Airlines Not Switching Quickly Enough to Green Jet Fuel, Study Says

by Joanna Plucinska (Reuters) Most of the world's airlines are not doing enough to switch to sustainable jet fuel, according to a study by Brussels-based advocacy group Transport and Environment, which also found too little investment by oil producers in the transition.

The airline sector is calling for more production of the fuel, which can be made from materials such as wood chips and used cooking oil.

"Unfortunately, airlines at the moment are not on the trajectory to have meaningful emissions reduction because they're not buying enough sustainable aviation fuel," Transport and Environment aviation policy manager Francesco Catte said.

As it stands, SAF makes up about 1% of aviation fuel use on the global market, which needs to increase for airlines to meet carbon emission reduction targets. The fuel can cost between two to five times more than regular jet fuel.

A lack of investment by major oil players, who have the capital to build SAF processing facilities, is hampering the market's growth, the study says.

In its ranking, Transport and Environment pointed to Air France-KLM (AIRF.PA), United Airlines (UAL.O), and Norwegian (NAS.OL), as some of the airlines that have taken tangible steps to buy sustainable jet fuel, particularly its synthetic, cleaner burning version.

But 87% are failing to make meaningful efforts, the ranking shows, and even those who are trying could miss their own targets without more investment.

Airlines such as Italy's ITA Airways, the successor airline to bankrupt Alitalia, and Portugal's TAP have done very little to secure SAF in the coming years, the ranking shows.

A TAP spokesperson said the airline was the first to fly in Portugal with SAF in July 2022, "and is committed to flying with 10% SAF in 2030".

"While we would have liked to increase our investment in SAF, the low availability...and high costs...have limited our ability to do so, considering also our start up condition," an ITA spokesperson said. READ MORE

T&E’s SAF Observatory findings indicate that airlines are currently unprepared to transition to sustainable jet fuel. Of the 77 airlines assessed, none has acquired sufficient sustainable aviation fuels (SAFs) to qualify in category A, while 67 are in category D, as they do not purchase SAF, or they do so at levels too low to make a meaningful impact on emissions. Less than half of the airlines have established targets for SAF use, and none have set targets for e-kerosene.

SAF consumption is projected to rise from 0.15% to 1.3% for the airlines ranked in the study by 2030, which would reduce the aviation sector’s greenhouse gas emissions by less than 1%.This is not even enough to offset growth in air traffic. Emissions reductions could be enhanced if airlines prioritised the purchase of e-fuels over unsustainable biofuels, as e-kerosene currently accounts for less than 10% of SAF purchases, while crop-based biofuels comprise around 30%.

There are notable differences in performance across regions. For instance, while European airlines have purchased less SAF than their North American counterparts, they are projected to achieve greater emissions reductions by 2030 due to higher volumes of e-kerosene and reduced reliance on crop-based biofuels.

Airlines are not solely at fault for their limited uptake of SAF, particularly e-kerosene. Many airlines are based in regions without supportive regulatory frameworks. Where such frameworks do exist, they often lack robust sustainability criteria, allowing problematic biofuels to proliferate. Moreover, major oil companies, despite their profitability and capacity for investment, have largely neglected the e-kerosene market.

Big oil companies, governments, and airlines can drive change to ensure the take-off of sustainable aviation fuels by following these recommendations:

● Oil companies should engage in the e-kerosene market by developing projects themselves or by investing in and/or buying e-kerosene from other companies.

● Countries without SAF mandates and/or frameworks should establish them, incorporating robust sustainability criteria to prevent the use of the least sustainable biofuels, whilst promoting e-kerosene.

● Countries already having SAF mandates and/or frameworks should limit the use of unsustainable biofuels, set e-kerosene sub-targets, and enforce robust penalties for non-compliance. Moreover, mandates should be complemented with incentives to drive SAF prices down, especially for e-kerosene, such as tax credits, grants, low-interest loans, state guarantees, contracts for difference.

● The EU should ensure the Clean Industrial Deal effectively complements the SAF mandate set by RefuelEU with incentives and regulatory measures. The Deal presents the opportunity to develop a robust strategy for e-kerosene fostering investment and production, whilst reducing the e-kerosene green premium. 2 | Briefing

● Airlines should focus on the quality and the scalability of the SAF they buy, rather than rely on unsustainable and non-scalable fuels if they want to achieve meaningful emissions reductions. Moreover, by signing early MoUs and offtake agreements with e-kerosene producers or directly investing in these projects, airlines can support the uptake of e-kerosene in the market. READ MORE