Can SAF fill demand for jet fuel?

Can SAF meet jet fuel demand? Global jet demand is rising as more passengers take to the skies, with summer air travel driving aviation fuel consumption closer to pre-pandemic levels, according to S&P global data. Global demand for jet fuel and kerosene reached 8 mn b/d this summer, a first since late 2019, while annual demand is forecasted to rise to around 550k b/d in 2024, pushed up by markets in China and Western Europe. Can sustainable aviation fuel (SAF) be adopted widely enough to grab a substantial bite of the market?

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Growing supply to meet demand: Some 2 bn gallons of SAF is forecasted to hit the market by 2028, meaning an aviation sector goal of achieving 3 bn gallons of SAF by 2030 is in reach, according to a Sustainable Aviation Fuel Grand Challenge (SAF Grand Challenge) report. Current sustainable aviation fuel production represents “less than 1% of demand,” despite a threefold y-o-y hike in production and usage of the fuels in 2023, International Air Transport Association (IATA) Area Manager for the Gulf and Near East Khaled AlEisawi said on the sidelines of the International Civil Aviation Organisation’s (ICAO) Conference on Aviation and Alternative Fuels (CAAF/3) in Dubai last month.

What’s changing? Reducing ethanol’s carbon intensity will be necessary to expand SAF production, the SAF Grand Challenge report finds. As it stands, ethanol’s lifecycle carbon intensity is some 46% lower than gasoline. Climate-savvy agriculture processes are being integrated into the SAF industry, with a focus on cutting down the carbon intensity of starch-based ethanol. SAF production capacity will also be boosted through the development of low-carbon intense sugar feedstocks from agricultural residues, the report added.

SAF is key to achieving the sector’s sustainability goals: Plans to reach zero emissions in aviation by 2050 depend on alternative fuels “by more than 65%,” the IATA official noted. The 77th IATA Annual General Meeting in Boston in October 2021 saw the passing of a resolution which commits member airlines to net-zero emissions by 2050.

Serving SAF targets: Qatar Airways has committed to integrating 10% SAF usage across its planes by 2030, according to its annual report. UAE airline Emirates aims for SAF to comprise 50% of its fuel supply by 2030, Capa reported. EgyptAir committed “to using 2% SAF for all its flights,” EgyptAir fuel and emission director Ahmed Matter told Ahram Online last year.

The holdup: SAFs are costly and their adoption has been sluggish. Their cost is three to four times higher than kerosene, making them less competitive and thereby decreasing their production — which is estimated to have reached 0.1% of global jet fuel consumption.

Global emission targets are being revised: Fuel-efficient aircraft delivery delays, high prices for alternative fuel, and a lack of international regulator support is causing airlines to backtrack on emissions targets. Air New Zealand announced it was reassessing its 2030 target in July. This makes it the first major carrier to roll back its climate targets, raising concerns that delivery delays and sustainable aviation fuel (SAF) production costs could impact other airlines’ plans.

Regional players making moves: Emirates took in over 3k metric tonnes of neat SAF from Shell Aviation at London Heathrow Airport, which was integrated into the airport’s fuelling infrastructure network earlier this year. Emirates inked an agreement in March with Shell Aviation for a 300k gallon supply of blended sustainable aviation fuel (SAF) for use at its hub in Dubai International Airport (DXB). Adnoc Group saw its Sustainable Aviation Fuel (SAF) production team bag the Sustainability Initiative of the Year award during the Oil & Gas Middle East Awards in March. The firm became the first in the region to receive an International Sustainability Carbon Certification (ISCC) to produce sustainable aviation fuel (SAF) in October.

SAF gained traction this year: Airbus and Total Energies inked a partnership wherein TotalEnergies will supply Airbus with more than half of its needs in Europe for sustainable aviation fuel (SAF) back in February. Airbus also plugged investments in July into leading SAF producer LanzaJet to boost capacity and grow its production capabilities.

KSA to take the lead: Saudi Arabia’s SAF market is forecasted to grow by 56% to reach USD 108.38 mn by 2028, driven by a growing influx of air traffic, a report from analysts Infinium Global Research finds.

Rising interest: US multinational conglomerate Honeywell, in partnership with the European Bank for Reconstruction and Development, will complete a feasibility study within the next few months for a proposed sustainable aviation fuel production facility in Egypt.

A regional hub: Egypt’s state-owned firms EgyptianPetrochemicals Holding Company (ECHEM) and Alexandria National Refining and Petrochemicals Company (ANRPC) announced in February plans to team up with an undisclosed local private-sector player to establish a USD 380 mn sustainable aviation fuel (SAF) project with an estimated production capacity of 120k tons a year. A financial study for the project wrapped up in April, with work on the project scheduled to start at the end of 2026.