatech’s advanced waste based SAF in 2018.
Last year Lanzatech launched Lanzajet, which focuses on making jet fuel through a patented process that “can use any source of sustainable ethanol, including, but not limited to, ethanol made from non-edible agricultural residues such as wheat straw and recycled pollution.” British Airways is joining Lanzatech, Mitsui and Suncor Energy as an investor in the company.