Sustainable aviation fuels are crucial for global Net Zero

The aviation industry is a hard-to-abate sector, contributing between 2.5 per cent and 3 per cent of global carbon dioxide (CO2) emissions. Decarbonisation can be achieved by adopting three environmentally friendly fuels: Sustainable aviation fuel (SAF), hydrogen and electric power. Among these, SAF is the most promising due to several advantages. It is compatible with existing engines without modifications, can power long-distance flights unlike electric options and offers reduced greenhouse gas emissions over its life cycle.

In October 2016, United Nations’ agency International Civil Aviation Organization (ICAO) introduced the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This scheme requires aircraft operators to monitor their emissions and offset any excess emissions, using 2019 emissions levels as the baseline for comparison.

The greenhouse gas emissions for crude-based aviation turbine fuel are set at 89 grammes of CO2 equivalent per megajoule, stated a report by the Energy Transition Advisory Committee, under Union Ministry of Petroleum & Natural Gas, titled The Green Shift. To qualify as a CORSIA-eligible Fuel (CEF), any SAF must reduce emissions by at least 10 per cent, achieving less than 80.1 g of CO2 equivalent per megajoule. Additionally, CEF must not be derived from biomass sourced from land with high carbon stock.

CORSIA includes two voluntary phases: the pilot phase from 2021 to 2024 and the first phase from 2024 to 2026, followed by a mandatory phase starting in 2027, according to global airline trade association International Air Transport Association’s (IATA) Sustainable Aviation Fuel Roadmap.

The aviation industry consumed approximately 0.5 million tonnes of SAF in 2023, at a cost of $2,500 per tonne, which is double the amount produced in 2022 (0.25 million tonnes), according to IATA Annual Review 2024. These are promising numbers, but a lot more needs to be achieved. This consumption represents 0.2 per cent of the global jet fuel use. The price per unit of SAF is 2.8 times higher than that of conventional aviation fuel, resulting in an additional $756 million in fuel expenses for the industry in 2023.

SAF is typically estimated to be about 3-5 times more expensive than traditional jet fuel, primarily due to limited production facilities and guaranteed demand driven by mandated policy targets. Costs are expected to decrease over the coming decades as technologies advance and the industry achieves economies of scale. Additionally, long-term costs will be partially offset by more fuel-efficient aircraft designs and revenue from carbon reduction savings.

A potential solution could involve implementing a fossil fuel surcharge, which would be used to subsidise the price difference for SAF. This approach could be designed like the feed-in tariff approach used in the German electricity sector from 2000 to 2022. Under this system, electricity consumers paid a surcharge to promote investment in renewable energy production. As a result, the proportion of electricity generated from renewable sources in Germany increased to over 45 per cent by 2020.

One advantage of this surcharge is that it distributes the cost burden evenly among all users. Secondly, subsidies for investments or loan guarantees for SAF production facilities could be introduced to lower capital expenditure costs.

Approximately 80 per cent of the SAF projected to be produced in the next five years is expected to be derived from hydrogenated fatty acids (HEFA), which use feedstocks like cooking oils and animal fats, both of which have limited supply. Moreover, most of this feedstock is being used for biodiesel production. Promoting research and development in the other eight approved technology pathways could open up access to more plentiful and cost-effective feedstocks, such as agricultural residues, dedicated energy crops, algae and municipal solid waste.

Currently, both supply and demand for SAF are concentrated in developed economies. To meet rising demand for air travel in emerging and developing economies, technical assistance and capacity building will be required to accelerate the availability and use of SAF.  This assistance may allow these economies to expand their SAF industries by utilising domestic natural resources, such as biomass.

Adoption of global sustainability standards may improve transparency in SAF environmental claims. This could provide a clear and consistent foundation for evaluating and verifying SAF’s sustainability, which is critical for investors, consumers and regulatory agencies.

Because different countries or organisations have different criteria and guidelines, harmonisation may aid in the development of a unified set of standards that can be universally recognised and applied. This will aid in avoiding confusion, streamlining certification processes and facilitating international trade in SAF. Producers of the fuel can improve their access to international markets by adhering to globally recognised standards.

It ensures that SAF meets the requirements of various regions and airlines, thereby encouraging wider adoption and use. Furthermore, physically transporting SAF to every airport and ensuring its use on specific flights has proven to be difficult and costly.

The book and claim strategy implementation could allow SAF to be produced and used where it is most convenient, while the environmental benefits can be claimed elsewhere, according to The Green Shift. It enables airlines to financially support SAF development without requiring costly changes to supply chains or fuel infrastructure at each airport.

The scenario in India

While the aviation industry currently accounts for less than 1 per cent of India’s total emissions, it is one of the fastest-growing economic sector. India is the world’s third largest aviation market. Although the HEFA route is currently the most cost-effective option for widespread SAF adoption, India faces a challenge due to the scarcity of used cooking oil.

In contrast, the alcohol-to-jet pathway appears more viable due to the abundance of feedstocks, the ability to modify existing sugar and ethanol plants and its overall commercial viability. Furthermore, central government’s E-20 programme is expected to increase ethanol availability. India should also explore alternative feedstocks, such as bamboo, which are plentiful in the region.

Deploying SAF to reduce carbon emissions in aviation is currently the most practical and immediate solution. To accelerate its global adoption, it is crucial for all relevant stakeholders to collaborate and work together. This includes governments, airlines, fuel producers and industry organisations, all of whom must join forces to overcome barriers, streamline processes and promote the widespread use of SAF.