Could Egypt position itself as a regional hub for SAF production? The US Commercial Service of the US Department of Commerce and the US Embassy in Cairo held a roundtable discussion attended by Enterprise Climate on decarbonizing the aviation industry and growing the use of sustainable aviation fuel (SAF) in Egypt and beyond last Thursday. GE Aerospace, Boeing, Egypt Air, and representatives from the Egyptian government discussed the importance of using SAF to slash CO2 emissions by as much as 80% over the green fuels’ life cycle and the future of Egypt’s contribution to SAF production.

Aviation industry emissions are set to grow by 2030: While the aviation industry currently accounts for 2.5% of global emissions and 12.5% of the transportation sector’s greenhouse gasses, emissions are set to grow by 2030 as passenger numbers swell from the current 4.5 bn to 10 bn, Regional Head of Global Sustainability Policy and Partnerships at Boeing International for MENA and Turkey Mohamed Al Ghailani noted. The volume of goods transported by the air freight forwarding sector is also set to increase from a current USD 7 tn to USD 9 tn worth of goods by the end of the decade, he added.

African countries need financing and knowledge transfer programs to become regional hubs for SAF production, Director of Fuel and Emission at EgyptAir Ahmed Mattar said. The Egyptian airline will source a minimum of 2% of its fuel needs from SAFs from Europe, he told Enterprise Climate, noting that EgyptAir is also working with Egypt’s Environment Ministry and Oil Ministry to source more of its fuel needs from SAFs.

Egypt is well-positioned to supply SAF: The US private sector is looking to tap Egypt for SAF production, Regional Minister Counselor for Commercial Affairs Keith Kirkham said. US companies are currently exploring cooperation pathways with both the private and public sectors of Egypt to jointly produce SAFs, Kirkham noted. “We think there is potential for Egypt to develop as a potential producer of SAFs given the EU conditions that require air carriers to use sustainable aviation fuels even when transiting,” he told Enterprise Climate. “Egypt, rather than being a buyer, could be a seller of this, which would have an obvious export earning potential,” he added. Technology, infrastructure, and high costs are some of the challenges currently hindering the growth of the sector locally, Mattar noted.

Egypt has been courting investments: CEO of Egypt’s Waste Management Regulatory Agency Tarek El-Araby met with representatives from Egypt’s state-owned Petrochemical Holding Company last month to discuss potentially investing USD 200 mn to recycle cooking oils to produce sustainable aviation fuel and biodiesel.

Production is still ramping up: Global production rates of SAF tripled to 300 mn liters in 2022 and 130 renewable fuel projects by 85 producers in 30 countries are intent on producing SAF as part of their production of renewable fuels, according to the International Air Transport Association.

But there are challenges: SAFs are costly and their adoption has been sluggish. Their cost is 3-4x more expensive than kerosene, making their use less price competitive and thereby decreasing their production — which was estimated to have reached 0.1% of global jet fuel consumption, according to Bloomberg.

The UAE’s Masdar is going big on SAF investments: UAE renewables company Masdar recently signed an agreement with Airbus to jointly develop sustainable aviation fuels, green hydrogen, and direct air capture technologies. The agreement also sees the companies launching a book and claims framework that would enable aircraft operators to source their SAF supplies without being geographically connected to a stockpile site. The renewables giant is also looking to establish MENA’s first commercial-scale SAF production facility in Abu Dhabi. Masdar, Adnoc, Emirates Airways, and Tadweer are conducting the feasibility study for the project with BP.

And it’s picking up regionally: Omani biofuels producer Wakud plans to establish a plant with a capacity of 250 tons per day at an investment cost between USD 120-150 mn in partnership with Omani-British green energy venture X2E, which will produce sustainable aviation fuel and marine fuels by 2025.

IN OTHER SUSTAINABLE AVIATION NEWS-

France stepping up efforts in SAF production: French President Emmanuel Macron said EUR 1 bn will be granted to help fund a SAF plant and efforts by private airlines to develop cleaner planes, Bloomberg reported on Friday. The pledged aid includes EUR 200 mn to help develop renewable jet fuel projects, including one in southern France by French startup Elyse Energy, Macron said. The French biofuel startup and its partners, which include TotalEnergies, plan to invest EUR 1 bn to produce synthetic jet-fuel using wood waste and low-carbon hydrogen. Elyse Energy aims to have a final investment decision on the plant by 2026 and plans to launch operations in 2028.

Airlines want EU taxpayers to bear cost of sustainable air travel: Representatives of airlines including Neste Oyj, KLM, and Etihad Airways are calling on EU lawmakers to replicate US incentives to help airlines transition to SAF, Bloomberg reported on Friday. Airline executives are warning that while the US’ USD 369 bn Inflation Reduction Act (IRA) provides subsidies of USD 1.75 per gallon of SAF used, Europe — which will require SAF to comprise at least 6% of aviation fuel by 2030 — is lagging behind. EU mandates on SAF use, as well as flight restrictions to curb CO2 emissions, could send air fares “through the roof,” Bloomberg quotes Emirates Airline President Tim Clark as saying ahead of the Paris Air Show, which starts today.

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