Aviation Leaders Hail Green Fuel as Carbon Saviour, but Wonder Who Will Pay

Aviation Fuel (Sustainable Aviation Fuel (SAF)), BioRefineries/Renewable Fuel Production, Business News/Analysis, European Union (EU), Marketing/Market Forces and Sales, Opinions, Other Conferences/Events, Policy, Presentations, Sustainability

January 20, 2023

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(EurActiv/Reuters) Greener fuel is the only way airlines will meet strict global carbon emission targets, executives meeting in Dublin this week agreed, but there’s little consensus on who should foot the hefty bill to ramp up production.

Sustainable aviation fuels (SAF), which rely on feedstocks like used cooking oil to reduce emissions by up to 80% from conventional fuel, is seen as the carbon saviour for an aviation sector often cast as a villain in the fight against climate change.

But the nascent industry makes up less than 1% of fuel used and costs between three to five times more than traditional jet fuel.

That has stirred a debate about whether governments, airlines or oil producers – or a combination of all three – should fund the expansion of production required to hit a proposed European Union target of 20% by 2035.

Aengus Kelly, chief executive of lease giant AerCap, said SAF was the only option, but cited an estimate that the transition could require investment of $1.5 trillion over 30 years.

“That’s an extraordinary cost,” he told the Airline Economics conference, one of a pair of annual events that bring together the world’s largest aircraft owners.

“Government won’t do it all. That’s not going to happen.”

Willie Walsh, head of airline industry body IATA, told the conference airlines shouldn’t expect traditional oil producers to meet the industry’s needs.

“There has to be greater sharing of the burden to ensure that the industry, everybody can make it to net zero,” he said.

Consumers aren’t willing to fork out either, with many airlines saying less than 5% of customers fund carbon offsets or SAF surcharges they offer.

Many complain that action is pointless until huge emerging market emitters like China and India agree to play their part, one executive said.

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With the right policy support, 30 SAF plants could be built across Europe over the next eight years, she (Leigh Hudson, IAG’s sustainable fuels and carbon manager) said in an emailed statement. READ MORE

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