Aerospace & defenseMarch 22, 2021

Future Outlook: Sustainable Aviation Fuel

Between 2008, when Virgin Atlantic Airways flew the first biofuel demonstration flight,…
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Avatar Tony Velocci

Between 2008, when Virgin Atlantic Airways flew the first biofuel demonstration flight, and 2019, commercial air transportation as a whole did little else to advance the industry’s move toward reducing carbon emissions. Now, as more countries and their aviation industries commit to net-zero emissions by 2050, an unprecedented urgency to scale up the production and use of sustainable aviation fuel (SAF) is emerging.

But the industry faces a daunting challenge.

To put it into perspective, barely 0.01% of the 96 billion gal. of jet fuel consumed by the world’s airlines in 2019 was SAF, according to Commercial Aviation Alternative Fuels Initiative (CAAFI). Meanwhile, the industry is striving to reach a goal of 2% by 2025.

A recently released blueprint for [commercial] aviation’s future in line with the Paris Agreement on climate change—Waypoint 2050—outlines three scenarios for how the airline industry could meet its obligation of net-zero emissions within 30 years. In every scenario, SAF is critical, according to the Air Transport Action Group. Adding to the industry’s challenge is that the Paris Agreement signatories may adopt a preferred stricter goal, which would require airlines to make even deeper annual reductions in carbon emissions and provide for an additional 38 billion gal. of SAF production capacity.

The rapid scaling up of SAF is “perhaps the single largest opportunity to meet and go beyond the industry’s 2050 goal, according to Waypoint 2050, which recommends that governments prioritize aviation as a user of alternative fuel and the energy industry “demonstrate substantial commitment to sustainable aviation fuel production and scale-up.” It also recommends that airlines “make substantial and bold SAF offtake agreements at an early stage.”

Some regions and countries are responding faster than others to ensure their aviation industries are on pace to meet even the most

aggressive targets, with the UK and the European Union in the vanguard. A Destination 2050 decarbonization 2050 road map unveiled in February calls for the largest percentage of reductions (46%) to come from SAF. Among the necessary actions identified are an EU-wide blending mandate and the ability to use 100% SAF in aircraft, up from the current 50%. Norway introduced the first SAF blending mandate, which calls for just 0.5% initially but targets 30% SAF by 2030.

In the U.S., which recently rejoined the Paris Agreement, the Biden administration has taken several significant steps to promote the expanded use of SAF. For example, it joined with Canada in renewing their cooperation on climate change and commitment to achieving net-zero aviation emissions by 2050. Both countries pledged to follow through with policy changes to increase the supply of SAF.

Legislation introduced in Congress in February proposes several mechanisms to incentivize SAF production, including an investment tax credit to finance new facilities, funding support and a federal aviation-only fuel standard. The government could try to force the use of SAF, but Airlines for America, a Washington, D.C.-based trade organization, claims the market may not be ready for such a mandate.

That remains to be seen. What’s certain is that strong participation of fuel producers will be essential if the aviation industry is to meet its carbon-reduction targets. The good news is that unannounced projects could add 1 billion gal. of SAF per year to the jet fuel consumed by the world’s airlines within the next several years. Moreover, some of the largest producers have expressed increased confidence in scaling up the use of SAF, based on recent developments. These include, among other things, low-carbon fuel standards in place or under consideration in the U.S. and Canada, and the inclusion of SAF in the International Civil Aviation Organization’s carbon offset and carbon reduction scheme to curb aviation’s impact on climate change.

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