Airlines seek clearance for liftoff on sustainable aviation fuels

Source: By Terry Slavin, Reuters • Posted: Monday, April 18, 2022

A passenger aircraft descends to land at Heathrow Airport in London

April 11 – Aviation is one of the fastest-growing sources of emissions, and the most intractable. In the run-up to COP26 in November last year, the airline industry pledged to get to net zero by 2050, but admitted that hydrogen and electric aircraft would not be operating in significant numbers until the 2040s. Therefore 65% of the emissions reductions will need to come from replacing the kerosene used today, 450 billion litres, with sustainable aviation fuel (SAF).

Given that use of SAF is just 100 million litres, that will involve dramatically scaling up the use of a fuel that is currently two to five times more expensive.

But a series of developments last year from policymakers, biofuel companies and corporates that have made ambitious emissions-reduction commitments have combined to bring SAF to the verge of lift-off.

First off: policy. In July 2021, the European Union proposed to force fuel suppliers to include SAF in aviation fuel supplied at EU airports, commencing in 2025 at 2% SAF, 5% from 2030, and scaling up to 63% in 2050. Britain, meanwhile, announced ahead of COP26 that it would target 10% SAF by 2030.

Airlines said mandates alone would not be enough to drive uptake: they need incentives to help bridge the high cost of SAF.

That missing piece of the puzzle came when in the United States Joe Biden’s administration announced plans for a blenders’ tax credit in the $1.2 trillion Infrastructure bill, which passed Congress in November 2021.

COP26 in Glasgow
U.S. climate envoy John Kerry talks with European Commission Vice President Frans Timmermans during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain November 13, 2021. REUTERS/Yves Herman – RC2UTQ9MFSGU

The administration also issued a sustainable aviation fuel challenge to the industry to replace at least 5% of conventional jet fuel demand with SAF by 2030. If realised, that would mean 3 billion gallons (11.36 billion litres) of SAF being produced in the United States by the end of the decade.

But the biggest push is arguably coming from the private sector. And it is not only from airlines and air freight companies like Deutsche Post DHL, which at COP26 in Glasgow last November agreed a new partnership with Finland’s renewable fuel company Neste enabling it to fly 200 airfreight flights a week on SAF from Britain’s East Midlands Airport.

Thousands of companies have now set net-zero commitments in line with science, and are realising that aviation emissions are a large chunk of their carbon footprint. These range from big consumer goods companies such as Amazon and Walmart, to consultancies and financial services companies like Bank of America, Deloitte and Boston Consulting Group, for whom staff air travel is their biggest emissions challenge.

At COP26, the U.S. State Department and the World Economic Forum (WEF) launched the First Movers Coalition, a platform for leading global companies to fast-track innovation in seven areas.

In aviation, participating companies have pledged by 2030 to replace 5% of their conventional jet fuel with advanced technologies that can reduce lifecycle emissions by 85% or more.

Brian Moynihan, CEO of Bank of America, said at the launch of the First Movers Coalition that cutting aviation’s footprint will increasingly be a competitiveness issue. “We aren’t a big user of electricity, but the issue is our clients. Trillions of dollars in commitments to net zero comes from our clients,” he said.

A Lufthansa CO2-neutral Boeing 777 cargo aircraft, operated with sustainable aviation fuel (SAF), is refueled at Frankfurt airport,
A Lufthansa CO2-neutral Boeing 777 cargo aircraft, operated with sustainable aviation fuel (SAF), is refueled at Frankfurt airport, Germany, November 27, 2020. REUTERS/Ralph Orlowski

Several members of the First Movers Coalition – including Boeing, Bank of America, Orsted, DPDHL, United and Delta airlines and Boston Consulting Group – are in another WEF initiative, the 60-member Clean Skies for Tomorrow Coalition, an alliance formed earlier in 2021 to power global aviation with 10% SAF by 2030.

In June 2021, the coalition launched a sustainable aviation fuel certificate framework, a “book and claim” system where companies seeking to offset their corporate flights can purchase certificates that will cover SAF’s price premium.

Microsoft, for example, has bought certificates from Alaska Airlines and SAF producer SkyNRG to cover employee travel between Seattle and three Californian airports. It is also purchasing certificates in another pilot project announced last September with Air BP and United Airlines to supply 26,500 litres of waste-based SAF at British airports.

Microsoft is one of the founding members of another partnership that came together last year, the Sustainable Aviation Buyers Alliance (SABA), a joint project by two leading environmental non-governmental organisations (NGOs) in the United States, the Rocky Mountain Institute and the Environmental Defense Fund.

Among other objectives, it plans to create a SAF certification scheme with robust environmental criteria, which SABA says will be key to overcoming concerns that SAF will lead to a surge in deforestation as land is cleared to grow bioenergy crops, threatening food security as well as biodiversity.

Indonesia, for one, is gearing up to produce aviation fuels from palm oil in commercial volumes. While the European Union has banned using palm oil in biodiesel and aviation fuels from 2030, it is not clear other jurisdictions will do the same.

In both the SkyNRG and Air BP pilots, the SAF supplied will be certified by multi-stakeholder organisation the Roundtable on Sustainable Biomaterials (RSB), whose criteria include having no adverse impacts on biodiversity or land use. RMI, a non-profit organisation working to accelerate the energy transition, and energy company EDF said there would also be robust requirements for traceability and third-party audits and verification.

A wooden house is pictured at a palm oil plantation as smoke covers trees due to the forest fires near Banjarmasin
A wooden house is pictured at a palm oil plantation as smoke covers trees due to the forest fires near Banjarmasin in South Kalimantan province, Indonesia, September 29, 2019. REUTERS/Willy Kurniawan

Scott Kirby, CEO of United Airlines, told a panel discussion at COP26 hosted by SABA that United would not fly on SAF derived from food crops. “The north star needs to be to do the right thing, not to find the cheapest way to get to this new metric.”

While SkyNRG and Neste are using agricultural waste and used cooking oil in their biofuels, LanzaJet, based in Illinois in the United States, is producing jet fuel from CO2 captured at a steel plant in China.

LanzaJet chair, Jennifer Holmgren, signed a deal with Scandinavian Airlines (SAS), Shell and Vattenfall at COP26 exploring the feasibility of producing SAF from fossil-free electricity and captured CO2 in Sweden, which could provide SAS with up to 25% of its global demand for sustainable aviation fuel.

In the United States, LanzaJet is building a plant in Georgia to convert ethanol into jet fuel, a first of its kind plant that is due to start operating in 2023, with a target of 40 million litre capacity. It has funding from the U.S. Department of Energy, and from investors Suncor, Mitsui, Japanese airline ANA, British Airways and Shell.

Last month, Microsoft announced it will invest $50 million from its Climate Innovation Fund in the Georgia facility, and use renewable diesel produced by the plant to power its data centres.

In an interview, Holmgren said the proposed blenders’ tax credit, along with measures in Biden’s infrastructure bill to incentivise green hydrogen, should allow her company to ramp up the production of synthetic biofuels using CO2 as a feedstock. She believes LanzaJet could supply a third of the 3 billion gallons of SAF the United States wants to produce by 2030.

“The U.S. government is very clearly thinking about the end game, and what we need to incentivise today to get where we want to be in 10 years’ time,” she said.

At the same time, corporates with science-based net-zero commitments are driving demand for biofuels that meet higher sustainability standards, such as the RSB certification, which favour advanced biofuel technologies such as LanzaJet’s.

“I think the 10% target by 2030 is achievable because so many of the (waste-based) technologies are past the demonstration stage,” Holmgren said. “I think we’re on a path to exponential growth.”

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.

Terry Slavin is editor-in-chief of Reuters Events Sustainable Business, and edits The Sustainable Business Review and The Ethical Corporation magazines @tslavinm