Two SAF technology companies, UK-based Velocys and Singapore-based FlyORO, have secured significant investment funding for their respective ventures. Velocys ran into funding problems late last year when an anticipated $15 million investment was withdrawn after the company failed to secure further investment from other backers. Since then a consortium of four climate-focused investment houses based in London, New York and Singapore has acquired publicly traded Velocys for £4.1 million ($5.2m) and the company was taken private on January 18. The consortium has now injected $40 million of growth capital into Velocys. Meanwhile, Singapore-based SAF blending technology startup FlyORO has secured funding of $1.6 million after successfully closing a pre-Series A round led by venture capital firm Audacy Ventures, with participation from Asia-Pacific venture capital firm Investible and other private investors.

The new ownership consortium of Velocys which comprises Carbon Direct Capital, Lightrock, GenZero and Kibo Investments, has the combined expertise, networks and specialist scaling support that will better equip Velocys to contribute meaningfully to the decarbonisation of the aviation industry, said the company.

“The deal secures the future of Velocys, our pioneering technology and our industry leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry,” commented Henrik Wareborn, who continues in his role as CEO of Velocys. “For the past twenty years Velocys has had a critical role in the development of reactors, technology and processes that enable the efficient production of lower carbon SAF, and we and our new partners are excited to see what the next twenty will bring.”

The company says its patented catalyst and micro-channel reactor platform provides a scalable, flexible solution suitable for projects that produce SAF, and that its Fischer-Tropsch technology is compatible with multiple project types employing diverse feedstocks, including municipal solid waste, woody biomass and CO2 and green hydrogen.

“Decarbonising the global aviation industry will require innovative solutions that can be adopted with ease and at scale,” said May Liew, Investment Director at GenZero, an investment platform company that is focused on technology- and nature-based decarbonisation solutions, and founded in 2022 by Singapore global investment company Temasek, which has a net portfolio valued at over $280 billion. “This is where Velocys’ pioneering Fischer-Tropsch reactor is relevant, with its modularity and efficiency to support the development of advanced biofuel applications.”

Josh Dienstag, Chief Investment Officer of New York-based Carbon Direct Capital, added: “Velocys is a scarce supplier with the technology-readiness, production capacity and leadership team to deliver for SAF project partners. We are pleased to be part of this investor consortium and to support Henrik and the Velocys team.”

Velocys is partnering with British Airways on the Altalto Immingham project that aims to build a commercial scale plant in north-east England that will process municipal and commercial solid waste to produce 20 million gallons per year of sustainable aviation fuel for the airline. The project received a grant award of up to £27 million ($34m) from the UK’s Department for Transport in 2022 to support completion of the Front End Engineering Design of the facility over the period from December 2022 to March 2025. In a project update in May last year, Velocys expected construction to begin in 2025, with SAF production starting in 2028.

The company also has activities in the United States, which are mainly focused on its proposed facility, Bayou Fuels, located in Mississippi, that is aiming to produce 36 million gallons per year of negative-emission transportation fuels using a combination of biogenic feedstock, biomass power and carbon capture and sequestration. Long-term offtake agreements have been established with Southwest Airlines and British Airways’ parent IAG. Last October, the company launched a new technology facility in Plain City, Ohio, that will house the reactor core assembly and catalysis operations.

Singapore-based FlyORO’s technology is based around a flexible, modular SAF blending system, called AlphaLite, situated at airports that can supply blended SAF to airlines and business aircraft operators on demand and even at late notice. The 40-foot AlphaLite module has a blending capacity of 20 kilolitres for any approved SAF technological pathway, with each blending cycle requiring just 20 to 30 minutes. This, says the company, enables a total throughput of 960,000 litres of SAF output daily, capable of serving at least 12 long-haul flights from Singapore to London each day. The modular infrastructure can be scaled up by deploying more units.

AlphaLite is backed by the company’s proprietary programming technology, which receives a regular update once every six months to increase the efficiency of its operations.

The pay-per-use service, with a tiered blending fee per litre consumed, lowers the barrier for airport fuel operators to get on board while offering additional values of control and flexibility to their airline customers, says FlyORO.

The first AlphaLite unit is now located at Jet Aviation’s fixed-base operations at Seletar Airport in Singapore, where Jet Aviation is offering SAF options to business aviation customers.

“AlphaLite empowers aircraft operators to make better informed decisions regarding SAF adoption, considering factors from cost parity to feedstock quality,” said FlyORO.

The proceeds from the pre-Series A round will be used to accelerate ongoing projects and support international expansion efforts, said FlyORO, with an initial focus on strategic initiatives in both the Australian and United States markets. The company is looking to take advantage of the SAF opportunities and incentives available in the US and target the high number of airports and private aircraft ownership.

Investor Audacy Ventures says it has already made a number of strategic SAF investments including a collaborative Australian alcohol-to-jet venture with Qantas, Airbus and LanzaJet.

“SAF plays an essential role in our global efforts to decarbonise the aviation industry,” said Toby Chan, co-founder and Partner of Hong Kong-based Audacy Ventures. “We are excited to back the FlyORO team to be an innovative enabler to the SAF supply chain and assist in scaling their modular on-demand blending solution internationally.”

Last year was pivotal for us, said FlyORO CEO Jonathan Yeo. “We launched with Jet Aviation as our SAF partner for the Singapore market in April and in just seven months we are going beyond our borders much earlier than expected. Through our fundraising journey, we have been extremely meticulous in partnering with the appropriate strategic stakeholders.”

Top image: Velocys’ proposed Altalto Immingham waste-to-jet fuel facility

Bottom photo: The FlyORO AlphaLite modular SAF blending system

Christopher Surgenor

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The board of directors of Oxford, UK-based Velocys has given its backing to an offer from a consortium of US, UK and Singapore climate-focused investment houses to acquire the company. Without an immediate injection of funds, Velocys is in danger of running out of cash next month and going into insolvency, warned the company. A spin-out from the University of Oxford, Velocys has been developing technology to enable production of drop-in sustainable aviation fuels from a variety of waste materials and is involved in two projects in the UK and US to build commercial-scale SAF production plants. Listed on the London Stock Exchange, Velocys shares have fallen from a high of £5.80 a share during the past year to 0.23 pence, valuing the company at just under £4 million. The consortium, which is offering 0.25 pence per share in cash and, if the bid is successful, a secured bridging loan of £3.5 million and growth capital of up to $40 million (£31.5m), said Velocys was well-positioned to capitalise on “a compelling market opportunity” for the production of SAF.

The consortium, which has set up a company, Madison Bidco, for the purposes of the acquisition, is made up of London-headquartered global private equity firm Lightrock; New-York based global growth investment firm Carbon Direct Capital; GenZero, an investment platform founded last year by Temasek, the global investment company owned by the Singapore government; and Kibo Investments, a Singapore-based private investment office focused on climate technology. Carbon Direct Capital had previously been expected to make a $15 million investment in Velocys but withdrew when the latter failed to secure further investment from other backers by the end of October.

In a market announcement, Philip Holland, the Chair of Velocys, commented: “The Velocys Board and management have spent a great deal of time and effort trying to secure significant long-term funding to grow the business and accelerate the delivery of its technology to clients. However, reflecting Velocys’ material funding requirements, business model and limited revenue together with the continued challenging public market environment, it has not been possible to raise sufficient funds. This has put the business in an extremely challenging position, with a very real prospect of not being able to continue as a going concern when we reach the end of our cash runway in early January.

“Bidco is offering the business a secure platform for future growth, alongside an injection of up to $40 million of growth capital, which is expected to ensure that Velocys has the capital resources needed to deliver against its medium-term strategic plans, including to scale up and grow and work towards its long-stated goal of supporting the decarbonisation of the global aviation sector. Whilst it is very disappointing for the business to need to leave the public markets, Bidco’s offer will enable Velocys to continue operating as a going concern.”

The consortium’s confidence in SAF production is based on what the market announcement describes as a “confluence of regulatory support, demand pull by airlines and increased technology readiness,“ adding “Velocys is well positioned to capitalise on these sector tailwinds, given its patented integrated Fischer-Tropsch reactor and catalysis solution and its pipeline of commercial licensing opportunities.”

Velocys said it has a number of third-party clients to whom it supplies its technology, along with its two biorefinery reference projects, the Bayou Fuels Project in Mississippi that would utilise woody waste to produce sustainable fuels and the Altalto Project in Immingham, north-east England, that would process municipal and commercial solid waste into sustainable fuels.

According to the Velocys website, Bayou Fuels is expected to produce 36 million gallons per year of negative-emission transportation fuels using a combination of biogenic feedstock, biomass power and carbon capture and sequestration. Long-term SAF offtake agreements have been signed with Southwest Airlines (15 years) and IAG/British Airways (10 years). In October 2022, the company announced that when the project entered production, then forecast for 2026, the facility would use renewable energy derived from sustainable biomass power instead of solar power that would double the carbon savings for its aviation customers and the enhanced negative carbon intensity would also increase the credits generated under the US Inflation Reduction Act and the California Low Carbon Fuel Standard, improving the revenue and economic profile of the project.

A year ago, the Altalto project, a collaboration with British Airways to produce 20 million gallons of sustainable fuels annually with net negative carbon emissions, was awarded up to £27 million ($34m) in grant funding, with an initial tranche of £7 million from the UK Department for Transport, along with matched private funding, towards completing the Front-End Engineering Design stage. “Following completion of FEED and a successful final investment decision, construction will commence in 2025 with full commercial operation expected in 2028,” the company announced in May. The UK government has set a target of five SAF production facilities to be under construction in the UK by 2025.

Image (Velocys): Visualisation of the proposed Altalto MSW-to-SAF facility in north-east England

Christopher Surgenor

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Australian-based global investment group Macquarie Asset Management (MAM) has announced a €175 million ($190m) investment in Amsterdam-based SkyNRG, an established global provider of sustainable aviation fuel. SkyNRG sources, blends and distributes SAF, and is developing production plants in the Netherlands and the US Pacific Northwest to help meet demand for the fuel. The company has secured partnerships with key aviation companies including KLM Royal Dutch Airlines and Boeing, and has “envisaged long-term commitments” in SAF deals valued at up to €4 billion. While SkyNRG has secured significant backing from a major investor, two major start-up waste-to-SAF producers, Fulcrum BioEnergy and Velocys, are said to be facing financial challenges as they develop their respective projects. Reports in the US say Fulcrum, which started operations at its Sierra commercial-scale facility in Nevada in May last year, has failed to make bond repayments, while Velocys said an expected $15 million US investment has fallen through.

Managing nearly $600 billion in assets globally, MAM’s investment in SkyNRG marks its first in sustainable aviation fuels. “We have a track record for backing businesses working at the forefront of energy transition,” said Mark Dooley, Global Head of MAM Green Investments. “This is an exciting milestone for us. SkyNRG has been a pioneer in SAF, with an entrepreneurial spirit and a strong commercial focus. We look forward to collaborating with the SkyNRG team as they grow their business and advance solutions to decarbonise the aviation industry.”

Since its establishment 14 years ago, SkyNRG has been a leading supplier of SAF and a prominent advocate of global government support to provide incentives or mandates for production and use of the low-carbon fuels. In 2011, the world’s first commercial flight using SAF was supplied by SkyNRG, which has since expanded into research and development, SAF sales, and advisory services.

Announcing the initial stake from Macquarie’s GIG (Green Investment Group) Energy Transition Solutions (MGETS) Fund, the two companies said the SAF sector was benefiting from “significant tailwinds” including voluntary corporate offtake commitments in support of their net zero emission targets, as well as increasing political and regulatory support, including Europe’s ReFuelEU mandate that requires escalating use of SAF, and the Biden Administration’s SAF Grand Challenge and Inflation Reduction Act, which respectively set steep targets and offer strong incentives for the use of SAF.

SkyNRG estimates that by 2050, the airline sector’s target year for net zero carbon emissions, incentives to use SAF will create demand for up to €650 billion ($700bn) of investment in the sector.

“It is critical that SAF production capacity is developed now to enable the aviation industry to meet its net zero goals,” said SkyNRG CEO Philippe Lacamp. “We are very proud that Macquarie has made this strategic investment in our business, and we are confident that they, with the ongoing support of our existing shareholders, will provide us with the resources and expertise we need to accelerate our growth journey towards becoming a major player in the SAF industry.”

Initially, SkyNRG is planning to establish three production plants – Europe’s first dedicated SAF facility in Delfzijl, Netherlands, in partnership with Shell, KLM and SHV Energy, the SynKero synthetic fuel plant in the Port of Amsterdam, and a facility in the Pacific Northwest of the USA, with partners including Boeing.

The Delfzijl and Amsterdam facilities are each targeting annual production of 100,000 tonnes of SAF, while the US plant is aiming for 90,000 tonnes per year. Delfzijl will also produce over 35,000 tonnes of sustainable by-products per year, including LPG and naphtha, while the Pacific Northwest plant will specifically service key US west coast markets supported by Low Carbon Fuel Standard policies. The SynKero facility will produce eFuels from captured CO2 and green hydrogen, and have the added benefit of access to an existing fuel pipeline to Amsterdam’s Schiphol Airport.

Macquarie Asset Management has set a target of net zero emissions by 2040 and manages its investments in line with that commitment. In its recently released 2023 Sustainability Report, Macquarie highlights the switch of global investment managers to more sustainable portfolios and warned that carbon-intensive businesses would struggle to progress. “From our experience,” said Macquarie, “carbon-intensive assets are becoming more expensive to insure, harder to finance, more challenging to recruit top talent to and ultimately have a more limited set of future buyers.”

Ben Way, Group Head of Macquarie Asset Management, added: “In most cases, the energy transition is creating significant opportunities for businesses to preserve and create value. Those who aren’t adapting or evolving risk being left behind.

“Global investment in the energy transition exceeded US$1 trillion for the first time in 2022 and investment in new renewable energy supply now surpasses investment in fossil fuels. We are seeing a significant acceleration in change across all sectors and geographies.

“Supported by the economics of green technologies and bolstered by transformative policy initiatives, we believe the energy transition will lead to even greater investment opportunities for our clients.”

Meanwhile, in a market statement, Velocys said a planned $15 million investment from New York-based Carbon Direct Capital would not go ahead after it failed to secure $40 million from other backers by a target date of the end of October. The company’s proposed Altalto Immingham SAF facility in north-east England received £27 million ($33m) from the UK government’s Advanced Fuels Fund late last year.

Last month, Velocys launched its new technology facility in Plain City, Ohio, which will house the reactor core assembly and catalysis operations that form a critical part of the company’s SAF production process. It is expected the facility will have sufficient production capacity to meet projected orders until 2028, including those from Altalto Immingham and its other biorefinery project, Bayou Fuels in Mississippi.

“The completion of this state-of-the-art facility is a real milestone both for Velocys and for the move to decarbonise the aviation industry,” said CEO Henrik Wareborn. “To move from planning permission to completion in two years is a testament to all those involved and takes us a big step closer to enable our clients to produce SAF with ultra-low carbon intensity at commercial scale.”

Another pioneer of converting municipal solid waste to jet fuel at commercial scale, California-based Fulcrum BioEnergy, is said to have missed repayments on bond financing tied to its Sierra BioFuels Plant & Feedstock Processing Facility in Nevada. According to documents, the company must work with trustee UMB Bank to come up with an alternative financing agreement. Plans for a new SAF facility in Gary, Indiana are reported to be on hold. The company has so far made no comment.

Equity partners in Fulcrum include BP, Japan Airlines, Cathay Pacific Airways and United Airlines. Like Velocys, Fulcrum BioEnergy’s UK subsidiary received a grant of £16.8 million ($20 million) from the Advanced Fuels Fund to support the development of the Fulcrum NorthPoint facility in north-west England.

Photo: Shell/SkyNRG/KLM

Tony Harrington

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Additional reporting by Christopher Surgenor

The United Kingdom government has opened the second application round of its £165 million ($205m) Advanced Fuels Fund that provides financial support for the construction of sustainable aviation fuel plants in the country. The grant funding is to be provided to first-of-a-kind commercial and demonstration scale projects at all development stages up to the start of construction. In the first round, five projects – Alfanar Energy (Lighthouse Green Fuels), LanzaTech UK (DRAGON), Fulcrum BioEnergy (NorthPoint) and Velocys (Altalto and e-Alto) – received funding totalling £82.3 million. The government is aiming to have five plants under construction by 2025 to help meet its proposed 10% mandate for SAF use by 2030. It has also launched a second consultation on the mandate, running until June 22, which sets out how the mandate will deliver carbon savings, provide incentives to SAF producers and encourage potential SAF investors. The government has also confirmed the University of Sheffield will deliver the first UK Clearing House to support the testing and certification of new SAF.

Announcing the moves, Aviation Minister Baroness Vere said: “This renewed support for sustainable aviation fuel is another step towards making Jet Zero a reality. Developing a UK SAF industry will not only put the country at the heart of green aviation worldwide, but also boost investment, jobs and fuel security in the UK.”

The government points to research indicating that by 2035, the UK SAF sector could generate a gross value added (GVA) of up to £742 million ($924m) annually and support up to 5,200 jobs, with a potential of a further 13,600 jobs from the growing SAF market through global exports. In addition, UK manufactured fuels could deliver a £550 million ($680m) per year benefit to the nation’s balance of payments and increase fuel security.

Selected projects in the Advanced Fuels Fund competition, which is being delivered with the support of Ricardo and E4Tech, are required to demonstrate their potential to produce SAF capable of reducing emissions by more than 70% on a lifecycle basis when used in place of conventional fossil jet fuel. As part of support for a diverse range of technologies that utilise a range of sustainable feedstocks, the fund will reserve a new ‘sub-pot’ of funding for the second window to support projects that use CO2 – either point source or direct air capture – as their main carbon source in fuel production. Projects that rely on crop feedstocks or used cooking oil are excluded from the competition. Announcement of the winners and start of the funding period for the second window is expected in September this year.

The purpose of the new SAF Mandate consultation is to seek views on:

• Overarching targets to be set for 2030 and beyond;
• Targets to supply power-to-liquid fuels and a cap on HEFA pathway fuels;
• A potential buy-out price, which determines the maximum incentive for supplying SAF;
• Eligible fuels and sustainability criteria;
• Design of the scheme including who the obligation applies to and how certificates will be issued, traded and used for compliance, and how the obligation will be discharged;
• The administrator and enforcement of the scheme; and
• Interactions with other domestic and international policymakers.

The UK’s commitment to net zero by 2050 requires a rapid decarbonisation of the economy, namely a 68% reduction in GHG emissions by 2030 and a 75% reduction by 2035 from 1990 levels, including international aviation and shipping emissions. Given the level of uncertainty surrounding alternative solutions to decarbonising aviation, SAF is seen as one of the key levers in the transition, along with the co-benefit it brings in reducing sulphur dioxide and particulate matter emissions, and potentially other non-CO2 impacts, including contrails.

The government says the long-term obligation provided by a SAF mandate can generate demand for SAF, provide an incentive to SAF producers (in the form of  tradeable credit) and signal to investors the vital role the technology will play in the UK. It recognises that SAF production relies on technology that is yet to be proven at scale, leading to high initial capital and operating costs and uncertainty on return on investment.

“Without a long-term regulatory and policy framework in place to support industry and provide certainty, these factors act as barriers to an investable proposition for technology developers and investors. Consequently, production capacity will continue to be limited in the UK,” it acknowledges. “A SAF blending mandate will guarantee a level of SAF demand that provides more certainty to investors, and as a result will increase production level and drive emissions reductions. Early intervention and support in this market will drive the industry to move faster than it otherwise would.”

In the absence of an obligation on SAF, supply in the UK is assumed by the Department for Transport (DfT) in its Cost Benefit Analysis accompanying the consultation to be low, given the lack of demand certainty, apart from some incentive provided by the UK ETS and CORSIA for airlines to use SAF. Uptake on a business-as-usual basis is assumed to reach 2% of jet fuel demand by 2030 and 10% by 2050.

Under the DfT’s central trajectory to 2040 (of three possible ambition options – low, central and high), the level of the mandate, as a proportion of UK aviation fuel use, begins at 2% in 2025, rising linearly to 10% in 2030. From there, it increases to 22% in 2040, on track for a 2050 ambition of 50%, in line with the ‘high ambition’ scenario from the government’s Jet Zero Strategy.

However, says the DfT, there are “substantial risks” around all of the considered options if there are insufficient feedstocks available to produce the required SAF, either domestically or via imports. “In all three trajectories, we do not expect all SAF claimed under the mandate to be produced domestically,” it says, noting that the UK currently imports 61% of its jet fuel.

The SAF mandate will place an obligation on suppliers of aviation fuel to demonstrate that a given proportion of fuel supplied is SAF, in line with the trajectories. Suppliers will receive credits for each tonne of SAF supplied, which will vary based on the GHG abatement each fuel provides relative to a baseline abatement of 70% compared to standard jet kerosene. Suppliers can meet their obligation in three ways:

• The obligation can be met entirely through the supply of SAF.
• Fuel suppliers who exceed their obligation can sell excess credits to those suppliers who do not meet their obligation.
• Suppliers can buy out of their obligation by paying a fixed sum per credit of fuel not supplied.

The buy-out price is proposed as a core part of the mandate policy, to incentivise compliance with the mandate whilst also serving as a price cap on the cost to industry and consumers where the supply of SAF is not possible or too costly. Setting the buy-out price at the correct level is critical to ensure compliance with the mandate, says the DfT. If set too low then suppliers may choose to buy out instead of supplying SAF but if too high, any supplier unable to meet their obligation through the supply of SAF will face a large cost burden that in turn would place an undue financial strain on industry and, by extension, consumers.

The buy-out price can be calculated, says the DfT, as the cost per credit of the most expensive SAF pathway less the cost to supply kerosene. “Using the most expensive fuel pathway will ensure SAF fuel suppliers will be fully incentivised to meet the obligation,” it says, and is suggesting a buy-out price of £2/litre, or £2,657 per tonne.

A separate mandate for power-to-liquid (PtL) fuels requires a separate buy-out price and as they are a more costly fuel type, a higher buy-out price is needed, with the DfT proposing a central buy-out price of £2.75/litre, or £3,525 per tonne.

The government proposes that civil penalties be imposed on an obligated supplier or account holder applying for certificates if they fail to meet certain criteria. It is seeking views and supporting analysis on whether a minimum fuel uplift requirement on flights departing a UK airport should be introduced to discourage airlines from taking on extra fuel for inbound flights to avoid having to refuel in the UK for cost reasons, a practice known as tankering.

The DfT expects airlines will pass on at least some of the SAF purchasing costs to consumers in the form of increased ticket prices. The actual ticket price impacts of the SAF mandate policy will depend in part on the options chosen relating to the trajectory, buy-out price, HEFA cap and PtL target.

“As this consultation does not set out a preferred option on these elements, we are not able to set out central estimates of the ticket price impacts at this stage but hope to do so alongside the government response to the consultation,” says the DfT. “Impact on ticket prices will be an important factor when making decisions about the SAF mandate.”

In the short term, the DfT is expecting SAF production to be heavily focused in the developed nations but in the medium to long term, nations with cheaper access to renewable energy and currently un-utilised feedstocks will be a key part of the international SAF mix and global SAF production will ramp up quickly. Around 8 million litres of SAF were produced and used globally in 2016, compared to 300 million litres in 2022 and an expected 5 billion litres (4 million tonnes) by 2025. The DfT estimates there are currently 41.6 billion litres (33 million tonnes) under offtake agreements, “giving planned plants higher levels of certainty in the future demand for their product.”

The UK’s first SAF Clearing House is due to open this summer and will be led by the Energy Institute at the University of Sheffield. It will be based across the university’s Sustainable Aviation Fuels Innovation Centre (SAF-IC) and Translational Energy Research Centre (TERC), where academics and industry will work together to develop new low and zero-carbon fuels and technologies.

Any new aviation fuel must meet strict specifications before it can be certified as safe for use in aircraft and must undergo stages of testing against a process to meet the required ASTM standard. The cost of this testing is a significant barrier to new fuels entering the market and the Clearing House will give advice to fuel producers on testing, provide assistance with testing facilities and facilitate fuel certification.

“This significant and much-needed addition to the UK’s decarbonisation landscape will help to reduce barriers to SAF delivery and will take a vital step on the journey to make SAF a viable solution for the future of aviation,” commented Professor Mohamed Pourkashanian, Head of the Energy Institute.

“With our world-class sustainable aviation fuels research and testing facilities at SAF-IC, as well as the significant amount of sustainable power-to-liquids capabilities at the neighbouring TERC, we are ideally placed to drive forward the much-needed development, testing and delivery of SAF.”

Photo: Heathrow Airport

Christopher Surgenor

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Southwest Airlines has agreed to purchase over 400,000 carbon credits from SMBC Aviation Capital, the world’s second largest aircraft leasing company, to support the airline’s employee business and charitable travel, or to meet CORSIA requirements. As the first aircraft lessor to develop a carbon credit programme, SMBC Aviation Capital announced in September 2022 an initial investment of $53.3 million in projects that align with up to 10 of the 17 UN Sustainable Development Goals (SDGs), including good health and well-being, gender equality and climate action. Part of the investment will also support local community initiatives such as irrigation schemes and micro finance opportunities for women. Carbon credits can be obtained from the Ireland-based lessor by airlines either as part of an aircraft lease contract or independently. It has placed 12 Boeing 737-8 MAX aircraft with Southwest and is also collaborating with partners on scaling up sustainable aviation fuel production.

“Southwest continues to make sustainability a priority and we are delighted to partner with them as the first customer of our newly-established carbon credit programme,” commented David Swan, Chief Operations & Sustainability Officer at SMBC Aviation Capital. “This announcement supports our objective of working with our airline customers to accelerate their path to environmental sustainability. We believe that by taking tangible actions and working together we can make a positive change, especially in a hard-to-abate sector like aviation.”

Through Belgium-based CO2 Logic, SMBC Aviation Capital has invested in a project in Burkina Faso, West Africa, that will provide energy-efficient cookstoves to 28,000 families who have previously relied on traditional cooking methods that are harmful to health and the environment. According to the Clean Cooking Alliance, the use of open fires and solid fuels for cooking causes nearly 4 million premature deaths each year and, according to the US Environmental Protection Agency, the average open fire produces nearly as much CO2 as the average motor vehicle.

Separately, the lessor is working with US carbon project developer C-Quest Capital to forward purchase carbon credits from a range of cookstove projects across Africa, Asia and Central America, which aim to reach over 3.2 million households and meet a minimum of seven SDGs.

Due diligence across all projects has been independently undertaken by Climate Focus, which is based in the Netherlands.

Under the agreement with Southwest, the airline will be acquiring over a five-year timeframe carbon credits certified by either Gold Standard or Verra from SMBC Aviation Capital’s funded projects in Africa and Central America.

“We recognise the important roles that both in-sector and out-of-sector levers play in our sustainability journey,” said Chris Monroe, SVP Finance Treasury & Sustainability, Southwest Airlines. “Expanding our existing partnership with SMBC Aviation Capital supports these projects that are expected to help mitigate carbon while contributing positively to local communities.”

In October 2021, Southwest laid out a 10-year plan to maintain carbon neutrality to 2019 levels, which included the first US-based carbon offset initiative that offered customers loyalty points, and for every dollar contributed towards offsetting Southwest’s carbon emissions, the airline would match the contribution.

The plan also incorporated a target to reduce carbon emissions per available seat mile (including scope 1 and scope 2 emissions) by at least 20% by 2030 through fleet modernisation, route optimisation and other initiatives. The airline also plans to replace 10% of its total jet fuel consumption with sustainable aviation fuel by 2030.

Towards the end of 2021, Southwest signed a 15-year offtake agreement with Velocys Renewables for 219 million gallons of SAF, with deliveries commencing as early as 2026 from the Velocys Bayou Fuels facility in Natchez, Mississippi. The airline estimates the fuel could avoid 6.5 million tonnes of CO2 over the term of the agreement.

In June last year, Southwest announced an investment in SAFFiRE Renewables, a company formed by D3MAX, which in 2021 was awarded a grant by the US Department of Energy towards a pilot-scale facility. The grant is being matched by Southwest and the SAFFiRE project is expected to utilise technology developed by the DOE’s National Renewable Energy Laboratory to convert corn stover, a widely available waste feedstock in the US, into renewable ethanol that then would be upgraded into SAF. The investment and grant supports phase one of the project, which is expected to include technology validation, preliminary design and a business plan for a pilot plant.

“This is a unique opportunity to invest in what we believe could be game-changing technology that could facilitate the replacement of up to approximately 5% of our jet fuel with SAF by2030, with the potential to significantly continue to scale beyond the decade,” commented Southwest CEO Bob Jordan at the time of the announcement. “This first-of-its-kind investment is another step we are taking to address our environmental impact and it also supports our efforts to partner with organisations and government entities to help our industry reach the goal of carbon neutrality by 2050.”

SMBC Aviation Capital has an owned, managed and committed fleet of over 900 aircraft and is working to a target of up to 80% of new technology aircraft in its fleet by the end of 2025. It is working with shareholder Sumitomo Corporation to explore ways to increase the supply of SAF and is also collaborating with Aircraft Leasing Ireland on starting production of SAF in Ireland. It has developed its own framework to achieve net zero in its own operations by 2050 and has offset all of its operational emissions since 2019. Scope 3 emissions are determined by Fexco Group company PACE.

Image (Boeing): Southwest Airlines Boeing 737 MAX

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The UK government has revealed it expects the first-ever net zero transatlantic flight to take place as early as next year, with an aircraft to be powered solely by 100% sustainable aviation fuel. The announcement came during a visit to the US by Transport Secretary Grant Shapps, who during a meeting with airline executives invited the international sector to work closely with the government to deliver the demonstrator flight. The government says it is committed to drive forward the SAF industry, which had the potential to deliver significant carbon savings, improve domestic fuel security, support thousands of green jobs and put flying on a more sustainable path. It acknowledged that current jet fuel specifications do not allow flights to solely use 100% SAF but did not elaborate on how this would be overcome on the net zero flight beyond saying SAF use would need to be “complemented by additional decarbonisation measures to be fully net zero” and referenced greenhouse gas removals.

Currently one of the highest single emitters of greenhouse gases, the government said “aviation is one of our biggest challenges when it comes to making transport green, but the investment and innovations such as SAF are there to make guilt-free flying a reality.”

The new transatlantic initiative has resulted from the Jet Zero Council partnership between industry and government that aims to drive delivery of new technologies and innovative ways to cut aviation emissions, while supporting the UK economy. It is estimated a UK SAF industry could support up to 5,200 UK jobs directly, as well as a further 13,600 through global exports, with an annual turnover that could reach £2.3 billion ($2.8bn) by 2040.

“This trailblazing net zero emissions flight, a world first, will demonstrate the vital role that sustainable aviation fuel can play in decarbonising aviation in line with our ambitious net zero targets,” said Shapps. “That’s not just great news for the environment, it’s great news for passengers who will be able to visit the Big Apple without increasing damaging greenhouse gas emissions.”

The government said it was committed to accelerating the testing and approval of 100% SAF “to unlock the full decarbonisation potential of this technology.” It said delivering the transatlantic flight would help gather data needed to support ongoing and future work to test and certify SAF, “while exploring how engine efficiency improvements, flight optimisation and greenhouse gas removals can contribute to achieving net zero flights.”

Described as a “pioneering test flight”, the transatlantic initiative will be supported by up to £1 million of competition funding to help increase understanding of commercial flights using 100% SAF. It will be open to all airlines covering non-stop UK-US routes, “welcoming their collaboration with wider aviation and fuel stakeholders across the SAF supply chain.” After an initial expression of interest phase opening on May 14 and closing on June 12 2022, successful airlines will be invited to submit a full stage application, following which the funding will be made available competitively to support the testing, research and personnel costs of the initiative.

“This flight, driven through collaboration and bold ambition, is a perfect example of how innovation can and will shape our future lives,” said Indro Mukerjee, CEO of Innovate UK, which is running the competition with the Department for Transport. “It is only by working together that we will see the transformative change needed to deliver on the commitments to meet net zero.”

Aero engine manufacturer Rolls-Royce has been testing its large commercial engines on 100% SAF over the last year. “We have the technology to help the UK government achieve its objectives and we look forward to working closely with them to deliver this milestone transatlantic flight,” said Warren East, CEO of Rolls-Royce. “Just over 100 years ago, Rolls-Royce powered the first-ever transatlantic flight and now we have the innovation and expertise to power the next generation of sustainable aircraft.”

As well as the fuel specifications barrier, the government said it was working with industry on other challenges preventing a higher uptake of SAF, such as high fuel production costs, technology risk at commercial scale and feedstocks availability. It confirmed it was exploring a SAF mandate, supporting the UK SAF industry with £180 million ($220m) of funding over the next three years and establishing a fuel testing clearing house in the UK. In addition to the £180 million funding, £400 million of funding is being made available through a government partnership with Breakthrough Energy Catalyst to drive private sector investment into the next generation of green technologies, through which UK SAF projects can seek additional capital.

The government is aiming to confirm a SAF mandate, as well as specific targets, timescales and scheme design following a second consultation this year. At a fifth meeting of the Jet Zero Council last month, the government launched the Zero Emission Flight Delivery Group that is made up of aviation experts from across industry and government who will work together to realise zero emission flight.

“UK airlines strongly support the development of a UK SAF industry, which will play a vital role in helping our sector deliver net zero emissions by 2050, as we are committed to doing,” commented Tim Alderslade, Chief Executive of trade body Airlines UK, on the transatlantic initiative. “This announcement will provide additional momentum and, alongside the recent £180 million in Treasury support for the development of new UK SAF plants, demonstrates the commitment of government to making SAF a key part of the decarbonisation of aviation. We now need to turbocharge production in order to build the initial three SAF plants by 2025 and UK airlines have shown real commitment to making this happen with our partnerships with Phillips 66, Velocys and LanzaTech.

“We look forward to working with ministers through the Jet Zero Council to continue to explore mechanisms to attract the required private investment – in addition to a planned mandate – so we can help deliver the government’s 10% SAF uptake goal by 2030.”

Photo: Rolls-Royce

British Airways could be using sustainable aviation fuel produced in the UK within the next few months following an agreement with one of world’s biggest oil refiners, Phillips 66. It will be produced and blended at Phillips 66’s Humber Refinery in north-east England from waste cooking oils, and supplied to London airports via the existing pipeline infrastructure. The SAF is expected to reduce lifecycle emissions by over 80% compared to the traditional jet fuel it replaces. Phillips 66 has 13 refineries in the United States and Europe, with a global refining capacity of 2.2 million barrels of crude oil per day. It is transitioning to a low-carbon future and last year announced plans to convert its Rodeo refinery in California into the world’s largest renewable fuels plant. The Humber Refinery, which employs over 1,000 workers, started production of renewable diesel in 2018, becoming the first in the UK to convert waste oil into road fuel. In November 2020 it took delivery of a new processing unit to convert used cooking oil (UCO) into low-carbon fuel. The refinery is situated very close to the proposed Velocys facility that will convert municipal solid waste to jet fuel for British Airways.

The airline said the purchase agreement of 36,000 tonnes of SAF with Phillips 66 Limited, a wholly-owned UK subsidiary of Phillips 66, would reduce lifecycle emissions by almost 100,000 tonnes, the equivalent of powering 700 net zero CO2 emissions flights between London and New York on its Boeing 787 aircraft.

The Humber Refinery’s UCO module increased renewable diesel capacity this year to 3,000 barrels per day (BPD) from 1,000 BPD and the company plans to further expand capacity to 5,000 BPD by 2024.

Added a spokesperson for Phillips 66: “While the UCO module will be an important part of our SAF supply, we will also be producing SAF via other production pathways at the refinery.”

The refinery, which Phillips 66 says is one of the most complex in its portfolio and one of the most sophisticated in Europe, has a crude oil processing capacity of 221,000 BPD. It produces some 14 million litres of fuel per day, some of which is sold at its JET branded petrol stations and also jet fuel to airlines, as well as raw materials that can be transformed into a range of other products, including into essential components for electric vehicle batteries.

“The refinery was the first in the UK to co-process waste oils to produce renewable fuels and now we will be the first to produce SAF at scale, and we are delighted British Airways is our first UK customer,” said Humber Refinery General Manager Darren Cunningham. “We are currently refining almost half a million litres of sustainable waste feedstocks a day, and this agreement demonstrates our ability to supply them.”

The Humber Refinery is one of three investment partners in the Humber Zero project for large-scale decarbonisation in the immediate region and incorporates a cluster of local energy-intensive industries that make up more than 20% of the local economy and one in 10 jobs, and lie 1km from the North Sea coastline on the south bank of the River Humber. By 2030, Humber Zero aims to remove up to 8 MT/CO2 annually by integrating carbon capture and storage, alongside green and blue hydrogen production, into these existing, co-dependent industries. As well as decarbonising local industry, it is expected to provide hydrogen power for over one million local homes.

“This agreement with British Airways aligns with our strategy to create a refinery of the future, where we’re producing fuels from waste, being a critical part of the electric vehicle supply chain, reducing the carbon intensity of our processes through carbon capture and using hydrogen to power the refinery,” said Cunningham. “It secures long-term business in an ever-changing world.”

British Airways and Phillips 66 are members of the UK Department for Transport’s Jet Zero Council Delivery Group, with both supporting government plans for a future SAF blending mandate and a business model for investing in advanced waste-to-jet fuel projects.

“The UK has the resources and capabilities to be a global leader in the development of SAF and scaling up the production of SAF requires a truly collaborative approach between industry and government,” said British Airways Chief Executive Sean Doyle.

“We are excited to develop our relationship with Phillips 66 Limited further with a view to growing production capacity and using a wider range of sustainable waste feedstocks to supply our future flights. The development of SAF is a major focus for us and forms part of our commitment to achieving net zero carbon emissions by 2050 through a series of short, medium and long term initiatives.”

BA’s parent company IAG pledged two years ago to invest a total of $400 million on alternative sustainable fuel development over the following 20 years. Its Altalto Immingham project with Velocys aims to convert over 500,000 tonnes each year of non-recyclable household and commercial solid waste into sustainable aviation fuel, which would be supplied via the same pipeline as for the Phillips 66 fuel. According to an investor statement from Velocys last month, depending on progress of UK government policy and the project going ahead, commissioning and startup would commence in 2027, with full-scale commercial operation to follow that same year.

In February, British Airways announced it was to invest in SAF technology provider and SAF producer LanzaJet’s first commercial-scale Freedom Pines Fuels facility in Georgia, USA. The deal includes purchase of SAF to power a number of BA flights from the US from late 2022 and early-stage planning of a potential commercial-scale biorefinery in the UK. This would be produced using LanzaJet’s alcohol-to-jet process, which can use any source of sustainable ethanol, including, but not limited to, ethanol made from non-edible agricultural residues such as wheat straw and recycled pollution. LanzaJet, which is involved in three UK projects, and British Airways are also partnering with Nova Pangaea Technologies on ‘Project Speedbird’ to develop the first SAF facility in the UK to utilise woody residues from the UK, which aims to produce 100 million litres of SAF per year by 2025.

The purchase agreement with British Airways follows a Phillips 66 memorandum of understanding signing with Southwest Airlines in April this year “to advance the commercialisation of sustainable aviation fuel, focusing on public awareness and research and development.” The MoU also includes both sides exploring a future SAF supply agreement involving Phillips 66’s renewable fuels Rodeo Renewed project in California. The facility is expected to be capable of producing an initial 800 million gallons per year of renewable fuels and, subject to permits and approvals, could be completed in early 2024.

Photo: The Phillips 66 Humberside Refinery

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Two major industrial collaborations have been established in Japan to progress ambitions for large-scale production of sustainable aviation fuels (SAF) in the country, writes Tony Harrington. In the first project, sponsored by Japan’s Ministry of the Environment, six prominent corporations have joined forces to demonstrate the extraction of carbon dioxide from industrial exhaust gases, and its conversion into SAF as part of a broader plan to also drive regional revitalisation through carbon recycling. The second involving four major corporations, supported by the government’s New Energy and Industrial Technology Development Organisation (NEDO), will establish SAF commercial production by converting solid materials such as wood chips into fuel through a two-stage process of gasification and Fischer-Tropsch (FT) synthesis, following a recent successful trial by Japan Airlines of woody biomass fuel on a domestic flight. Meanwhile, an IBA report estimates fuel efficiency per seat/km on Japanese domestic flights has improved significantly, largely through deployment of next-generation aircraft.  

The CO2 recycling, or E-fuels project, brings together Toshiba Energy Systems and Solutions Corporation, Toyo Engineering Corporation, Toshiba Corporation, Idemitsu Kosan, Japan CCS and All Nippon Airways to establish and demonstrate a process to collect and separate CO2, then transform it into SAF. Subject to finalising a contract with Toyo, UK-based Velocys said its FT synthesis technology would be used to convert gas to SAF in the project. Velocys will also demonstrate the diversity of feedstocks such as sustainable waste and biomass that can be used in conjunction with the FT technology to create SAFs. The project is scheduled to commence this month and continue until the end of March 2025.

The parallel project to convert solid biomass to fuel will be undertaken by a consortium of Toyo Engineering Corporation, JERA, Mitsubishi Power and ITOCHU Corporation. Velocys said it would also partner with Toyo in this programme, again using FT technology and other processes to efficiently convert woody biomass into SAF.

Velocys CEO Henrik Wareborn said the two projects highlighted the increasing momentum of the sustainable aviation fuel market. “Velocys is well-positioned to deliver its proprietary FT technology to biorefinery projects that convert a range of renewable feedstocks into the low carbon sustainable fuel that airlines need to meet their carbon reduction goals, without having to make any adjustment to engines or fuelling systems,” he said.  

Japan has long been a leader in the development and use of SAFs in the Asia Pacific region, and the government is intent on establishing large-scale domestic SAF production by 2030. The two biggest airline groups, All Nippon Airways (ANA) and Japan Airlines (JAL), have both been continuously active for more than a decade in encouraging, testing and investing in alternative fuels, as part of their broader decarbonisation strategies.

Since 2009, when Japan Airlines performed Asia’s first proving flight using SAF manufactured from the non-edible crop camelina, the carrier has continued to test a variety of blends, and in 2018 even initiated a project to produce sustainable fuel based on cotton obtained from 250,000 discarded garments, the first time SAF was fully produced in Japan. In June this year, JAL became the first airline to use SAF developed from gasified wood chips, synthesised by the Velocys FT process. And together with two major Japanese partners, the airline has invested in US-based SAF manufacturer Fulcrum BioEnergy . 

ANA too has long been focused on decarbonising its operations and recently blended microalgae into the fuel on a domestic flight. It has also entered a global fuel offtake partnership with SAF provider LanzaTech and has partnered with Finland’s Neste to enable access to SAF developed from renewable waste and residue raw materials.

The complex stages of the CO2-to-SAF project have been divided between the six partners in the consortium, who will leverage their respective strengths as follows:

• Toshiba Energy Systems to build and demonstrate a full-scale carbon dioxide electrolysis unit prototype, and conduct a review for a Power-to-Chemicals (P2C) plant;
• Toyo Corporation to create plans for an FT synthesis plant and a P2C plant;
• Toshiba Corporation to demonstrate the CO2 technology;
• Idemitsu Kosan to investigate a SAF certification scheme and standards, and create the basic plan for a SAF blending facility and quality control;
• Japan CCS to study the P2C demonstration plant site and regional cooperation plan; and
• ANA to conduct a study of the SAF market and fuel supply at airports.

For the second project, Toyo Engineering Corporation said it would undertake basic design of an FT synthesising facility in Japan; JERA would study applicable regulations, feedstock procurement, methods of mixing neat SAF with conventional jet fuel, and business feasibility; Mitsubishi would undertake basic design of a gasification facility; and ITOCHU would research supply logistics of SAF, by-products and by-product markets.

Meanwhile, a new report by aviation data group IBA has identified a 13% decline in CO2 emissions per seat, per kilometre, on Japanese domestic flights between January 2019 and June 2021.

While just over half of the survey period was blighted by the Covid-19 pandemic, and so impacting flight operations, IBA’s Senior Aviation Analyst Finlay Grogan, who authored the report, said the emissions reduction also reflected a tripling of the number of next-generation aircraft deployed on Japan’s domestic air routes.

The report said JAL had reduced emissions of its domestic flights by approximately 7% through deploying new Airbus A350-900 and Boeing 787-8 aircraft on high-capacity routes, replacing older, less-efficient Boeing 767-300s and 777-200s, the latter now retired by the airline.

Fleet renewal also enabled ANA and its low-cost division Peach to cut their emissions by more than 6% and 9% respectively through the introduction of Airbus A320neo jets to replace less-efficient A320ceo units, while ANA also exited older widebody jets.

ANA Wings was a standout in the IBA assessment, achieving a 13% cut in carbon emissions by replacing Boeing 737-500s with smaller, younger De Havilland Q400 turboprops.

The report said next-generation aircraft operated more than 16% Japanese internal flights in June 2021, compared to an average of just 5% through 2019, and said reductions would continue as the nation’s airlines continued to induct new narrowbody aircraft.

But beyond re-fleeting, Japan’s airlines have also reported significant additional emission reductions during the survey period from a range of operational initiatives including engine core washing, reduced use of auxiliary power units, optimised flight plans, continuous ascent and descent profiles, idle reverse thrust, single-engine taxi-in, optimised uplift of potable water supplies, the use of lightweight cargo containers, and even closing aircraft window shades while parked at airports to reduce the demand for air conditioning.   

Photo: ANA Wings achieved a 13% cut in carbon emissions by replacing Boeing 737-500s with De Havilland Q400 turboprops, says an IBA report

Eight proposed sustainable aviation fuel (SAF) projects have been shortlisted by the UK’s Department for Transport (DfT) to share up to £15 million ($20m) in grant funding to support early-stage development of large-scale SAF production plants in the UK. All selected projects have the potential to reduce emissions by more than 70% on a lifecycle basis when used in place of conventional fossil jet fuel, said the DfT. The plants plan to produce jet fuel from a variety of sources including sewage; household and commercial waste; alcohol derived from wastes; and from captured atmospheric carbon dioxide. Organisations standing to gain from the funding include Velocys, Fulcrum BioEnergy, LanzaTech, Lanzajet, Advanced Biofuel Solutions, Alfanar Energy, Green Fuels Research, Nova Pangaea and Carbon Engineering, with a few of the projects shortlisted still at their feasibility stage.

Research carried out for the DfT indicates that by 2040 the SAF sector could generate between £0.7 billion and £1.66 billion a year for the UK economy, with potentially half of this coming from the export of intellectual property and the provision of engineering services. Between 5,000 and 11,000 green jobs could also be created across the nation and SAF production could also increase UK fuel security.

The eight projects shortlisted in the Green Fuels, Green Skies (GFGS) competition are:

• Advanced Biofuel Solutions Ltd – ABSL will work with a British refinery and engineering company to produce a detailed engineering design for a new facility in Cheshire, north-west England. The plant will use gasification and Fischer-Tropsch (FT) technology to convert 130,000 tonnes of waste a year into aviation fuel.
• Alfanar Energy Ltd – The company’s Lighthouse Green Fuels (LGF) project, located in Tees Valley, north-east England, will use gasification and FT technology to convert household and commercial waste into around 180 million litres of SAF and naphtha. The project is currently completing design optimisation work ahead of starting the front-end engineering design (FEED) stage by the end of 2021.
• Fulcrum BioEnergy Ltd – The Fulcrum NorthPoint project, being developed at the Stanlow Manufacturing Complex in north-west England, will convert residual waste into around 100 million litres of SAF using gasification and FT technology. Funding will support the FEED stage of project work.
• Green Fuels Research Ltd – A joint endeavour between Green Fuels, Petrofac and Cranfield University, the FIREFLY project aims to demonstrate and certify a technology route to SAF from sewage sludge. Funding will support the project’s pre-FEED development stage.
• LanzaTech UK Ltd – Funding will support the FEED stage of a proposed facility in Port Talbot, South Wales, which is expected to produce over 100 million litres of SAF per year, using ethanol from biogenic wastes and industry flue gases.
• LanzaTech UK Ltd and Carbon Engineering – Funding will support a feasibility study into producing 100 million litres of SAF per year using Carbon Engineering’s direct air capture (DAC) technology, and hydrogen from water electrolysis to convert into SAF using Lanzatech’s gas fermentation and LanzaJet’s alcohol-to-jet technology. Project members include British Airways and Virgin Atlantic.
• Nova Pangaea Technologies (UK) Ltd – Along with British Airways and LanzaJet, the feasibility project will study the optimal design to construct a facility that produces more than 100 million litres of SAF a year using UK woody residues.
• Velcocys Projects Ltd – The funding will support progress towards FEED of the Altalto project being developed by Velocys and British Airways to build a commercial waste-to-SAF plant in Immingham, north-east England, using gasification and FT technology.

The eight projects are understood to be assured of funding with the amounts to each to be announced very shortly and subject to contract. The bulk of the funding will go to those projects in the pre-FEED or FEED phase with around £2 million expected to be awarded to those in their feasibility stage. The GFGS funding period is a fixed term from August to the end of March 2022.

Sean Doyle, CEO of British Airways, which is involved in four of the projects, commented: “We’re determined to transform the sustainability of our industry and this potential GFGS government funding is critical in helping us to show the feasibility of building SAF plants. These plants would be a game-changer for our industry, not only delivering SAF but also creating many hundreds of highly skilled jobs while increasing economic growth around the UK.”

Henrik Wareborn, CEO of Velocys, which benefited from funding under the government’s £20 million F4C competition held in 2017, said: “We welcome this new funding as it will help bring Altalto closer to the production of SAF. The GFGS initiative highlights the importance of building SAF facilities throughout the country that will help the UK not only to meet the targets set but also make a quantifiable impact on climate change.”

Added Jimmy Samartzis, CEO of US-based LanzaJet, which is partnering on one of the shortlisted projects with British Airways and Nova Pangaea, said: “Together, we are grateful to the Prime Minister and DfT for their support in advancing the production of SAF in the UK.”

The Green Fuels Research (GFR) project with Petrofac and Cranfield University will demonstrate an integrated route to SAF using sewage sludge as feedstock and encompasses engineering design and construction of a UK demonstration plant capable of generating the quantities of fuel to allow certification to international standards. This in turn, says GFR, will lead to a first-of-a-kind commercial refinery and roll-out to several locations where airports, pipeline terminals and wastewater treatment works are in close proximity. The company says around 53 million tonnes per annum of untreated sewage sludge are collected in the UK from about 8,500 wastewater treatment works.

Commenting on the competition announcement, Green Fuels CEO James Hygate said: “We’re delighted to have this opportunity to prove the environmental and commercial viability of the FIREFLY route, which integrates several existing technologies into a sustainable industrial process. Among many advantages, FIREFLY will use fully biogenic feedstock which will emit no fossil carbon, won’t contribute to deforestation or compete with food production, and will not rely on imports with long, high-emission supply chains. And perhaps most importantly, we expect to demonstrate exceptional carbon savings, meaning this is potentially a very fast route to decarbonising aviation that won’t rely on as yet unknown technologies.”

The competition has been managed by consultants Ricardo and once the funding has been distributed, it will monitor the eight projects on behalf of the DfT.

“We have been amazed by the diversity and creativity of the entries,” said Alexandra Humphris-Bach, Ricardo Principal Consultant. “All the selected projects have a clear potential to produce SAF capable of reducing emissions by more than 70% on a lifecycle basis, when used in place of a conventional fossil jet fuel.”

The UK’s Transport Secretary, Grant Shapps, said: “Aviation will be central to our future growth and plans to build back greener from the pandemic, which is why we have invested over £20 million in the past year to decarbonise the sector in line with our world-leading net zero targets.

“With less than 100 days to go until COP26, we’re ramping up our efforts even further to help companies break ground on trailblazing waste to jet fuel plants and put the UK at the forefront of international SAF production.”

Photo: British Airways is involved in four of the eight shortlisted projects

Japan’s two major airlines, All Nippon Airways (ANA) and Japan Airlines (JAL), each operated domestic commercial flights from Tokyo Haneda Airport on June 17 using sustainable aviation fuel produced in the country. The JAL flight, from Haneda to Sapporo used two different types of SAF in the jet fuel blend, one sourced from wood chips and the other from microalgae, while ANA used just microalgae in the fuel for its flight to Osaka Itami. The ASTM-certified SAF batches were produced under a project led by the New Energy and Industrial Technology Development Organization (NEDO), the Japanese national research and development agency. The JAL flight was the first in the world to use SAF derived from gasified wood chips synthesised into aviation fuel. It was produced in a Velocys Fischer-Tropsch (FT) reactor from the hydrogen and carbon gases generated by the gasification of the wood chips at a demonstration plant in Nagoya. A separate project between NEDO and IHI produced SAF for both flights from Hyper-Growth Botryococcus Braunii microalgae.

The fuels were produced under a project that ran from 2017 to 2020 with the aim of establishing technologies to produce inexpensive and reliable local commercial supplies of SAF by around 2030 to reduce aviation CO2 emissions. The NEDO project was tasked with finding ways to inexpensively collect algae with mass-culture technology and developing technology that stabilises the characteristics of gas for the gasification of wood chips.

The SAF derived from wood chips was produced under a collaboration by Toyo Engineering, Mitsubishi Power, JERA and Japan Aerospace Exploration Agency (JAXA). The demo plant (see diagram below) was constructed on the premises of JERA’s Shin-Nagoya Thermal Power Station, which was also responsible for raw material procurement, with the technology supplied by Mitsubishi Power and Toyo Engineering, and JAXA evaluating and testing the jet fuel’s combustion characteristics. UK-based Velocys secured an agreement with Toyo in September 2019 to supply its FT technology, equipment and catalyst for the demo facility. It also agreed to grant an exclusive right for Toyo to secure and use the licence and technical services of its technology for a future commercial plant in Japan.

The facility, according to Velocys, produced 2,366 litres of neat aviation fuel blendstock that was tested to ensure it met the required ASTM D7566 Annex 1 international standard.

Commenting on the JAL flight, which the company says was the first commercial flight in the world to use wood chip derived jet fuel, Velocys CEO Henrik Wareborn said: “SAF synthesised with Velocys FT technology from gasified forestry residue has a 70% lower carbon intensity than conventional fossil jet fuel. In addition, FT SAF offers significant additional air quality improvements, thanks to 90% lower particulate emissions, 99% lower sulphur emissions and lower nitrogen oxide emissions than conventional fossil fuels.”

Responded Toyo CEO Haruo Nagamatsu: “The Velocys technology demonstrated high efficiency and stable performance at the NEDO plant, and contributed to the production of high-quality SAF, green naphtha and green diesel.”

JAL carried out Asia’s first biofuel test flight in January 2009, using SAF made from the non-edible crop camelina. Since then, it has flown two flights from the United States to Tokyo using SAF in 2017 and 2019, and from June 2019 five delivery flights of new A350 aircraft from the Airbus plant in Toulouse have used SAF. In 2018, JAL launched a project to convert cotton clothing into locally produced SAF and in February this year operated the first domestic flight to use locally sourced SAF.

The airline is an investor in US SAF producer Fulcrum BioEnergy and is planning to use SAF on flights departing North America and says it is conducting a feasibility study with domestic companies on manufacturing and selling SAF in Japan made from waste plastic.

The SAF used on the Tokyo-Sapporo flight totalled 3,132 litres, including the microalgae-derived fuel, representing a 9.1% blend with conventional fuel. JAL says this was the first time two different types of SAF had been used on the same flight.

IHI’s microalgae project started in 2017 and algal culture tests have taken place in Kagoshima and Thailand. The fuel produced was approved in May 2020 under new Annex 7 of ASTM D7566, the first time a Japanese corporation as an applicant has obtained the international standard. The company said it would continue to study the formation of a supply chain for producing and supplying fuel from the feedstock, and aims to commercialise the fuel “as soon as possible”.

ANA announced in April a net zero emissions goal for 2050, with an interim 2030 target of carbon emissions from aircraft operations being less than or equal to 2019. The increased use of SAF “will be at the core” of CO2 emission reduction measures, said the airline. In 2019, ANA signed a SAF offtake agreement with LanzaTech, which was expanded in 2020 that gives it the opportunity to participate in a fuel offtake across LanzaJet’s global portfolio and production (see article). Last November also saw ANA signing an agreement with SAF producer Neste that included a first delivery of Neste SAF sourced from renewable waste and residue raw materials, which was used on ANA flights from Tokyo (see article).

Photo: JAL A350 readied for Tokyo-Sapporo SAF flight