What is SAF?
SAFs are renewable fuels that can be derived from biomass (biofuels) or by combining green hydrogen and carbon (e-kerosene).
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SAFs are renewable fuels that can be derived from biomass (biofuels) or by combining green hydrogen and carbon (e-kerosene).
Despite its numerous benefits, SAF accounted for less than 0.2% of total jet fuel consumption in 2023.
SAFs are renewable fuels that can be derived from biomass (biofuels) or by combining green hydrogen and carbon (e-kerosene). They are key to reducing the climate impact of aviation, as they can significantly reduce greenhouse gas emissions compared to fossil jet fuel while also leading to cleaner air by emitting fewer ultrafine particles. Moreover, SAF can already be blended with conventional jet fuel up to 50% in modern aeroplanes. Despite its numerous benefits, SAF accounted for less than 0.2% of total jet fuel consumption in 2023.
However, contrary to their name, not all SAFs are equally sustainable. E-kerosene, if produced with additional renewable electricity and CO2 captured from the atmosphere, has the potential to be CO2 neutral with a great scalability potential. As for biofuels, their sustainability is more questionable due to limited scalability, competing uses and fraud risks.
E-kerosene is the most sustainable and scalable alternative fuel.
There are different types of biofuels:
Biofuels derived from food and feed crops: by far the least sustainable type of SAF, they can even be a cure worse than the disease, as their production drives deforestation and competes with food supply. They cannot be used to comply with the EU’s SAF mandate.
Biofuels derived from waste oils and fats: typically used cooking oils (UCOs) and animal fats. Locally collected waste oils can be a sustainable feedstock for biofuels production but available volumes will remain limited. There are high concerns in Europe over an increased reliance on fraudulent imports of waste oils from Asia.
Advanced biofuels derived from non-oily residues: like agricultural and forestry residues, or municipal solid waste. Because of existing uses and uncertainties around their actual emission savings, agricultural and forestry residues are not fully sustainable feedstocks.
Other types of alternative fuels:
Recycled carbon fuels are produced from fossil wastes, such as non recyclable plastics or industrial flue gases. Given efforts to increase recycling and to reduce waste, the sustainability of some of these fuels is questionable.
E-kerosene is produced by combining renewable hydrogen and carbon. The production of renewable hydrogen requires a significant amount of renewable electricity, which should be met by investments in new facilities in order not to compete with the direct electrification of other sectors. CO2 can be captured from concentrated sources like the flue gas of industrial facilities, or preferably directly from the atmosphere. Unlike biofuels, e-kerosene can be sustainably scaled-up to meet the energy needs of the aviation sector.
Based on the ranked airlines’ offtake agreements and memorandums of understanding, their global average 2030 SAF share is projected to reach 1.2%, with significant differences depending on where the airlines are based.
In 2023, the airlines in the ranking consumed more than 1.6 billion barrels of fossil kerosene, compared to only 2.6 million barrels of SAF. SAF made up less than 0.15% of their jet fuel consumption. Based on their current offtake agreements and memorandums of understanding, their global average SAF share is projected to reach 1.2% in 2030, with significant differences depending on where the airlines are based. For instance, the North American airlines are expected to use 2.7% SAF in 2030, while the European airlines are expected to use 1.3% SAF. However, airlines operating flights departing from the EU and the UK will arguably have a higher SAF uptake in the coming years because of national SAF mandates.
Yet, looking only at volumes rather than SAF quality can be misleading. Projected volumes of SAF will only lead to a 0.9% CO2eq emissions reduction of the airlines in the tracker in 2030. This is not even enough to compensate for the sector’s emissions growth. Despite lower SAF volumes, European airlines are expected to achieve higher emissions reductions in 2030 (2.2%) than North American airlines (1.1%). This is notably due to the higher sustainability of the SAF that European airlines are committing to, driven by legislation not allowing the use of unsustainable crop-based SAF.
Major oil companies are virtually absent from the e-kerosene market: they have virtually no plans to produce it, as fossil fuels remain their core business.
Oil companies are incumbent players in the jet fuel market supply and production. Given the development of frameworks mandating or incentivising SAF uptake, one would expect that their incumbent position would also be reflected in the SAF market. Yet, despite their dominant market position and financial resources, big oil companies are lagging in SAF production, especially e-kerosene, and in offtake agreements. Shell recently withdrew from an e-kerosene project, reflecting the industry’s reluctance to shift to clean fuels, while continuing to prioritise fossil fuel investments.
As shown by the two charts below, major oil companies are virtually absent from the e-kerosene market: they have virtually no plans to produce it, as fossil fuels remain their core business.