Airlines are finding it hard to go green.
As signs emerge daily of the climate crisis accelerating, the painfully slow rollout of sustainable aviation fuel (SAF) is revealed in recent figures released by an airline industry body and research by leading analysts CAPA.
The study by CAPA shows that this month, airlines will operate their 500,000th flight powered by SAF.
Industry body the International Air Transport Association (IATA) says that SAF production last year was about 300 million litres – just 0.1 per cent of global aviation fuel demand. Before the Covid-19 pandemic, airlines were consuming more than 410 billion litres of jet fuel a year. Sustainable fuel can be made from food waste, garbage and special crops but is anything from three to five times the cost of traditional Jet A1 fuel – kerosene. The airline industry is responsible for around 2 per cent of global CO2 emissions.
While there are about 90,000 to 100,000 airline flights a day, just 200 of them are powered by SAF. The association estimates that global SAF production was approximately 300 million litres in 2022, of which airlines reportedly used every single drop.
The association’s director-general Willie Walsh says that as the airline industry moves to SAF, it will have to recover those extra costs and fares will rise.
“We’ve used every single drop of SAF that has been produced. We’ve estimated that led to an extra $US350 million ($555m) of costs in 2022 at a time when the industry was losing money,” he told CAPA.
IATA believes that 30 billion litres of SAF output (about 100 times current production) is a “tipping point” for SAF production and utilisation for commercial aviation. The association says this volume can be reached by about 2030, provided that SAF accounts for about 30 per cent of global renewable fuel production capacity.
With long-term airline passenger growth forecast at 5 to 6 per cent over the next few decades, global aviation fuel consumption is inevitably going to grow, CAPA research shows. Even with ever-more efficient aircraft coming into service, better air transport management systems and improvements on the ground, global aviation fuel use could grow to around 650-725 billion litres by 2050.
“We’ve said to manufacturers that if you produce it, we’ll buy it,” Walsh says.
While other technology such as battery-powered and hydrogen-fuelled planes is being developed, work to deliver commercial aircraft will take years and these will be smaller and used on shorter routes. The best solution to meet aviation’s goal of net zero carbon emissions by 2050 is SAF, which is a “drop-in” fuel that can generally be used in existing engines.
IATA senior vice-president, sustainability and chief economist Marie Owens Thomsen said at the association’s annual meeting in Turkey that the market for SAF was virtually non-existent.
“Markets need infrastructure, registries, certificates, the various types of sustainable aviation fuel we have in the future need to be certified and approved. None of that exists today,” she said.
“This is where we depend so much on the policymakers.”
She said flying had to be done sustainably to protect the planet “on which we depend”.
“We have to understand that we’re at the very beginning of that journey.”
IATA believes SAF production needs governments to take a third of the risk by investing a third of the capital needed for research and new facilities.
In this country, Air New Zealand and the government have announced a $2 million-plus investment in next-phase studies to consider the feasibility of producing SAF in Aotearoa.
The announcement included a commitment of more than $1.5 million from Air NZ and $765,000 from the government. This new investment follows a year-long request for proposal process that invited innovators to demonstrate the viability of operating a SAF plant at a commercial scale in New Zealand.
The airline and government officials have evaluated proposals from multiple international SAF producers to understand what technologies are available globally and how these could be used in the New Zealand context.
Moving into phase two, the working group is progressing two proposals: one with LanzaJet and another with Fulcrum BioEnergy, both US-based.
The next phase will further evaluate the technical, economic, supply chain and environmental feasibility of establishing and operating a SAF production facility in New Zealand.
Air New Zealand chief sustainability officer Kiri Hannifin said much of Aotearoa’s economy was based on natural assets including tourism and food production.
“Globally, SAF is in very high demand but limited supply. Commercially producing SAF in New Zealand would not only help lower the country’s emissions while creating jobs, regional economic development, and Māori and iwi investment opportunities, but also provide energy security and energy independence, which is something New Zealand doesn’t have.”
The second stage of the SAF feasibility work will continue through to early next year.
Wood waste is seen as one source of raw material for SAF production in this country.
CAPA highlights another impediment to decarbonising aviation. There are only a limited number of airports that offer SAF deliveries for commercial aircraft. Some key hubs including LAX, San Francisco, Heathrow, Changi and Frankfurt do have infrastructure to deliver the fuel. The first test flights of commercial aircraft using a blend of jet-type kerosene and SAF to power their engines occurred during 2008, including an Air New Zealand flight.
By early 2011, airlines had started to operate commercial services using SAF. Since then, more than 50 airlines have powered a flight with their aircraft using SAF. Most of these airlines have operated these flights on an irregular basis, says CAPA, either as tests or as a limited series of commercial flights.
International Civil Aviation Organisation data on offtake agreements shows the amount of SAF purchases agreed to by airlines grew from 0.4 billion litres in 2020 to 9.9 billion litres in 2021 and 21.7 billion litres in 2022. Most of the announced deals are multi-year offtake arrangements, with some stretching out as far as 20 years.
“These provide producers with desperately needed certainty around production volumes and revenue, which will support their investments in production expansion,” the CAPA research says.
* The chair of Air New Zealand’s sustainability panel, Jonathon Porritt, will stand down at the end of the month after nine years in the job. Sam Mostyn will take over the role after sitting on the panel since 2021. The panel was established in 2014 under former chief executive Christoper Luxon to work with Air New Zealand to improve and develop its sustainability strategy and drive the airline forward in the field of sustainable aviation.
Grant Bradley has worked at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.