It’s almost a year since International Air Transport Association (IATA) member airlines committed to net-zero emissions by 2050. The airlines’ commitment wasn’t only because of customer demands, but also due to the demands of investors. The journey to net-zero will be facilitated by a combination of advanced technology, carbon offsetting, new infrastructure, operational efficiencies, and, of course, sustainable aviation fuels (SAF). But it’s not only the airline operators’ policies that will make this possible or not. As we know, the availability and affordability of SAF will have a huge impact on uptake, so it’s vital that governments weigh in behind the industry to encourage production and distribution.
Throughout the world, we can see many exciting SAF production facilities emerging. For example, in Singapore, a major construction project by Neste is seeing it almost double the capacity of its renewable diesel facility to start producing SAF. Currently, Neste produces 100,000 tonnes of SAF per year at its facility in Finland. This makes up around 50% of the current global supply. It is predicted that by mid-2023, Neste’s Singapore plant will produce up to 1 million tonnes of SAF per year. The company is also raising output at its Rotterdam facility to 1.2 million tonnes from 2026. This is all great news for the quest for net-zero emissions. But it remains to be seen whether or not SAF can be produced quick enough to support the projected global demand.
To ensure the demand is met, governments must incentivize SAF production. We have seen governments all over the world give grants and other incentives to encourage investment in other green industries such as solar and wind power— so why not SAF production too? The aviation industry can make commitments but without this governmental pressure and the fluid supply chain necessary, it won’t be able to convert fleets to SAF. According to IATA, airlines have committed $17 billion in future SAF purchase agreements, so investing in and producing SAF is a win-win. With a huge market waiting in anticipation, I hope more energy companies and investors are beginning to focus on SAF production… A green industry to help achieve greener flight.
For more Executive Insight, visit UAS Blog