There is a faint green light in the distance. The light appears a long way up a steep hill and we don’t have all the equipment needed to navigate our way. But there is a light nonetheless, and we do need to get there. The question is whether we can get there in time.
SAF Investor 2024 saw people and businesses spanning the aviation, energy and finance industries come together under one roof to discuss, debate and explain the issues facing the development and production of sustainable aviation fuel (SAF). Why? Because aviation must reach NetZero by 2050.
2050 may feel a long way off – we have 26 more years of technological development and innovation to go – however 2050 is not the only goal on the roadmap to decarbonisation. Governments and international aviation bodies have committed to meet additional targets to ensure aviation keeps on track. In Europe for example, regulations have been enacted to oblige aviation fuel suppliers to have minimum 2% share of SAF from 2025 with this increasing progressively to 70% by 2050. In the US the goal is to increase SAF production to 3 billion gallons per year by 2030.
And where are we at today? The SAF currently in production can only cater for 0.5% of all flights globally. All delegates agreed there is a big hill to climb.
Amongst the debate and, at times, a blame game regarding who should be investing into SAF, there were positive takeaways from SAF Investor 2024:
Demand
While many delegates believed the price of SAF needs to be reduced for appetite to rise, it was clear that jurisdictional mandates requiring SAF use and production were forcing demand. Where mandates were seen as the stick, incentives such as the US Inflation Reduction Act (which has created a range of substantial tax credits), are the carrot to create and produce SAF on commercially viable scales. Whether the carrot or the stick is used, each creates and incentivises demand which is the driver for investment houses to take risks on SAF industry funding.
Alcohol to jet fuel (ATJ)
ATJ may be the holy grail of achieving sufficient SAF production. ATJ can be originated from a mixture of feedstocks which allows it the potential of significant global reach using a clean and efficient process. However, ATJ faces hurdles: firstly, while the EU may be the jurisdiction with the highest short-term targets for SAF use, it also places the most restrictions on which feedstocks can be used, impacting commercial scales of ATJ production. Secondly, the carbon intensity of ATJ feedstocks (such as corn) is higher than others, meaning it is not the most sustainable option at this point in time. As was repeated throughout the conference – best is the enemy of good – and while ATJ is not perfect at the moment, it is a great option to meet short term SAF targets.
It is a global movement
The need to move to a more sustainable future which includes SAF is not just a US and European mission. Globally governments and aviation bodies are working to achieve the 2050 net zero goal. This diversity not only allows potential feedstocks for SAF to be based on a wide range of geographies and technologies, but also creates competition. Further, global production of SAF is an absolute necessity for aviation as transporting SAF has its own carbon footprint. India and China are just some of the key jurisdictions looking to invest and encourage production and development of SAF facilities and technology.
The aim of the inaugural SAF Investor was to bring the people and industries needed for commercial scale SAF into one room and discuss the challenges they faced. This was achieved and there was no doubt that misconceptions and frustrations were laid bare. There is still a long way to go but we are starting the ascent and the light at the top of the hill shines a little brighter. Here’s to SAF Investor 2025!
