EU SAF Blending Mandate Proposals Ambitious but Feasible, Says SkyNRG Analysis Report

July 26, 2021

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by Christopher Surgenor (GreenAir Online) An analysis by major sustainable aviation fuels (SAF) supplier SkyNRG of the European Commission’s ReFuelEU Aviation initiative, part of the ‘Fit for 55’ package of legislative proposals unveiled last week, shows around 300 SAF plants with an average production capacity of around 100,000 tonnes per year will be needed by 2050 to meet EU demand under the SAF blending mandate that underpins the initiative. With only 15 plants expected to be operational by 2027, over 10 plants will therefore be needed to be built in the EU each year thereafter to reach the 2050 requirement unless SAF is imported from outside the EU. However, in its assessment of targeted SAF volumes towards 2030, the scope of the ‘Fit for 55’ package, SkyNRG believes supply can match demand provided currently announced production capacity materialises and either additional production capacity is developed or SAF is imported. After 2030, fast deployment of new SAF technologies will be required up to 2050.

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The ReFuelEU Aviation proposal includes a 2% blending obligation on fuel suppliers for SAF in 2025, increasing to 5% in 2030 and then rising steeply to 32% by 2040 and 63% in 2050 (see article). A specific sub-mandate applies for e-kerosene (aviation e-fuels described by the Commission as synthetic aviation fuels), which starts with 0.7% in 2030, 8% by 2040 and increases to 28% by 2050.

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“Our in-depth analysis, ‘A Market Outlook on Sustainable Aviation Fuel’, finds that while the proposed mandates are ambitious, they can be mostly fulfilled with EU production capacity,” said Tom Berg, SkyNRG’s Policy & Sustainability Manager. “To meet the targeted volumes until 2030, however, there will be a heavy reliance on waste oils as feedstock via both the HEFA and co-processing technology pathways. After 2030, technological developments are required fulfil the mandated volumes up to 2050.”

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The majority of the announced plants until 2027 make use of waste oils and fats as feedstock, for which there is a tight European market and a reliance on the HVO/HEFA route until 2030.

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Due to constraints in the availability of renewable power for power-to-liquid (PtL) aviation fuels and restrictions on SAF obtainable from waste oils and fats, the major share of bio-advanced SAF will have to come from cellulosic waste and residue streams in the long run, using pathways such as gasification combined with Fischer-Tropsch (FT) and alcohol-to-jet (AtJ), says the SkyNRG report. It considers it unlikely that a large share of the EU renewable power supply would be allocated to e-kerosene production, with modelling elsewhere showing PtL SAF production consuming around 10% of the expected EU total by 2050. It acknowledges other studies foresee a more dominant role for PtL aviation fuels.

Although the ReFuelEU targets are ambitious, they are achievable “with the right set of enablers in place,” concludes the report, which include:

Increased support for new conversion pathways to convert sustainable feedstocks beyond just waste oils and fats, such as AtJ, FT or PtL;
Large-scale mobilisation of cellulosic feedstocks through new supply chains;
Rapid renewable electricity deployment to produce PtL aviation fuels in a sustainable way;
A solid, science-based sustainability framework to drive the transition; and
Corporate climate commitments as important streams of revenue to bring new SAF capacity online.

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The European Commission has opened an eight-week public feedback consultation on the ReFuelEU Aviation legislative proposals, which runs until 14 September 2021. READ MORE

European Commission’s ReFuelEU Aviation proposal details SAF blending obligation on fuel suppliers (GreenAir Online)

Excerpt from GreenAir Online: Two aspects of the mandate are notable. Firstly, the obligation is placed on the fuel suppliers rather than the airlines and, consequently, all flights departing from EU airports will be covered. Secondly, the mandate is based on volume rather than the potential carbon intensity reduction of the SAF.

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In addition to the obligation on fuel suppliers, a ‘refuelling obligation’ is placed on airlines, providing that “the yearly quantity of aviation fuel uplifted by a given aircraft operator at a given Union airport shall be at least 90% of the yearly aviation fuel required.” This is designed to address fuel tankering practices, where aircraft operators uplift more aviation fuel than necessary at a given airport with the aim to avoid refuelling partially or fully at a destination airport where aviation fuel is more expensive. This practice can lead to increased emissions (carbon leakage) due to higher fuel burn and undermines fair competition in the market. As the inclusion of SAF is expected to increase aviation fuel costs, the proposal anticipates fuel tankering may increase. Therefore, the regulation requires that the amount of fuel uplifted by an aircraft should be commensurate with the amount of fuel necessary to operate the flights departing from that airport. Monitoring of this provision will be carried out through reporting obligations on airlines.

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The proposed regulation does not include provision for a book-and-claim system, although it is not excluded as a future possibility, provided that it be governed by robust rules ensuring the environmental integrity of the system.

Eligible SAFs under the regulation are advanced biofuels and e-fuels, and feed and food crop-based biofuels are not included. However, SAF produced from waste lipids will be eligible in order to launch the market and allow for emission reductions in the short term. Sustainability criteria established in the Renewable Energy Directive (RED II) will be used to determine eligibility of SAFs.

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On the eve of the release of the Commission’s proposal, the World Economic Forum’s Clean Skies for Tomorrow (CST) coalition published a report that seeks to address key consideration regarding the feasibility of a SAF blending mandate. Signatories to the report, Guidelines for a Sustainable Aviation Fuel Blending Mandate in Europe, include Airbus, Boeing, bp, Copenhagen Airport, Deutsche Post DHL Group, Groupe ADP, Heathrow Airport, International Airlines Group, KLM, Kuehne+Nagel, LanzaJet, LanzaTech, Neste, Norsk e-Fuel, Rolls-Royce, Royal Dutch Shell, Royal Schiphol Group, SkyNRG, Sunfire, Total Energies and Velocys.

While CST says the introduction of the mandate is essential to the deployment of SAF, it is considered insufficient to unlock investments in the SAF supply chain. The CST report states that reaching the desired levels of SAF production in Europe will also require significant public financial support to de-risk private investments in the SAF supply chain and to bridge the cost differential between SAF and conventional jet fuel for off-takers.

In parallel, CST also believes airlines will need financial support mechanisms to bridge the cost differential between SAF and conventional jet fuel and to mitigate the risks of competitive distortion and fuel tankering that could be caused by the mandate. CST supports a volumetric mandate as it would provide greater certainty than a GHG intensity reduction target but believes the volumetric mandate should be combined with minimum threshold requirements for GHG reductions based on life cycle assessments that should be gradually increased over time.

Although the proposed regulation provides for a sub-target for e-kerosene, CST indicates sub-targets should also be implemented for other novel technology pathways at low technology readiness levels. In addition, CST calls for aviation to be given priority access to sustainable biomass due to the lack of cost-effective alternative decarbonisation options. Appropriate policies should also be in place to drive higher production/collection of sustainable biomass, in particular wastes and residues, to meet growing demand and prevent any feedstock availability issues. READ MORE