IATA: SAF production will triple in 2024; further enhances are essential

SAF will provide about two thirds of mitigation for airlines to achieve net zero

It is accepted that SAF will provide about two thirds of the mitigation needed for airlines to achieve net zero carbon emissions by 2050. The expected tripling of SAF production in 2024 from 2023 is "encouraging," says Willie Walsh, IATA's Director General, but the industry still has a long way to go.

Positively, this does show that the direction of exponential increases in SAF production is starting to come into focus", notes Mr Walsh.

Increasing production of renewable fuel is key to increasing potential of SAF

Renewable fuel production is shared by many industries, and SAF is a part of renewable fuel production. That is why increasing the production of renewable fuel is key to increasing the potential of SAF.

IATA says some 140 renewable fuel projects with the capability to produce SAF have been announced to be in production by 2030. If all of these proceed to production as announced, total renewable fuel production capacity could reach 51 million tonnes by 2030, according to its estimates, with production capacity spread across almost all regions.

Renewable fuel production potential could exceed this estimate as investor interest in SAF grows

With a typical three to five year time lag from planning to production, investment announcements as late as 2027 could be in production by 2030, notes IATA. At the same time, it is also clear that not all announcements reach final investment decisions - it warns.

Through the International Civil Aviation Organization (ICAO), governments set an ambition to achieve a 5% CO2 emissions reduction for international aviation from SAF by 2030. To achieve that ambition, around 27% of all expected renewable fuel production capacity available in 2030 would need to be SAF, says IATA. Currently, SAF accounts for just 3% of all renewable fuel production.

"The interest in SAF is growing and there is plenty of potential," says Mr Walsh, "but the concrete plans that we have seen so far are far from sufficient".

Governments have set clear expectations for aviation to achieve a 5% CO2 emissions reduction through SAF by 2030 and for there to be net zero carbon emissions by 2050.

"They now need to implement policies to ensure that airlines can actually purchase SAF in the required quantities", says Mr Walsh.

Several potential policy measures to boost SAF production

There are several potential solutions to accelerate aviation's access to critical SAF quantities:

• Diversify feedstocks: About 80% of SAF expected to be produced over the next five years is likely to come from hydrogenated fatty acids (HEFA): used cooking oils, animal fats, etc. Accelerating the use of other certified pathways and feedstocks (including agricultural and forestry residues and municipal waste) will "greatly expand the potential for SAF production," says IATA.
• Co-processing: Existing refineries can be used to co-process up to 5% of approved renewable feedstocks alongside the crude oil streams. This solution "can be implemented quickly" and "materially expand" SAF production, says IATA, however, policies must be put in place "urgently" to "facilitate consistent life-cycle assessments", it says.
• Incentives to improve the output mix at renewable fuel facilities: The current renewable fuel facilities are designed to maximise diesel production and often benefit from incentives in addition to the long-standing demand from road transportation. As road transport transitions to electrification, IATA says policies should be established "to shift production toward the long-term need of air transport for SAF". Incentives aimed at SAF can help facilitate the renewable diesel-SAF switch, which requires minimal modifications at existing stand-alone renewable fuel facilities, it adds.
• Incentives to boost investments in renewable fuel production: The production of all renewable fuels will need to scale up rapidly, and among them, the need for a growing share of SAF production will necessitate strong policy support. One such clearly articulated policy is the US Grand Challenge and the USD3 billion of investments it supports, says IATA. Stable, long term tax credits would further maximise SAF production capability in both existing and new facilities, it says.

No one policy or strategy will deliver needed levels

Incentives to build more renewable energy facilities, strengthen the feedstock supply chain, and to allocate a greater portion of renewable fuel output to aviation will certainly help decarbonising aviation.

"Governments can also facilitate technical solutions with accelerated approvals for diverse feedstocks and production methodologies[,] as well as co-processing renewable feedstocks in crude oil plants", says Mr Walsh.

No one policy or strategy will get the industry to the needed levels, but by using a combination of all potential policy measures, will mean producing sufficient quantities of SAF is "absolutely possible", says Mr Walsh.

Sustainability and environmental initiatives - where is progress being made?

Progress towards greater sustainability is now a major driver of airline strategy, whether it's facing customers, suppliers or regulators.

Airlines have ambitious climate goals and are pursuing a multi-pronged approach to achieving them.

Yet, the industry's credibility around sustainability remains marginal in the eyes of many - how the industry will achieve its sustainability targets, and whether it can afford the cost of doing so, are still open questions.

This was discussed at CAPA - Centre for Aviation's first Airline Leader Summit of 2024 in Granada, Spain in Mar-2024 where Airbus, SVP Sustainability Roadmap and Business Integration, Andreas Hermann; IAG, Group Head of Sustainability, Jonathon Counsell; Neste Renewable Aviation, VP Renewable Aviation Business, Alexander Kueper; and KLM, SVP Strategy & Sustainability, Zita Schellekens, shared their views.

Environmental sustainability and the path towards net zero

The air travel industry has embraced major sustainability targets in the past few years, but now comes the difficult and delicate task of meeting these ambitions while also remaining financially viable.

Industry discussions were continued at CAPA - Centre for Aviation's second Airline Leader Summit of 2024 in Calgary, Canada in May-2024, where WestJet, Chief People, Corporate & Sustainability Officer, Angela Avery; Neste, SVP Renewable Products, Carrie Song; Harbour Air, Head of Customer Experience & Sustainability, Suzanne Bremski; and Air Canada, Head of IR & Corporate Sustainability, Valérie Durand, shared their views.