Aviation industry calls for more funding for synthetic green fuels

Source: By Joanna Plucinska, Reuters • Posted: Thursday, June 13, 2024

BERLIN, June 11 (Reuters) – Europe will need to invest more into synthetic aviation fuels if it hopes to meet its net zero targets and decarbonise aviation by 2050 as it can’t only rely on biofuel, according to industry leaders, with many asking governments to provide more help.

Biofuel-based sustainable aviation fuel (SAF), made from materials like used cooking oil or wood chips, could reduce aviation emissions by up to 80%, according to government and industry officials, and is seen as the key green solution for the sector.

But there is a shortage of feedstocks to produce enough of the fuel from organic materials. Investment into pricier synthetic fuels made out of hydrogen or carbon capture, known as e-SAFs, is needed to ensure Europe can meet its green goals.

Only a handful of refineries produce e-SAF, which is considered to be even cleaner than biofuel-based SAF, and very few airlines have committed to purchasing it.

“We definitely need e-SAF to bring the amount on the market which is required for the blending mandates first and then later on for 2050 to fly each and every aircraft with SAF,” Uwe Gaudig told Reuters, who works on SAF projects for engineering firm Griesemann group in Germany.
SAF makes up only 0.2% of global jet fuel use with most of it made using organic feedstock-based biofuels. One of the reasons for the slow uptake is price – biofuel-based SAF costs between three to five times more than traditional jet fuel.
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Synthetic SAF is substantially more expensive than that, experts say, with estimates showing it can be up to ten times pricier than traditional fuel.

INVESTMENT SECURITY

The European Union is offering some subsidies for e-SAF under new rules to boost the use of green fuel across the bloc, but industry leaders say governments need to put more money into infrastructure and production.

“Price is one thing. The other thing is that we need the stability and regulations from the government,” Gaudig said on the sidelines of the Berlin Airshow last week.

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Without clear rules, such as price security mechanisms and clear guarantees, the sector will struggle to flourish in Europe, officials working at SAF producers said.

Thorsten Herdan, the head of EMEA for SAF maker HIF, said the industry needed funding to improve the quality of the fuel but investors were sometimes put off by changes in legislation.

Airbus’ head of sustainability, Julie Kitcher, said the expansion of renewable electricity and electrolisers across sector would also make it easier and cheaper to make the fuel.

But Marte van der Graaf, an aviation policy officer at advocacy group Transport and Environment, said only a handful of e-SAF projects in Europe would secure funding by 2028.

“The problem is that there’s no final investment. So you have this amazing potential, if they just never reach FID (a final investment decision), then they’ll just never exist,” she told Reuters.

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Reporting by Joanna Plucinska Editing by Mark Potter

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