United Airlines is the biggest aviation biofuel buyer while Neste dominates production
In 2019, worldwide commercial airlines consumed 98 billion gallons of fuel, amounting to 2.4 percent of global emissions. When the pandemic hit, air travel aviation emissions dipped temporarily to their lowest level since 1997. Over the coming decades, however, passenger demand will likely surpass pre-pandemic levels.
Aviation fuel is a complex blend of various petrochemical derivatives: alkenes, alkanes, branched alkanes, and aromatic hydrocarbons. Jet fuel is a particular kind of aviation fuel based on kerosene. Apart from carbon, all of these release nitrous gases, soot, sulphate, water vapour, and particles to the atmosphere. Unit for unit, some of these substances have greater planetary warming potential than carbon.
Even if climate laws and consumer shifts lead to more permanent shrinkage in commercial air travel, and that’s a big if, aircraft will likely remain an important element in the global transport network. Under any climate mitigation scenario, developing sustainable fuels are a must. Here is the latest on developments in the sustainable aviation fuel industry.
Aviation fuel regulation
The biggest step towards carbon accountability in the airline industry came in 2016 when the International Civil Aviation Organization (ICAO) published rules for aviation companies on monitoring, reporting and verification their carbon emissions. Their report included methods for calculating the carbon efficiency of fuels. All states belonging to the organisations agreed to make their airline operators offset any emissions above their 2020 levels from 2021. The 2016 scheme by the ICAO allow airlines to avoid buying up carbon offsets is they opt for lower carbon fuels.
On the legislative side, the European Parliament in July 2022 approved draft rules to force airlines to use a minimum of 2 percent sustainable aviation in their kerosene fuel, rising to 85 percent in 2050. In 2018, less than 0.01 percent of aviation fuel globally came from alternative sources. Once passed, these laws – part of the EU’s wider ReFuelEU iniative – will be the first of their kind in the world.
To date, the standards organisation ASTM International has certified seven possible biobased aviation fuels that deliver the performance characteristics of petroleum jet fuel if blended to a specific ratio. A further three are being assessed. The table below shows these potential replacements for petroleum aviation fuel.
Nonetheless, there is still disagreement over what constitutes a green fuel. They could include biobased fuels from recycled waste and carbon fuels from waste-processing gas, but also from more contentious sources such as food crops and palm oils.
Discussions around EU draft rules approved in July 2022 ran up against these definitional problems. Green MEPs rejected it on the grounds that recent amendments included Palm Fatty Acid Distillate, a by-product of the palm oil refining process, category 3 animal fats used as pet food and industrial ingredients, and “intermediate” crops grown outside the primary growing season but could still supply human nutritional needs.
The ecological MEPs who rejected July EU draft amendment’s definitions of sustainable aviation fuel (SAFs) want a narrower definition of sustainability that assesses fuel impacts over its entire life cycle. Palm oil, animal fats, and intermediate crop feedstocks fall short from this standpoint. Although they may be renewable sources, certain soils release large amounts of carbon when disturbed for cultivation. They also displace human food crops.
Researchers tend to side with the dissenting MEPs, concluding that the sustainability of SAFs depends on the amount of land and ecosystem services sacrificed to produce it. Palm oil often entails destroying peatland in Southeast Asia, a habitat that sequesters high levels of carbon. SAF feedstocks with the lowest estimated carbon emissions are agricultural residues, forestry residues, and municipal solid waste with molasses, industrial flue gases, and used cooking oil classed at ‘medium’ emissions risk.
Massive increases in production are in order if aviation is to reach net-zero by 2050, a commitment made by the International Air Transport Association approved in 2021. Concretely, by 2030 there needs to be 23 billion litres of SAF made per year. In 2021, 100 million litres were made.
SAF production on this scale will be a first for the biofuels industry. One producer, Finnish refiner Neste, is stepping up to net-zero production demands. It is currently top SAF Producer in terms of both output and capacity. In March 2022 it announced a billion-dollar investment joint venture with US oil company Marathon Petroleum to become the world’s first and only renewable fuels producer.
Their fuels meet ASTM 7566 requirements which sets down performance standards for aviation turbine fuels containin synthesised hydrocarbons. The majority of their feedsotkck is waste and residues: used cooking oil, animal fat waste, and other waste and residues from vegetable oil processing.
Neste’s trademark SAF is already used by major airports including Heathrow London, San Francisco International Airport, and Narita International Airport in Tokyo. KLM, Lufthansa, Delta, American Airline and cargo carriers count among existing clients. The fuel reduces GHG emissions by up to 80 percent, according to a life-cycle assessment calculated with CORSIA methods, compared to fossil jet fuel. Neste plans to increase its current 100, 000 tons of SAF per year to 1.5 million tones (1.875 billion litres) by the end of 2034.
World Energy, based in Boston, has become a serious contender in high-volume SAF production. It is expanding production in California and recently became the leading supplier for United Airlines flights out of LAX.
Approaches to boosting SAF production and uptake
Aviation is a sector where there should be near-perfect conditions for rapid biofuel scaling. On top of the sheer weight of its carbon impacts, the industry stands out for established international organisations, tight relationships with national governments, and its high economic worth.
In the UK, a £15 million funding competition called Green Fuels, Gren Skies opened to UK SAF projects between 2021 and 2022. It targeted early-stage UK SF plants. In 2022, a further £165 million was announced and applications for financing awards are open to SAF projects. These funding runs are part of the UK’s domestic aviation commitment to net zero emissions by 2040 and all English airports to be zero emission by the same year.
Spain, which has the second largest aviation sector in the EU after German, has seen airlines work with the government on SAF use through the Bioqueroseno initiative. Since the early 2010s, it has promoted SAF roll out and brought together stakeholders across the SAF value chain including the airlines Iberia, Airbus, Repsol, and Cepsa. In August 2021, Repsol became the first airline company to produce a batch of biojet obtained from waste. The batch consisted of 53000 tons of sustainable fuel that avoids emission of 300 tons of carbon. In summer 2022, Repsol used this biofuel for the first time on a flight route from Madrid to Washington with a 288 passenger capacity aircraft. In June, Repsol used the biofuel on a Madrid to San Francisco route. Repsol is planning to continue its biofuel production through a $200 million investment in a 250, 000 ton per year capacity biofuel plant, the first of its kind in Spain.
The German government is also collaborating with the aviation sector for SAFs, but their focus differs from the Spanish and UK models. The German project aims at cutting emissions associated with the production rather than the extraction of fossil-based fuels. To this end, it will develop and scale kerosene-based jet fuel manufactured using renewable electricity, hydrogen, and carbon dioxide. The German government will also enforce a binding minimum quota on the resulting fuel and a purchase obligation to overcome reticence around higher costs.
Much of the activity around SAF scaling in the US is being driven by the private sector. Currently, US demand for SAFs exceed supply and so it is common to see airlines using offtake agreements that contract suppliers to produce SAFs in instalments. Among the notable players are American Airlines, which has purchased 131 million gallons of SAF. It has also invested $100 million in Breakthrough Energy Catalysts, a multi-sector collaboration for SAF R&D. Delta is contracted to buy 260 million gallons with five different companies.
As significant as these orders are, they pale in comparison to the 2.4 billion contracted by United Airlines, currently the world’s largest SAF purchaser by volume. One of United Airline’s suppliers is Neste. Recently, the two companies reached a deal to procure 52.5 million gallons for United flights at Amsterdam’s Schiphol airport over the next three years. United Airlines is also a world leader in SAF R&D investment, piling $40 million into this field in 2019.
Technical advances in scaling sustainable aircraft fuel, regulatory enforcement, and behavioural changes among consumers will all be necessary to minimise the impacts of this most carbon-intensive of industries. More stringent environmental regulations on the aviation sector will be the most important factor in spurring largescale shifts towards greener air transport. This would rapidly incentivise high-volume demand for green fuel, accelerating chemical innovations and scaling.