Supply of SAF is so constrained that fuel distributor Titan has opted to offer customers an offset program, which is investing in wind-power generation in South Dakota.
Everyone involved even tangentially with aerospace knows the figures by heart. Commercial aviation produces just more than 2% of all human-made CO2 emissions—although analysis covering non-CO2 emissions, such as nitrous oxide that causes global warming, puts the figure at nearer to 4%. Moreover, this proportion will rise as other industrial sectors able to decarbonize faster make more rapid progress in the short term—not to mention that the industry has made a global commitment to reach net-zero operations by 2050. As research and development funding is poured into a future generation of zero-emissions aircraft, significant steps are being taken to reduce the carbon footprint of current fleets by developing and adopting sustainable aviation fuels (SAF).
In the SAF narrative, many headline figures will be familiar to aerospace insiders. A like-for-like, drop-in replacement for standard Jet A1, SAF is presently certified to fly at blends of up to 50:50 with standard fossil-based fuel. Demonstrations by airframers, engine manufacturers, fuel refiners and airlines have shown that today’s aircraft engines can be flown safely on 100% SAF. Additional projects and programs are planned to help build the knowledge base and gain regulator confidence before SAF-only flights move from the experimental and developmental to the operational and the everyday.
The industry is relying on SAF as the crucial bridge that will allow it to reach that net-zero goal by 2050. But many challenges remain. This part of the story, too, is told in published figures, but these may not be quite so familiar.
According to estimates published in December by the International Air Transport Association (IATA), production of SAF in 2022 was at least 200% higher than in 2021. If the more optimistic estimates turn out to be accurate, that figure could have been as high as 350%. This is clearly great news, since the same IATA news release noted that airlines believe that SAF will account for 65% of the life-cycle emissions reductions needed to achieve their 2050 goals.
As impressive as these production increases are, the actual figures present a more sobering picture. In 2021, IATA says 100 million liters (26.4 million gal.) of SAF were produced globally. The association’s provisional figures suggest that may have increased to as much as 450 million liters in 2022. But if airlines are to receive enough SAF to reach their 2050 targets, the global annual production capability will need to reach 450 billion liters, meaning that production will need to increase 100-fold in a little over 25 years.
To enable that huge ramp-up in production, fuel providers will need to build new plants—and that will only happen if they have certainty that aircraft operators will buy SAF. Low production volumes and the cost of developing and proving new production technology has so far meant that SAF is still significantly more expensive than fossil fuel-based products.
Given this cost differential and supply limitations, many insiders had expected SAF uptake to be stronger among business aviation operators than commercial airlines. But last July, Farnborough Airport, the UK’s busiest business aviation airport, subsidized the cost of SAF for a short period ahead of the Farnborough Airshow, and sold out of its supply of the fuel—proving, in airport CEO Simon Geere’s view, that the price differential is still a barrier to wider adoption among the airport’s bizav clientele.
“Europe is still lagging behind compared to the U.S.,” when it comes to SAF adoption, says Daniel Coetzer, CEO of Titan Europe, distributor for Titan Aviation Fuels’ European operation. “They have a better structure in place; they can develop it better and quicker. In Europe, SAF is still very difficult to find; supply is still very unreliable at business aviation airports, unless you want to buy a big stock and keep it—but even then, you’re lucky to find it.”
Coetzer was hired to run Titan’s European division in 2022, and quickly found that the prevailing narrative in business aviation around SAF was not being reflected by the reality he was seeing at airports. Rather than the continent’s limited SAF supplies finding their way into business jet operations, the vast majority of production was being snapped up by low-cost airlines. Though these carriers would be far more vulnerable to price-sensitive customers choosing an alternative airline to save a few Euros on the cost of their trip, low-cost carriers are in a much better position to cut an attractive deal with the fuel refiners: far better for a SAF producer to be able to sell a plant’s entire output with certainty to one airline in a single transaction than to have to work hard over a long period to find multiple customers at different bizav airfields who might take small, irregular shipments of SAF as and when their customers require it.
“What most of the suppliers are doing is that they limit the stock that’s available to try to sell it in bulk to one operator,” Coetzer says. And while there has been more SAF coming onto the marketplace, to whom and where it is being sold has not changed. “There are a lot of business aviation customers would like to fly with SAF,” he adds, “but price-wise, and [in terms of] the reliability of supply, it’s still just not there.”
Book-and-Claim
The business aviation sector has identified an accounting practice called “book-and-claim” as a means of resolving short-term distribution issues while enabling customers to gain the benefits of SAF adoption. At the same time, the theory goes, book-and-claim can help prove to producers that demand for SAF exists, making investment in greater production capacity more attractive and feasible.
Book-and-claim allows a customer wishing to use SAF to pay the additional charges at the point where their aircraft takes on fuel and claim the appropriate amount of carbon credits from the flight, even if SAF is not available at the departure location. Somewhere else in the network, where SAF is available, the corresponding amount is pumped into an aircraft whose operator has not paid or asked for SAF. The overall amount of life-cycle emissions of the entire system is reduced, and the entity paying for the fuel receives the offset benefit.
In the U.S., book-and-claim appears to be working well, especially given that, to date, SAF availability is higher in certain regions—notably California—than in others. In Europe, however, book-and-claim is proving more problematic to implement.
The U.S. is a single federal entity, whereas the European Union is a patchwork of different nations, with different tax regimes and often differing local rules governing carbon credits. Additionally, the EU’s Emissions Trading Scheme (ETS) does not recognize any published standard as ensuring sufficient transparency about claimed emissions reductions from different fuel sources, so carbon credits earned from a book-and-claim transaction cannot be used by entities to meet their obligations under the ETS.
In written answers to questions from BCA, Andreea Moyes, global aviation sustainability director at AirBP, said that the company is “set up for book-and-claim sales in France, Germany, Spain, Switzerland, UK and the U.S.,” but did not provide any further details. A senior staffer at one international FBO chain has previously told BCA that, while book-and-claim is in place in the U.S., implementing a similar solution for Europe is a work in progress, and that any such solution would “not just [be] a cut-and-paste of what we have in the U.S. market.”
In July 2022, the European Parliament voted to amend the text of its ReFuelEU Aviation initiative, which, when implemented, will include some language allowing for the use of book-and-claim procedures, particularly at “minor or logistically constrained airports.” These appear to be time-limited to 10 years from the adoption. After that period, “all Union airports covered by this regulation should be supplied with uniform minimum shares of sustainable aviation fuels,” the proposed regulation says. This puts a tighter time frame on fuel providers as to when they will have to be able to supply SAF to every airport in the EU.
“Given the current supply points and levels of demand, delivering SAF to some locations is relatively expensive, and long supply chains also create avoidable carbon emissions,” AirBP’s Moyes says. “The purchase of SAF through a book-and-claim solution is an alternative, which is particularly relevant to the general aviation market where volumes are smaller and are purchased over a wide number of locations.”
In the longer term, the company is working to increase its SAF production capacity through measures such as co-producing SAF at traditional sites alongside fossil-derived fuels. Moyes notes that its Castellon refinery in Spain made its first sale of co-produced SAF in March, while in 2022 the company’s plant at Lingen, Germany, co-produced SAF from waste and residues. Five biofuel projects the company is working on are expected to help the company raise its biofuels production to 100,000 bbl. (about 160 million liters) per day by 2030.
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