The global production of sustainable aviation fuel (SAF) is expected to reach 300 million liters this year or even 450 million liters if the most optimistic calculations are taken into account. Although an important step, it is still a far cry from the thirty billion liters that the airline industry is requesting by 2030, says IATA. SAF production is increasing but more incentives are needed.

The association of international airlines presented the latest estimates on the second of two Global Media Days in Geneva. The 300-450 million liters to be produced this year cover 0.1 to 0.15 percent of the global aviation fuel requirements. They compare to 100 million liters in 2021 (0.04 percent) and just 25 million liters in 2019 (below 0.01 percent).

IATA has been pushing hard for more capacity since it adopted its resolution to get to net zero emissions in 2050 at last year’s Annual General Meeting in Boston. Director General Willie Walsh said during this year’s meeting in Doha that progress was made, but that the rate at which SAF is too slow. This concern was also voiced by Airbus CEO Guillaume Faury during last week’s Airbus Summit. The positive thing is that ICAO member states adopted their resolution in October that calls for steps to stimulate SAF production.

“There was at least triple the amount of SAF in the market in 2022 than in 2021. And airlines used every drop, even at very high prices! If more was available, it would have been purchased. That makes it clear that it is a supply issue and that market forces alone are insufficient to solve it”, Walsh is quoted in a media statement. “Governments, who now share the same 2050 net-zero goal, need to put in place comprehensive production incentives for SAF. It is what they did to successfully transition economies to renewable sources of electricity. And it is what aviation needs to decarbonize.”

In the last two years, numerous oil companies have announced investments in SAF production capacity. Neste’s Thorsten Lange said last week during the Airbus Summit in Toulouse that he has seen ten to twenty announcements from companies that are building SAF plants with an estimated capacity of five to seven tonnes. Neste will have the capacity for 2.2 million tonnes in 2026. IATA has identified 115 initiatives for SAF production from seventy companies through 2027, which would grow the capacity to 61.25 billion liters. 

Need for positive policies

Getting to thirty billion liters/24 million tonnes of SAF for aviation in 2030 would mean that production gets to a tipping point, says IATA, as it equals thirty percent of total renewable fuel production. But more is needed. Walsh reiterated that IATA prefers incentives for SAF (the US way) that are comparable to those for biogas and biodiesel over mandates (the European Way). “A mandate rarely delivers the optimal economic outcome, typically resulting in higher prices, and thus diverting resources which could be deployed for other environmental investment”, IATA says in a SAF fact sheet. “Positive incentives are the most effective policy tool and involve the allocation of public funds (from an array of support incentives). Positive policies reduce project risk, making a business case more competitive and allowing organic supply and demand to develop into a sustainable market.”

Thorsten Lange said that investors and oil companies are waiting for clear regulations: “If the regulations aren’t there, people will wait. If the returns on investments aren’t there, there are no investments. We need regulations.” ICAO will organize a third conference on SAF in November 2023 to address the various issues that could block a ramp-up of production capacity.

From thirty billion liters in 2030, production will have to grow to 229 billion liters in 2040 and 449 billion liters/360 Mt in 2050 to meet the net zero targets. While hydrogen is seen as a clean fuel for the future, the airline industry will be dependent on SAF for 65 percent to abate 8.2 Megatons of carbon emissions in 2050, IATA says. And this needs to be 100 percent SAF made from non-food feedstock.

Other options for governments to stimulate SAF production are the adoption of globally recognized sustainability standards and the support of sustainable aviation fuel R&D and demonstration plants.  Implementing policies that de-risk investments into SAF production are also welcome.

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.

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