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Fueling up: SAF access makes air cargo greener

Ivan De LucebyIvan De Luce
February 23, 2023
in Features
Reading Time: 7 mins read
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Sustainable aviation fuel has been heralded as the aviation industry’s best bet to decarbonize, but the industry has a long way to go before SAF eclipses traditional kerosene as carriers’ fuel of choice.

Slowly but surely, fuel manufacturers, airlines, digital cargo booking platforms and governments are working to increase SAF production to bring costs down, with the goal of eliminating traditional jet fuel to reach net zero carbon emissions by 2050.

Stakeholders agree that SAF adoption is the fastest way to lower carbon emissions produced by jet fuel, the single largest polluter in aviation. The aviation industry accounted for about 12% of all carbon dioxide (CO2) emissions from transport sources in 2021, according to a report by the Air Transport Action Group (ATAG).

Despite its popularity, some stakeholders have been hesitant or unable to fully embrace SAF due to its high price tag and lack of availability in some regions. In fact, SAF accounts for less than 1% of fuel used on commercial and cargo airplanes, according to a Jan. 10 report by the World Economic Forum (WEF). And according to fuel supplier Neste, SAF accounts for around 0.1% of total global jet fuel demand.

“SAF is expensive because of its scarcity, and it will remain so until it becomes more available or other alternative solutions are developed,” Martin Drew, senior vice president of global sales and cargo at Etihad Airways, told Air Cargo Next. “There is much to do before SAF makes a notable difference to the industry.”

A rise in SAF supply

While chemically similar to traditional jet fuel, SAF is not derived from fossil fuels. Instead, organic and waste materials, or such as waste oils, algae, forest residues, municipal solid waste, ethanol, industrial gasses and atmospheric CO2 are converted intoSAF, according to WEF.

Synthetic SAF, as opposed to standard bio-SAF, is made from synthetic materials such as hydrogen obtained from low-emission resources and CO2 captured from the air or other industrial processes. It is far less common than its organic counterpart and comes at a higher cost because it is produced in smaller quantities.

TKTK-based Neste, the world’s largest bio-SAF supplier by volume, produces 100,000 tonnes of the fuel per year in its Finland facility, told Air Cargo Next. However, with ongoing investment in its Singapore and Rotterdam refineries, the company plans to grow its supply 15-fold to 1.5 million tonnes per year by . By 2026, when the expansion of Neste’s Rotterdam refinery is complete, supply will jump to 2.2 million tonnes, the company added.

Neste partners with nearly every major carrier for SAF supply, including Air France-KLM, All Nippon Airways, American Airlines, Lufthansa, Malaysia Airlines, Singapore Airlines and United Airlines, as well as logistics companies such as DHL and Cargolux.

The supplier also recently partnered with fuel suppliers EPIC Fuels, Signature Aviation and Avfuel to supply Boeing with 21,200 tonnes of blended SAF through 2023, according to a Feb. 15 release from Neste. The Neste MY Sustainable Aviation Fuel will make up 5,200 tonnes of pure SAF supply and will be blended with conventional jet fuel at a 30-to-70 ratio to produce 21,200 tonnes of blended SAF. EPIC, Signature and Avfuel will deliver the fuel to Boeing for use in its ecoDemonstrator program as well as for fuel storage. In 2021, Boeing committed to manufacturing planes certified to run entirely on SAF by 2030, the release stated.

Availability, price challenges

Although SAF adoption is increasing at a significant clip, challenges remain. No carrier has made SAF its fuel of choice, relying instead on kerosene for nearly all flights, occasionally including a percentage of SAF in the fuel mix.

“There are still two main challenges regarding SAF,” said Dimitri Bettoni, head of cargo network and product development at Brussels Airport (BRU). The first is its availability. “It is not yet available in large quantities; there must be sufficient raw materials and production capacity,” he said. The second is itswhich will evolve as supply and production capacity increases, he noted.

For BRU, SAF supply jumped considerably Jan. 1 with the opening of SAF fuel lines directly to the airport via the North Atlantic Treaty Organization’s (NATO) Central European Pipeline System (CEPS). Along with Liege Airport (LGG) — the other major Belgian airport to offer the fuel — BRU can receive, store and distribute SAF to customers.

The CEPS pipeline offers SAF through Neste’s MY Sustainable Aviation Fuel, and has the potential to reduce greenhouse gas (GHG) emissions by up to 80% compared to fossil jet fuel, according to Neste. Previously, the pipeline only carried standard kerosene to BRU and LGG. Several airlines are in talks with suppliers to use SAF at the airports.

See also: Digital futures: 5 air cargo tech trends to watch in 2023

SAF is two to eight times more expensive than traditional jet fuel, according to a 2021 report by consulting firm Deloitte and fuel supplier Shell. For context, jet fuel prices ended last week at $2.55 per gallon, according to the International Air Transport Association (IATA) and energy information provider Platts. If jet fuel were to be replaced by SAF without any government subsidies to lower costs, overall airline operating costs and ticket prices would increase by 30% to 200%, the report found.

There is much to do before SAF makes a notable difference in lowering emissions, Etihad’s Drew said.

“In the short term, these price hikes [in the report] are prohibitive, and the immediate adoption of SAF is therefore compromised by exorbitant costs and the availability of feedstocks,” he said.

SAF initiatives grow

Partnerships among carriers, freight forwarders and suppliers are steadily increasing SAF availability. Recently, Lufthansa partnered with Swiss energy company VARO Energy for SAF research. By 2026, VARO hopes to have an SAF supply of 260,000 tonnes per year. The fuel will be made from biogenic residual materials and then mixed with kerosene at a maximum of 50% SAF for flights.

This month, United Airlines teamed with energy infrastructure provider Tallgrass and biorefining company Green Plains to manufacture ethanol-based SAF under the moniker Blue Blade Energy. The joint venture will invest $50 million in the project.

In November, the carrier’s venture fund, United Airlines Ventures, committed an investment of up to $37.5 million in biorefinery firm NEXT Renewable Fuels for a flagship biofuel refinery in Port Westward, Ore. The plant, expected to begin production in 2026, could produce up to 50,000 barrels per day of SAF, renewable diesel and other renewable fuels. The plant will receive 100% of its feedstock from fuel supplier BP.

Digital cargo booking platforms have emerged as additional pathways for carriers and freight forwarders to monitor and add percentages of SAF to flights. In September 2022, CargoAi introduced its Cargo2ZERO solution, which features a dashboard that provides customers with a CO2 efficiency score for bookings and analytics on procurement decisions, including search behavior and greenest option usage over time.

Since launching, customers have not fully embraced the option to add SAF, Matthieu Petot, chief executive officer and founder of CargoAi, previously told Air Cargo Next.

“We see a big interest in the SAF purchase after each booking with 450 users having started the process,” Petot said. “Unfortunately, the conversion to actual SAF purchase is still too low compared to the level it should be, if we want to make air cargo more sustainable.”

Despite slow conversion among customers, CargoAi gained the attention of stakeholders when it won the start-up/small business award for its carbon calculator during the 2022 TIACA Air Cargo Forum.

Other digital booking platforms have promoted SAF usage. In October, Air France-KLM Martinair Cargo introduced its , which allows customers to choose from 2%, 5%, 20% or 100% SAF contribution to a freighter’s fuel mix through the carrier’s myCargo booking platform. And in May, Freightos introduced its carbon emissions calculator through its WebCargo platform.

Government support to meet SAF goals

To increase SAF availability, Neste and Drew called for more governmental policy support for the global aviation industry, as well as incentives or mandates toward research and development for SAF production, including grants and tax credits to create the demand certainty needed to attract new investments.

Governments in Europe and the U.S. are working toward that regulatory support. The U.S. Department of Energy (DOE) in January announced a $118 million fund for biofuel production, to be awarded to 17 projects around the country. The fund builds on the $200 million the DOE already has invested in projects over the past two years, according to a Jan. 26 DOE release.

Washington state lawmakers in January proposed a bill aiming to increase SAF production through a tax incentive for manufacturers and purchasers. The incentive in Senate Bill 5447, sponsored by Spokane Democratic State Sen. Andy Billig, would go into effect July 1, 2024, as long as a facility that can produce at least 20 million gallons (75,700 tonnes) of SAF is created in the state, according to the bill.

“Washington state is already a leader in aerospace generally, and we have all the tools to become a leader in sustainable aviation fuels as well,” Billig told Air Cargo Next. “When we start producing SAF, Washington will benefit from the significant economic investment in a production plant as well as the creation of family-wage jobs, plus our state and the entire planet will benefit from the positive environmental impacts of SAF.”

The bill also creates a tax credit for businesses that sell or purchase SAF as long as the fuel generates at least 50% less CO2 than jet fuel.

In the U.K., carbon capture company LanzaTech in December 2022 received 25 million euros (U.S. $31 million) in government grant funds for its DRAGON project, which seeks to convert waste gasses into SAF. The proposed plant will ferment gas to make organic ethanol, which serves as feedstock for synthetic kerosene production with partner LanzaJet’s technology.

The U.K. Department for Transport also granted sustainable fuels technology company Velocys $32.8 million for the Altalto Immingham SAF project in December. The project, developed in partnership with British Airways, will establish a commercial waste-to-SAF plant in Immingham.

Meanwhile, the European Commission’s ReFuelEU project is working toward 2% SAF on total kerosene imports by 2026. The project, part of the European Union’s larger Fit for 55 in 2030 package, aims to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.

As part of this goal, BRU is working with the commission’s Stargate project to aim for 5% SAF on kerosene imports by 2026, Bettoni said. To increase SAF production, the project will conduct a population survey and awareness campaign to collect more used frying oil from the public, he added.

In addition to governmental support, businesses also can play a role in creating demand by voluntarily using SAF for airfreight operations, Neste told Air Cargo Next.

“We still have a long way to go, but the key message is that we don’t have the luxury of waiting anymore,” the company added. “We need action and we have a solution available, so let’s fully utilize this while at the same time work on the solutions of tomorrow.”

Tags: ACNsustainabilitysustainable aviation fuel (SAF)
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