International motor racing is committing to reduce its Scope 3 emissions through procuring SAF using book-and-claim. Formula 1 has announced its first investment in SAF as part of its “ultra-efficient logistics strategy” and a target of reaching Net Zero by 2030. The first phase focuses on SAF purchases through its global partner DHL for air cargo to and from ‘flyaway’ races since the Australian Grand Prix in March and covers around 20% of subsequent cargo flights this racing season. The UK-based Mercedes-AMG Petronas Formula One race team, meanwhile, began book-and-claim offsetting in 2022 and claims to be the first global sports team to do so. Its programme was facilitated by SAF supplier SkyNRG and British Airways. The team expects a fourfold reduction in its aviation emissions by the end of 2025 compared to 2022 through the purchase of sustainable aviation fuel certificates (SAFc).

Formula 1 said SAF is part of a continued transition to sustainable fuels across the sport and its operations. From 2026, F1 cars will run on 100% sustainable fuel, while F2 and F3 will reach that standard by next season, having been at 55% since the start of 2023, and the FIA safety and medical cars currently use 40% sustainable fuel. Grands Prix in Europe are delivered using biofuel-powered trucks and from next season, F1 will also power key operational areas using a low-carbon power solution provided by Aggreko.

It said as it wasn’t possible to directly fuel cargo planes used to move F1 freight with SAF, it is instead procuring it through DHL’s GoGreen Plus service, in which the amount of fuel needed would be ‘booked’ and added to the supply chain in other planes where SAF is directly available. “This ensures a high standard of product quality and traceability, with all carbon reductions verified before F1 can ‘claim’ them in their carbon footprint,” said Formula 1. “This model helps reduce carbon emissions with current SAF volumes and encourages future market growth.”

It added that SAF was to be “a core part” of Formula 1’s alternative fuel strategy and its use would be extended “in the coming months and years”. Other steps to reduce the sport’s carbon footprint include rationalising the FIA Formula One World Championship calendar where possible to create a better flow of races; utilising regional hubs in Europe, UAE and the US to reduce the distance freight travels between events; and redesigning cargo containers to fit on more efficient Boeing 777 aircraft, thereby reducing emissions by around 17%.

“Our longstanding partnership with Formula 1 is built on a shared passion for innovation and excellence. We are committed to using our expertise to transport Formula 1’s cars and equipment around the world in the most efficient way possible,” said Paul Fowler, Head of Motorsports Logistics, DHL. “With 40 years of expertise in motorsports logistics, we are focused on cutting down greenhouse gas emissions and making motorsport more sustainable with every step we take.”

“Formula 1 has always been at the forefront of innovation, and our early stage investment in sustainable aviation fuel is a testament to our dedication to deliver on our Net Zero by 2030 commitment,” commented Ellen Jones, Head of ESG, Formula 1. “SAF is just the latest step for the business and underscores how alternative fuels both on an off the track can materially reduce carbon emissions. This delivery of our sustainability strategy is only made possible through coordinated actions across our sport.”

An early adopter of SAF book-and-claim, Mercedes-AMG Petronas Formula One motor racing team has estimated a total reduction of 18,500 CO2 equivalent tonnes (tCO2e) during 2024 and 2025, cutting 8,000 tCO2e this year and another 10,500 tCO2e next year, through SAFc.

“Our investment in sustainable aviation fuel is more than a strategy,” explained Alice Aspitel, the team’s Head of Sustainability. “We believe it can create a greener future. We see SAFc as a game-changer, a way for sports and businesses to make a lasting impact. We hope that our support for this sector can help trigger others to do the same and derive further investment in SAF production.”

Amsterdam-based SAF supplier SkyNRG said voluntary demand signals for the fuel were continuing to strengthen as airlines, cargo companies and corporations increasingly established ambitious SAF usage targets to help compensate for their contributions to flight emissions. It estimated in its 2024 global SAF market assessment that announced demand would reach 12 million tons (4 billion gallons) by 2030.

In its latest sustainability report, Mercedes-AMG Petronas said it was committed not just to leading automotive technologies, but also innovative sustainability measures.  

“As a Formula One team racing on multiple continents, aviation accounts for a significant portion of our carbon footprint, so our investment has significantly improved our overall environmental impact and supported our journey towards net zero, despite increased travel due to a growing race calendar.”  

In 2023, the team reduced its business travel emissions by 6,695 tCO2e, or 65%, compared to 2022, when emissions fell by 2,628 tCO2e.

Between 2022 and the end of 2025, Mercedes-AMG Petronas Formula One expects to achieve total carbon emissions reductions of more than 27,500 tonnes through investment in SAFc, four times its annual reduction since adopting book-and-claim.

To ensure environmental integrity, the race team’s claimed reductions using SAFc are authenticated using the best practice accounting standards in the ‘SAF Certificate Emissions and Accounting Guidelines’ of the Clean Skies for Tomorrow Coalition.

“This reflects our commitment to understanding and addressing our environmental impact, while also supporting the growth and credibility of the SAF certificate market. We aim to showcase SAFc’s potential and demonstrate its impact, encouraging others to adopt SAFc and drive further investment,” the race team said.

The investment in SAFc also reflected the team’s twin strategy of buying book-and-claim certificates to support market growth while concurrently enhancing the capacity of refineries to increase production of SAF. 

“A net reduction in our emissions sits at the heart of our operations and the ambitious sustainability targets we have set ourselves,” said Toto Wolff, Team Principal and CEO of the Mercedes-AMG Petronas Formula One team, also highlighting emission reduction initiatives in its ground operations, including the use of renewable fuel for support vehicles and shared transport for employees. “We continue to invest in innovative solutions and technology that will enhance our performance, helping us go further, faster,” he said.

SkyNRG said companies held unique positions in driving sustainable behaviours. “Adopting SAF sets your organisation apart as a sustainability leader in your industry,” the company said. “Investing in SAF and reducing your carbon footprint sends an inspiring message to your employees, customers and shareholders.”

Photo (F1): Formula 1 to procure SAF through DHL’s book-and-claim programme

Tony Harrington

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Additional reporting by Christopher Surgenor

Book-and-claim will be featured at Aviation Carbon 2024!

Shell has revealed it will take a financial hit of between $600 million and $1 billion from pausing construction of its biofuel plant in Rotterdam that was designed to produce 820,000 tonnes of biofuels a year, split between sustainable aviation fuels and renewable diesel, from used cooking oil and animal fats. First announced in September 2021, the former Pernis refinery at the Shell Energy and Chemicals Park Rotterdam was expected to open this year and be one of the biggest facilities in Europe producing fuel from waste. The oil major has cited difficult current market conditions for biofuels in Europe due to oversupply, cheap imports and lower than expected growth in demand for biodiesel. Technical problems had already led to delays in the project’s construction. Former Shell Aviation President Jan Toschka left the company earlier this year to join a new SAF venture, Zaffra, located in Amsterdam. Meanwhile, a new Dutch SAF feedstock startup Green Air Fuel Technology (GAFT) is on a fund-raising round to help develop its novel process.

Back in 2021, Shell said it was aiming to produce 2 million tonnes of SAF by 2025, and for SAF to make up 10% of its global aviation fuel sales by 2030. As part of its Powering Progress strategy, the company planned to transform its refineries into five energy and chemical plants, reduce the production of traditional fuels by 55% by 2030 and provide more low-carbon fuels, including for aviation. The Rotterdam project was said by the company to require “hundreds of millions of dollars of investment each year during construction.”

Announcing the decision to “temporarily pause” construction, Shell said it would “address project delivery and ensure future competitiveness given current market conditions.”

Added Huibert Vigeveno, Shell’s Downstream Renewables and Energy Solutions Director: “[This] will allow us to assess the most commercial way forward for the project. We are committed to our target of achieving net zero emissions by 2050, with low-carbon fuels as a key part of Shell’s strategy to help us and our customers profitably decarbonise. And we will continue to use shareholder capital in a measured and disciplined way, delivering more value with less emissions.”

Dogged by technical difficulties, Shell said earlier this year the Rotterdam facility would be operational in the latter part of the decade. Just prior to announcing plans for the Rotterdam facility in 2021, Shell pulled its commercial and technical support, as well as passing up an equity share option, in the Velocys Altalto municipal waste to jet fuel project in north-east England. Shell said it had “decided to focus our resources on other lower-carbon fuels opportunities which leverage our own technology.”

In 2019, Shell also announced technical and commercial support for developing a SAF project led by SkyNRG to construct a production plant in Delfzijl, Netherlands, capable of producing 100,000 tonnes of SAF annually. Originally planned for commissioning in 2024, the project has so far not progressed.

Two years ago, Shell Aviation joined with Accenture and Amex GBT to launch the Avelia book-and-claim programme that enables corporations to verifiably purchase SAF to compensate for the emissions created when their employees fly on company business.

Elsewhere in the Netherlands, GAFT is developing a proprietary process in which waste feedstock, or synthetics, can be fermented to produce a batched process HEFA replacement that can be used in conventional refining facilities for SAF. Having received EU funding of €2.5 million to accelerate its technology, GAFT is now on a fund raise to aid the development of a first-of-a-kind plant and is involved in trial projects using its electrolysis units in Denmark and Romania.

The company says with a prospective HEFA feedstock squeeze expected by 2030, it can provide SAF producers with an economical, alternative feedstock that has no fossil fuel or food origin.

“In Europe and globally, the HEFA feedstock volumes cannot keep pace with new SAF production volumes. GAFT brings best available technology components together with unique patents for a first-of-a-kind, future-proof SAF feedstock plant,” said Frank Schreurs, Chief Executive of GAFT. “Our technology tackles the HEFA feedstock shortage to meet the rapidly increasing SAF market demand and we are working with our partners to bring forward our first deployment in the coming year.”

Photo: Shell

Christopher Surgenor

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Globally announced sustainable aviation fuel production capacity significantly increased last year, driven by regulatory developments such as ReFuelEU, the new UK SAF mandate and incentives to support SAF uptake in the US. Additionally, other countries, particularly in Asia, are looking to introduce mandates and targets for production, leading SAF to increasingly be seen as a global tradeable commodity with emerging trade corridors involving the US, SE Asia, Europe and South America, says SkyNRG’s latest annual SAF Market Outlook. Voluntary demand signals have also continued to strengthen, with multiple airlines, cargo companies and corporates setting ambitious SAF targets. However, says the report, most announced facilities still face the challenges of raising capital, construction and commissioning, and this year will be critical for projects targeting operations before 2030.

For the first time, SkyNRG’s 2024 SAF Market Outlook, which is primarily focused on the period to 2030 and  was developed in collaboration with consultancy ICF, has been expanded to include a global coverage. It considered 349 announced projects before excluding those in the immature stage and those that hadn’t provided an update in the past two or more years, plus those with a high degree of financial and feedstock risk, Tom Berg, Senior Policy and Sustainability Manager at SkyNRG, told a launch event in Brussels.

The report says forecast global production capacity reached 17.3 million tonnes (Mt), the equivalent of around 5.7 billion gallons (Bgal), which is an increase of 4.0 Mt (1.3 Bgal) over a year ago. SAF demand is being driven by regulatory developments, with mandates and aspirational targets adding up to a total demand of 16.1 Mt (5.3 Bgal) across multiple countries.

Over the past year, the ReFuelEU legislation has been adopted requiring all fuel made available to aircraft operators at EU airports to contain a minimum share of SAF, starting at 2% in 2025, rising to 6% in 2030 and 70% in 2050. A further 1.2% requirement applies to synthetic, or e-fuels, from 2030. In the UK, legislation is now awaiting adoption of a national mandate, also starting in 2025, targeting a higher 10% share of SAF by 2030 and the government is consulting on a revenue certainty mechanism aimed at accelerating the development of domestic production capacity.

The United States has published long-awaited guidance on a federal blenders tax credit and several state low-carbon fuel standards are in place or under discussion. According to the report, SAF facilities announced in the US are also significantly larger compared to other regions, with capacities exceeding 300 Mgal (0.9 Mt) not uncommon. The report attributes this to the feedstock strategies chosen in these projects, which are mostly agricultural commodity based, such as corn and soy. SAF produced from agricultural feedstocks would not be eligible under EU and UK mandates, however, forgoing their export possibility to Europe but could be attractive to other overseas markets.

In Asia, Japan is now emerging as a major potential demand centre for SAF following the publication in 2023 by the government of a policy proposal to develop a national SAF mandate requiring 10% SAF use by 2030, which would represent a SAF demand of about 1.4 Mt (0.5 Bgal). India has communicated a policy proposal for a national mandate of 1% by 2027, doubling to 2% by 2028 (requiring around 0.2 Mt) and potentially increasing to 5% by 2030. Malaysia, Indonesia and South Korea too are considering mandates. Singapore has proposed a national target of 1% by 2026, potentially increasing to 3-5% by 2030, depending on global developments and availability of SAF, to be partially funded by a passenger SAF levy.

China has already established a SAF use goal of 50,000 tonnes, with industry expecting a blending mandate of 2-5% by 2030 to be announced. A 5% mandate would require 2.5 Mt of SAF use, which Berg said could be a game-changer for SAF provision globally. SAF capacity is rapidly expanding in China, with lead times seemingly shorter than in the rest of the world. “Based on current announcements, we expect China and Southeast Asia to have SAF capacity of 3.6 Mt (1.2 Bgal) by 2030,” notes the report.

Governments in other countries too are moving forward on SAF production requirements, such as Turkey, the UAE, Australia and New Zealand. Latin America, according to the report, is emerging as a potentially significant production hub for SAF, with an expected SAF capacity of 2.3 Mt by 2030, and is already a major exporter of agricultural commodities. Some US SAF projects are intending to make use of Brazilian ethanol, particularly as Brazilian sugarcane ethanol can achieve lower carbon intensities than US corn, it adds, “signalling that in the future, the US may be importing finished fuel.”

HEFA domination

Capacity announcements are heavily dominated by the HEFA pathway until 2030, around 85% of the total, stated Berg (see graph below). “What is clearly missing is the advanced fuels pathway, which while there is a pipeline of projects, there is no level playing field because they are more expensive and have to compete with cheaper HEFA-based fuels. We also need to see much more progress on the e-fuel pipeline to reach the sub-targets. The pipeline is big but the projects are almost all at the feasibility stage.”

He said there was a big uncertainty on the impact of the SAF price on demand and the future of next-generation fuels was dependent on strong demand-side policies such as mandates. “Before 2035, the next-generation pathways will have to take over from HEFA to reach the scale needed by 2050,” he said. “The choices we make today will have an impact on what happens in 2050. The direction is very clear: we need to invest, we need to innovate and we need to collaborate, and it’s very important we design efficient production processes.”

In the meantime, the report sees significant supplies of SAF coming from co-processing by petroleum refiners but found little publicly available information. “Since this pathway represents low capital investments relative to other SAF pathways, co-processing represents a cost-effective compliance method under ReFuelEU,” it says. “If EU refiners were to fully utilise their co-processing capacity to the ASTM limit of 5%, this could yield around 1.7 Mt of SAF per year.”

With current EU SAF capacity announcements to date, 3.8 Mt of SAF would be expected to be delivered by 2030, with a total of 5.5 Mt in the pipeline, suggesting only a rate of 50% of projects succeeding would have to be achieved to meet EU demand of 2.6 Mt (including 0.3 Mt of e-fuel) in 2030.

A concern is that since starting its market outlook, each year since 2022 has seen the capacity curve pushed back because of delays to projects. “The reasons can be many,” said Berg. “They might be awaiting policy certainty because the final details aren’t known yet, the financing risk is too high to progress to final investment decision (FID) or it could be technical difficulties.”

He also points to a potential problem with the EU 2035 target that will require 2.5 times the amount of SAF compared to 2030, meaning an extra 3 Mt needed to meet the target. “This may mean becoming much more import dependent and possibly at a higher cost as global demand increases,” he said. “The e-SAF mandate requirement will also triple in 2035 compared with 2030.”

In the US, SAF capacity announcements so far are expected to deliver 6.7 Mt, or 2.2 billion gallons, by 2030, with most used by the voluntary market. However, continued uncertainty on tax guidance pertaining to GHG methodologies and incentive levels, in combination with increasing pressure on feedstock markets, are expected to lead to further delays in SAF capacity expansion across the nation. Currently, only 2.1 Mt (0.7 Bgal) of SAF capacity is covered by facilities that are operational or under construction. The SAF Grand Challenge, a federal strategy to raise SAF production in the US, has an aspirational target of 3 billion gallons by 2030.

Looking ahead, SkyNRG estimates global SAF capacity could grow to around 250 Mt by 2050 if deployment of new pathways using biomass feedstocks and green hydrogen are derisked over the coming years and accelerate rapidly thereafter. To meet this production, between 500-800 SAF facilities are required at a cumulative investment of $1 trillion, assuming $2 billion per facility. This represents an average annual capex of $40 billion between 2025 and 2050, roughly equivalent to 8% of global annual upstream oil and gas capex in 2019.

“Collaboration between project developers and investors is vital for success. However, stable policy frameworks are also required for the transition to net zero aviation,” said Philippe Lacamp, CEO of SkyNRG. “The Market Outlook emphasises the need for early policy discussions to evolve swiftly into concrete proposals to enable the building out of the significant pipeline of SAF capacity that we identify in this report.”

Industry body Airlines for Europe said the Market Outlook showed European airlines and suppliers could meet the required levels of SAF usage until 2030 under ReFuelEU. At the report’s launch event, A4E Deputy Managing Director Laurent Donceel, however, outlined some of the challenges the European SAF sector faced, including the cost of production and cost of supply, access to renewable energy, access to SAF across the EU and ensuring the sustainability of feedstock.

“It is positive to see that SkyNRG forecasts there will be sufficient SAF to meet the requirements of ReFuelEU until 2030,” he commented. “But many European airlines aren’t stopping there. They want to do more so it is important that Europe designs a SAF industrial policy that addresses the cost of production, accelerates the supply and ultimately brings down the cost of SAF in Europe. Synthetic fuels in aviation, which will form part of the EU’s ReFuel mandate, will require particular attention in the coming months. E-SAF will require a large amount of clean energy and hydrogen for their production and yet have failed to catch enough attention from financial markets and policymakers so far.

“Growing a nascent SAF industry into one that will provide the majority of the fuel for airlines is a monumental task. For airlines, there is a need to work with airports to help develop the market for SAF, finance needs to flow into the sector and the energy industry needs to get serious about the transition away from fossil fuels. This report shows that a sustained effort from users, producers, policymakers and financers will ensure we reach our targets. The stakes are too important for them not to deliver and this report should be a clarion call to all to knuckle down and deliver.”

SkyNRG has recently secured investment from Macquarie Asset Management, which the Amsterdam-headquartered company says will enable its next growth phase, including realisation of SAF projects in Europe and the US.

Global SAF capacity announcements until 2030 (source: SkyNRG)

Top photo: KLM/SkyNRG

Christopher Surgenor

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A feasibility study has concluded that by 2050, Ireland could generate at least €2.55 billion ($2.8bn) in revenues and create around 1,000 skilled jobs by producing its own sustainable aviation fuel. The research was led by SAF supplier SkyNRG and SAF facilitation and advocacy group SFS Ireland, backed by Boeing and aircraft lessors Avolon and ORIX Aviation. Their report finds the country would need 10 production plants, each with an 80,000 ton capacity, to meet its own EU-mandated SAF requirements by 2050. Significant additional benefits would also accrue if SAF was produced in Ireland for export. It identified the country’s best SAF production pathway as power-to-liquid (PtL), through which renewable energy is used to create eSAF by combining green hydrogen with biogenic CO2. But it said significant research, development and government incentives would be needed to kick-start the sector.

The report, ‘Ireland’s Sustainable Aviation Fuel Opportunity’, was launched by Ireland’s Minister for Enterprise, Trade and Employment, Simon Coveney, who said the government was committed to supporting EU and global actions to help cut harmful emissions from aviation, and welcomed “the proactive approach from the aviation sector to progress its own net zero commitments.”

The European Union’s ReFuelEU aviation initiative requires oil companies to gradually increase the proportion of SAF in aircraft fuel supplied at EU airports, increasing from 6% by 2030 to 70% by 2050.

“The European Green Deal has set ambitious targets for reducing net emissions by at least 55% by 2030, when compared to 2019 levels, and to be the first climate-neutral continent by 2050,” said Coveney. “This research shows there are clear future economic benefits from the green economy, which can create new jobs and exciting new business ventures. We look forward to engaging further with industry to explore Ireland’s sustainable aviation fuel potential.”

Ireland currently imports all its aviation fuel. The year-long SAF study was conducted to assess the viability of commercial production using local feedstocks, and focused on a minimum annual output of 100,000 tons of the fuel, commencing before 2030.

Based on RefuelEU SAF mandates for Ireland, the report says three production plants would be needed to deliver 230,000 tons by 2035, with an estimated economic value of €800 million, and 10 plants to deliver 800,000 tons by 2050, valued at €2.55 billion.

It indicated a large potential existed for PtL fuels produced with energy generated by offshore wind turbines but added SAF produced using bio-based intermediates such as renewable natural gas could expedite production to meet the advanced biofuels portion of the ReFuelEU mandate.

To help stimulate development of SAF and green hydrogen sectors in Ireland, the report highlights the need for public-private collaboration and support mechanisms including capital allowances, tax credits, guaranteed minimum pricing and investment incentives. It also urges funding and promotion of SAF technologies through third-level institutions and government entities such as Enterprise Ireland and Science Foundation Ireland.

It recommends SAF production plants should be considered in Ireland’s industrial planning processes, investment is needed in hydrogen storage and transport, and operation and planning of the electricity grid should be optimised to resolve congestion in power delivery.

“Significant progress is required for Ireland to be able to develop eSAF at scale, particularly to ensure renewable power is available on the scale required for production of hydrogen in the required quantities,” cautions the report. “The increased levels of offshore wind power generation that government initiatives are targeting by 2030 will put the country in a much stronger position to develop a domestic SAF industry.” 

Sheila Remes, Boeing’s VP Environmental Engagement and Business Development, said Ireland’s potential for growth in renewable energy made it a prime location for SAF production.

SkyNRG CEO Philippe Lacamp, added: “Ireland has an opportunity to combine its renewable resources, skilled workforce and the right policy environment to create a thriving SAF industry. While there is still work to be done, we are convinced that Ireland can play a significant role in creating this SAF production capacity.”

Darren Carty, Partner, SFS Ireland, said the feasibility study was “the foundation for establishing a low-carbon SAF industry in Ireland. We look forward to advancing collaboration and essential public-private partnerships.”

Andy Cronin, CEO of aircraft lessor Avolon, said: “Large scale deployment of SAF and the transition of the global fleet to new technology aircraft are two of the biggest near-term drivers that can progress the sector’s net zero by 2050 goal. It is going to require large levels of investment and close collaboration across many stakeholders, and we value the minister’s engagement to explore Ireland’s sustainable aviation fuel opportunity.”

Marie-Louise Kelly, CFO of ORIX Aviation, and Chair, Aircraft Leasing Ireland, a group representing the Irish aircraft leasing industry, said the SAF report had identified multiple opportunities for the country. “Along with our sectoral experience [in aviation] we were also able to add the wider ORIX Group’s extensive expertise in renewable power generation to the study,” she added. “We welcome the minister’s commitment to engage on SAF production and look forward to exploring ways to position Ireland at the heart of the global drive to Net Zero 2050.”

Meanwhile, daa, the operator of Dublin and Cork Airports, has welcomed the adoption of the ReFuelEU Aviation regulation.

“There’s a willingness amongst airlines to use SAF but there currently isn’t enough of it available, leading to prices being higher than for conventional fuels,” said Andrea Caroll, Group Head of Sustainability at daa. “The regulation is an important step towards reducing the aviation industry’s carbon footprint that can have a notable impact in the very near term.

“We’re fully committed to reducing overall carbon emissions at our airports and are able to fully facilitate SAF once there is demand and availability. daa is ready to facilitate the increased transition to SAF and we are working hard with airlines and all relevant stakeholders at both airports to meet our net zero 2050 targets ahead of time.”

The airport operator has announced proposals to incentivise airlines to operate lower CO2 emission aircraft at Dublin Airport. A low emissions discount would apply to aeronautical charges, with airlines that fly high emission aircraft charged more.

Photo: daa

Tony Harrington

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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

New analysis by sustainable aviation fuel supplier SkyNRG estimates blending mandates worldwide and SAF production goals could deliver up to 12.8 million tonnes (Mt), or 4.5 billion gallons, of the fuel by 2030, and by 2050, Europe and the US collectively could produce 120 Mt, or 42 billion gallons, of SAF. But the company says that to do so, 400 new refineries will be needed in the US and Europe – at a total cost of $650 billion – and warns competition for fuel feedstocks will be strong, particularly from producers of renewable diesel, potentially forcing up ingredient prices. In addition to catalysing SAF production, SkyNRG CEO Philippe Lacamp says surging demand will also create opportunities for “sustainability-oriented investors” to support development of production plants and supply chains.

The forecasts are contained in SkyNRG’s 2023 Sustainable Aviation Fuel Market Outlook, which assesses the current state and trends of the SAF market in the EU, UK and US, and coincides with Europe’s impending ReFuelEU legislative adoption (currently held up amid political wrangling), tax credits for SAF projects in the US, and UK consideration of its own SAF blending mandate, all intended to spur demand and supply.

Netherlands-based SkyNRG says 2030 mandates in Europe are likely to be met and estimates 3.3 Mt (1.2 billion gallons) of SAF will be in use commercially by then. But the company is more tentative about 2050 mandates, which it estimates will require the deployment of over 150 SAF refineries across Europe at a cost of $250 billion, or an annual average of $10 billion between 2025 and 2050.

As well, says the report: “A key sensitivity for European SAF supply is feedstock availability. But more important is the share of that feedstock pool that can be used for SAF production.” With many SAF commitments already exceeding mandated requirements, “demand in Europe could significantly outgrow supply,” says SkyNRG, “leading to greater dependency on imports, and/or greater pressure on feedstock to produce more SAF – and thus higher feedstock prices.”

The company estimates that by 2050, SAF capacity in Europe could grow to 40 Mt (14 billion gallons) if multiple production pathways are used to make new fuels, including the conversion of cellulosic materials or municipal solid waste through processes such as alcohol-to-jet, gasification and Fischer-Tropsch, and green hydrogen production of electro-fuels, or e-SAF. Currently, the dominant feedstocks for SAF production are hydro-processed esters and fatty acids (HEFA), which are largely waste oils, greases and fats.   

In the US, where the Biden Administration has brought in the Inflation Reduction Act that will stimulate SAF production through tax credits, plus some states introducing added incentives, SkyNRG predicts 5.8 Mt (2 billion gallons) of the fuel could be in commercial use by 2030. But it says more production will be needed, and through SAF processes other than HEFA, which is in strong demand. Alternatives include using corn ethanol and materials like agricultural waste, waste biogas or household waste.

“A wave of announcements in renewable diesel projects, mainly from the US, will further increase pressure on global waste and vegetable oil markets. If all renewable diesel announcements became operational, this could prove to strain available feedstock supply for HEFA and the feasibility of reaching 2030 goals in the US and Europe, or risk significantly impacting agricultural commodity markets globally,” warns SkyNRG.

To reach a domestic SAF production capacity of 77 Mt (27 billion gallons) – equal to 2019 jet fuel demand – the US would have to deploy around 250 SAF refineries by 2050, representing a cumulative investment of $400 billion, finds the report.

Beyond building SAF capacity, SkyNRG CEO Philippe Lecamp says the increasing demand for SAF presents a significant opportunity for sustainability-focused investors to support aviation’s transition to net zero emissions. “With hundreds of additional SAF factories needed, Europe and the United States alone offer ESG investment opportunities of $650 billion by 2050, and even more if we include upstream supply chains and related businesses. This is a very significant market that sustainability-oriented investors will want to play a part in.”

In his foreword to the report, Lecamp notes SAF projects increasingly are being announced not just to meet existing and new demand driven by blending mandates and voluntary SAF offtake deals, but also to meet growing demand from corporate and individual travellers seeking to compensate for their own air travel emissions by contributing to the cost of SAF used by their airline of choice. 

“Our analysis reveals that Europe and the United States can reach their 2030 goals if sufficient new capacity is announced and materialises. But there is still much to do,” says Lecamp.

“The industry now needs solid partnerships to realise the increase in production capacity required to reach net zero. These include partners who commit to meaningful SAF offtakes, investors that recognise the importance of SAF in their portfolio, and are willing to fund projects, and visionary leaders and governments who recognise and can address the investment hurdles that remain.”

Photo: SkyNRG

Tony Harrington

Correspondent

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A new market report by SkyNRG, the Amsterdam-based global provider of sustainable aviation fuels, predicts that both the US and Europe will fall short of their 2030 SAF targets unless production capacity is increased and fuel feedstock sources are expanded, and estimates the need for more than 450 new facilities to meet the 2050 goals of both markets. The report says current US announcements of SAF production rely predominantly on the availability of fats, oils and greases (FOGs), and corn ethanol, “with an optimistic perspective on the availability of FOGs”. It believes a lack of production incentives will limit use of alternative Power-to-Liquids (PtL) SAF in the US “despite its vast potential”. In Europe, it estimates there will be sufficient SAF to meet demand until 2027, as long as currently announced production capacity is delivered and some renewable diesel facilities also produce SAF. But it expects SAF supply in Europe and the UK will not be sufficient to meet mandated volumes by 2030 without more production capacity or imports, reports Tony Harrington.

In July last year, SkyNRG released its first market outlook report after the European Commission announced the ReFuelEU Aviation initiative to drive increased use of SAFs. In its latest report released this month, SkyNRG has provided updated projections following the US government’s introduction of its SAF ‘Grand Challenge’ to help drive up production of the fuels and a proposal by the UK government to introduce a SAF blending mandate.

“For the United States, SkyNRG concludes that meeting the 3 billion-gallon (8.6 Mt) SAF target by 2030 is conditional upon rapid feedstock and technology diversification,” finds the latest report, which warns that access to sufficient fats, oils and greases for SAF production would be limited by competing demands for renewable diesel production.

It adds: “SkyNRG expects that with current policies, a significant share of the 2030 production target would be filled with SAF from corn ethanol. The remainder would have to be filled by SAF from wastes and residues converted via the Alcohol-to-Jet and Gasification plus Fischer-Tropsch (AtJ/G+FT) pathways. Power-to-Liquids SAF is not expected to play a significant near-term role in meeting US SAF supply due to absent incentives, despite its vast potential.”

Production in the US is expected to be driven by three policy mechanisms that together could, says SkyNRG, significantly reduce the cost of SAF for the aviation industry: the Renewable Fuel Standard, the California and Oregon Low-Carbon Fuel Standards and the proposed federal SAF blenders tax credit.

The report also concludes that achieving 2050 targets for 100% SAF will be “extremely challenging”, even with stable demand for pre-Covid levels of jet fuel. “To meet the 100% SAF goal, the US will need to double down on valorising cellulosic waste feedstocks, develop novel sustainable biomass supply chains and accelerate green hydrogen deployment for Power-to-Liquids,” says SkyNRG. “Using conservative assumptions, we expect the US can develop around 250-plus SAF facilities by 2050, which could yield roughly 50 Mt (18 billion gallons) SAF, falling short of the required 75 Mt (27 billion gallons) under constant jet fuel demand.” The estimated number of SAF facilities was based on an average plant size of 200,000 metric tonnes, averaged across multiple technology pathways.

SkyNRG said that at the time its latest report was produced, an analysis of all renewable fuel projects announced in the US showed approximately 0.9 billion gallons (2.5 Mt) of SAF capacity was expected to be operating by 2030. “This means that the US is about 2.1 billion gallons (6 Mt) short of meeting the 2030 production goal.” Because the SAF Grand Challenge is a production target, imports of SAF were not considered in the SkyNRG analysis.

In Europe, the short-term assessment by SkyNRG is more positive. “We conclude that up to 2027, supply can match demand, provided that currently-announced production capacity materialises and some renewable diesel facilities will make additional investments to produce SAF,” says the report. “Until 2030, European supply is 2 Mt short of meeting projected mandate demand. More announcements are needed, and/or imports of SAF will have to be considered to meet expected mandates in the EU and UK.”

However, adds SkyNRG: “Based on announced projects worldwide, we expect that potentially 2 Mt of SAF could find its way to the European market, meaning additional European capacity would not be needed to meet mandated volumes in 2030.”  

That position would change if Europe opted to prioritise energy independence, which SkyNRG said would require European renewable diesel plants to produce SAF, or fresh commitments to produce fuel from cellulosic waste or renewable power inputs.“ Long term, Europe will have to develop 200-plus SAF facilities to meet a demand of 40 Mt by 2050 under constant jet fuel volumes. Most of these facilities would be based on AtJ/G+FT and Power-to-Liquid technology.”       

SkyNRG said that based on discussions with aviation stakeholders in the UK, a blending mandate of 2.5% (0.3 Mt) is most likely to be introduced in 2025, rising to 10% (1.2 Mt) by 2030, 31% (3.9 Mt) by 2040 and 75% (9.3 Mt) by 2050. “To meet the aggregate demand from EU and UK mandates, and the additional demand expected from national mandates, a SAF supply of 4.7 Mt in 2030 and 39.1 Mt in 2050 is needed.”   

Photo: SkyNRG

A major partnership has been formed by SAS Scandinavian Airlines, Swedish energy company Vattenfall, Shell Aviation and LanzaTech to explore the large-scale production in Sweden of synthetic sustainable aviation fuel, using carbon dioxide recycled from district heating, reports Tony Harrington. By 2026-27, the consortium plans to commission a new SAF facility near Forsmark, on Sweden’s east coast, with capacity to produce up to 50,000 tonnes of synthetic SAF, or electrofuel, per annum. The plant would use fossil-free electricity to convert CO2 collected from Vattenfall’s heat and power plant in Uppsala, near Stockholm and, when fully operational, would be able to provide SAS with up to 25% of its global SAF requirements in the 2030s. It would be the first synthetic SAF produced through the LanzaJet Alcohol to Jet (AtJ) process, developed by Illinois-based LanzaTech and the US Department of Energy’s Pacific Northwest National Laboratory (PNNL).

To create the fuel, fossil-free electricity would be used to develop hydrogen via electrolysis. Carbon dioxide and hydrogen would then be combined and converted to ethanol, and the ethanol would be transformed into electrofuel. Under the terms of the four-party agreement, Vattenfall would investigate fossil-free electricity supply, hydrogen production and carbon dioxide recovery; Shell would investigate fuel production and logistics, and be the electrofuel buyer; and LanzaTech would deploy its gas fermentation expertise to make ethanol from the input gas streams. The parties collectively would license the LanzaJet AtJ technology to convert the ethanol to electrofuel, and SAS would be a potential buyer of the fuel for use in its global fleet.

“The aviation sector faces incredible challenges getting the volumes of SAF needed for sustainable flight,” said Jennifer Holmgren, CEO of LanzaTech. “This project is the start of delivering on these volumes, and by reusing carbon dioxide and fossil-free power we have an opportunity for unprecedented scale. We need to rethink carbon, and together with fossil-free power, harness it to create a new climate-safe future for all.”

Anna Mascolo, President, Shell Aviation, said sustainable aviation fuel offered the greatest potential to reduce emissions from aviation. “It is only by working together today across the aviation ecosystem to drive the technologies and infrastructure needed to produce SAF at scale that the aviation sector can achieve net zero by 2050,” she said. “I am excited for this collaboration to explore one more pathway for SAF production.”

Added Vattenfall CEO Anna Borg: “This initiative shows the potential of cross-industry partnerships to drive the decarbonisation of a hard-to-abate sector, to innovate faster in order to bridge to fossil-free living within one generation. This is a really good opportunity, and together we will explore further how to produce low emission electrofuel for aviation.”   

SAS serves 90 destinations with a fleet ranging from turboprop ATR 72-600s to next-generation Airbus A320neos, A321LRs and long range A350s. “We are incredibly proud to be part of this unique project, where ambitious sustainability goals and agendas come together,” said Anko van der Werff, the airline’s CEO. “Our joint commitment in finding ways to enable large-scale production of a more sustainable aviation fuel is a fantastic opportunity to accelerate the commercialisation of SAF, and thus SAS’s transition towards industry-leading zero emission flights.”

The Vattenfall evaluation is one of four power-to-liquids projects currently being undertaken by LanzaTech, including a feasibility study with Carbon Engineering to evaluate the direct capture of carbon dioxide from the air and convert it to sustainable aviation fuel.

The announcement of the Swedish electrofuel initiative coincides with strong industry concerns about a lack of sufficient production and distribution capacity to meet growing demand for SAF, driven by airline sustainability objectives and escalating blending mandates in Europe.

The industry’s Air Transport Action Group, in its Waypoint 2050 report, has estimated 330-445 million tonnes of SAF would be needed globally for airlines to achieve their 2050 net emissions targets, but assessed only 180 million tonnes was likely to be available for aviation use. The report also forecast that between 5,000 and 7,000 new refineries would also be needed to meet SAF demand in that period.

SkyNRG, a major global provider of SAF, has separately estimated that for Europe alone to meet its current, escalating blending mandates, 300 new SAF plants would be required by 2050, each producing 100,000 tonnes of fuel per year. But the report said just 15 new plants were proposed for construction in Europe by 2027, requiring more than 10 new facilities each year between 2027 and 2050.   

Maarten van Dijk, Managing Director of SkyNRG, said demand for SAF production facilities provided a significant opportunity for infrastructure investors. He told GreenAir that global investors wanted to support the transition to low carbon energy and were seeking opportunities. “There’s an insane amount of money out there at the moment,” he said. “There’s just a shortage of investment-grade sustainable developments. Institutional investors have trillions to invest, and they need new future-proof industries. This is one.”

Photo: SAS

Boston Consulting Group (BCG) has announced an eight-year partnership with SkyNRG to purchase sustainable aviation fuel (SAF) for its business travel flights starting in 2022, so becoming the newest member of SkyNRG’s Board Now corporate programme. The move is in support of BCG’s commitment to achieving net zero climate impact by 2030 at the latest, with more than 80% of the organisation’s carbon footprint attributable to business travel. SkyNRG says the long-term agreement will support the development of a new SAF production facility in the Netherlands, which will produce 100,000 tonnes of SAF annually from sustainable sources such as waste oils when it eventually comes onstream, with BCG committing to purchasing existing supplies in the meantime. BCG joins Microsoft, SkyScanner, PwC and others as Board Now programme Leader – the highest membership level. It also recently joined the Sustainable Aviation Buyers Alliance (SABA) as a founding member.

“Lower-carbon air travel is a vital part of achieving our net zero goal, as well as the global climate targets. This partnership with SkyNRG will help to develop the global market for more affordable sustainable aviation fuel,” said Rich Lesser, CEO of BCG.

Both BCG and SkyNRG have participated in the World Economic Forum-led Clean Skies for Tomorrow (CST) coalition since 2019. SkyNRG is also part of WEF’s SAF Certificate (SAFc) pilot, which is aiming to develop a globally recognised accounting system for SAF (see article).

“It is great to see that BCG is at the forefront of making the aviation industry more sustainable as a member of our Board Now SAF programme,” said SkyNRG Managing Director Theye Veen. “With this long-term partnership, BCG enables the acceleration of the sustainable aviation industry, bringing us one step closer to making SAF the global standard in aviation.”

In June, BCG entered into an agreement with Neste for the purchase of SAF to be delivered to airlines SAS and Finnair, covering the volume of all flights taken by BCG employees in the Nordic region with these carriers. BCG is Neste’s first corporate client for its SAF-based solution in which Neste and its airline partners help organisations reach their emission reduction targets, and includes a third-party audit process to ensure other customers cannot claim emission reductions on the same SAF volume.

“The core value proposition of BCG is to connect our clients with the best global expertise and talent, whatever the business issue at hand might be. Next generation ways of working have opened up tremendous opportunities to accomplish this virtually. Yet some travel will be needed going forward in order to deliver the greatest value to our clients,” said Tuukka Seppä, Managing Partner of BCG Nordics. “This move is part of BCG’s global efforts to advance the path to lower-carbon travel and is an important step on our journey to net zero climate impact by 2030.”

BCG is the Consultancy Partner for the COP26 climate conference in November and has expanded its climate and sustainability capabilities by transforming its former Center for Climate Action into a global BCG Center for Climate & Sustainability, which brings together over 550 experts from across the firm.

In other SkyNRG news, the company is to partner with Dutch festival brand DGTL that will ensure all artists travelling to and from its international events by air will have their flight CO2 emissions reduced through SAF purchase.

“Working with SkyNRG, DGTL’s sustainability model once again provides a groundbreaking blueprint for other promoters and large-scale event organisers,” said DGTL, which claims to have solved other event sustainability issues around energy, water and sanitation. “This innovation is the final piece in DGTL’s overall sustainability puzzle. Furthermore, it is a scalable solution that can reduce air travel emissions for other events too where air travel may be unavoidable. DGTL’s festivals have a huge reach, which is why it is important we lead by example and plant the seed for change.”

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.

The ‘Fit for 55’ package is intended to help achieve an EU-wide GHG reduction target of 55% by 2030, compared to 1990 levels. 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. (See Figure 1 below.)

A few EU States have already implemented or are proposing a national blending mandate, with some more ambitious than the Commission’s proposal, which wishes to see EU-wide harmonisation. To meet both the EU-wide mandate and the additional volumes from national mandates, SkyNRG estimates this would require 3.5 million tonnes (Mt) of SAF in 2030, rising to 30 Mt in 2050. This compares with just 0.1 Mt of global SAF production in 2020.

“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.”

To achieve the rapid deployment of new SAF technologies and the required 300 SAF plants, Berg said: “All stakeholders will need to play their part to engage and address the challenges ahead – governments, investors, industry, and individual and corporate travellers.”

The report says that while up until 2027 the mandated amount of SAF in the EU can be fulfilled with European-based SAF production, this is provided currently announced renewable fuel capacity materialises. The increasing mandated SAF demand up to 2030 can be met with yet-to-be-announced SAF capacity, switching capacity from renewable diesel production or by importing SAF from outside the EU. Beyond 2030, new technologies such as gasification, alcohol-to-jet and power-to-liquids will have to be scaled up speedily but it is unlikely the targeted volumes can be met without structural imports of SAF or intermediate products needed for EU SAF production.

The assessment assumes EU countries adopting more ambitious mandates than those proposed stick to their decisions to create a national mandate ‘top-up’ and EU (excluding UK) jet fuel demand recovers to pre-Covid volumes in 2024, after which it remains constant at 47.4 Mt per year. Total anticipated mandated volumes for advanced biofuels and e-kerosene are 1 Mt in 2025, 3.5 Mt in 2030 and 30 Mt in 2050.

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. The implication of a substantial increase in imports carries both sustainability risks and heavy dependency on non-European countries in reaching short-term mandated volumes, cautions the report. Demand-side stimulation for SAF in other regions, for example the United States, will also increase demand for biomass and SAF volumes. On the other hand, a rapid electrification of road transport may increase available biomass and production capacity for SAF.

While the 2030 targets set out by the proposed EU mandate are still feasible, believes SkyNRG, it is the post-2030 targets that present a challenge, given the quadrupling of mandated volumes between 2030 and 2040 (see Figure 2 below). To assess the viability of meeting them, SkyNRG compared and built upon the analysis carried out by the Energy Transition Coalition under the World Economic Forum’s Clean Skies for Tomorrow initiative to develop a projection aligned with its own assumptions on a realistic growth scenario, rather than maximised EU production potential.

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.

SkyNRG says the analysis was conducted to inform its business strategy but the company was sharing the insights to enable other organisations to learn and potentially direct resources into growing the SAF industry, and intends updating the report every six months.

“We would like to invite all stakeholders, inside and outside the SAF supply chain, to provide us with your viewpoint and explore how to join forces to scale the SAF industry and decarbonise aviation,” commented the company.

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

Top photo: SkyNRG