The production of SAF (Sustainable Aviation Fuel) should reach 300 million liters in the world in 2022. The number is three times that of last year. However, it still represents 0.1% of the total fuel used in the world by aircraft.
This does not prevent the sector from having ambitious plans for the SAF: production is expected to reach 8 billion liters in 2025, which would represent 2% of the market. Then, stronger progress would come in the 2030s and 2040s. In 2050, the plan is for production to reach 449 billion liters per year, making it the standard fuel.
Airlines, publicly pressured to reduce their pollutant emissions, are interested in buying more SAF. In addition to polluting 80% less than kerosene, the new fuel is easy to adopt: it can be used in existing aircraft engines, without major adaptations. SAF can also be mixed with kerosene in various proportions.
The demand for fuel also grows because of corporate flights. Companies such as KPMG Australia and BCG (Boston Consulting Group) have recently made agreements with airlines so that the flights purchased for their employees are made using clean fuel, and have agreed to pay extra fees for this.
“Our biggest source of emissions comes from business travel, and we’ve committed to cutting emissions in half by 2025 compared to 2018,” David Webb, chief sustainability officer at BCG, told Reuters.
The Australian Qantas, which has entered into agreements of this type with five companies, has committed to using 10% SAF in its fuel matrix by 2030, and raising this percentage to 60% by 2050.
Despite the high demand, the advancement of the SAF is slow for several reasons, especially the difficulty in increasing production. The fuel is made from oils from plants such as palm and castor beans, and from organic waste, including discarded vegetable oils. Setting up a factory takes three to five years.
Another obstacle comes from the technical areas of the airlines: there are doubts whether the continuous use of the SAF can affect the useful life of the engines or require more maintenance. As the technology is recent, there are still no tests that prove the effects of burning vegetable oils for years.
There is still the problem of price: each liter of SAF costs 2.5 to 5 times more than aviation kerosene. Thus, even with the price of oil having risen a lot this year, the new fuel is still far from being competitively priced.
The airline industry hopes that with wide-scale adoption, costs will be more manageable, as production will be able to take place in various parts of the world. With oil, political issues in regions like the Middle East and Russia impact prices.
According to IATA (International Air Transport Association), there are around 100 SAF manufacturing projects in 30 countries, but most are in the US and Europe. In Latin America, there is a refinery being built in Panama, which should be one of the largest in the world.
In Brazil, there is a project in Manaus, by BrasilBioFuels, expected to start operating in 2025.
“Latin America is very well positioned to capitalize on this market, as it has a lot of potential to supply raw materials”, says Hemant Mistry, Director of Energy Transition at IATA.
The airlines advocate that governments adopt incentive measures, such as tax incentives and the creation of regulations. In Brazil, for example, there is no exact determination of which taxes will be charged on the product or what percentage of mixture with kerosene can be used.
At the same time, businessmen criticize pressures such as the imposition of fees for those who continue to use kerosene. On Wednesday (7), the European Union reached an agreement on a law to increase the amount that airlines have to pay for their carbon dioxide emissions. The law still needs to be approved by the European Parliament and ratified by the bloc’s countries.
“As we’ve seen in the past, there will be countries that will continue to see this as an opportunity to raise revenues through levies in the name of the environment. None of this money will really go towards solving environmental problems”, questions Willie Walsh, director general of the Iata.
There is also a concern that governments prioritize investments in biodiesel, for buses and trucks, instead of SAF, since, generally, the same refinery can do both. “If there are financial incentives for biodiesel, refineries can produce more of it and not focus on the SAF. There needs to be a balance. Don’t forget about aviation”, asks Mistry.
Stimulus models vary across continents. In Europe, the EU is debating a rule that obliges airlines to use at least 2% of SAF in their fuel matrix from 2025 onwards. The percentage would rise gradually, until reaching 63% in 2050. have flights departing from the countries of the block.
In the US, in 2021, President Joe Biden launched a program to stimulate SAF production, which includes tax credits and partnerships with farmers to obtain raw materials. The goal is to achieve production of at least 3 billion gallons of SAF per year by 2030 and have clean fuel to supply 100% of American aviation by 2050.
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