High SAF demand, low supply impede smaller airlines

The limited availability of sustainable aviation fue l could be a disadvantage for smaller airlines trying to achieve decarbonization goals. Sustainable aviation fuel (SAF) is three to five times more expensive than fossil jet fuel and is not readily available to all airlines because it is not produced as easily — or as quickly — as demand dictates. [caption id="attachment_71169" align="alignright" width="300"] Photo/Canstock[/caption] For example, a projected 450 billion liters of SAF will be required to meet sustainability targets by 2050, according to The International Air Cargo Association (TIACA) , which is only possible with government incentive programs. This is a lofty goal – and one that leaves many questions. SAF production must significantly increase if the aviation industry hopes to achieve its targets of reaching 65% SAF and net zero 2050, per the International Air Transport Association (IATA), which was a nnounced in October . But could SAF’s cost and scarcity be stifling the little guys from reaching that goal? Major cost factors Finland-based Neste, one of the largest suppliers of SAF in the industry, has created SAF produced from waste such as animal fat and vegetable oil, which it supplies to more than 50 airlines. The company suggests it is a carrier’s location and the cost of product that matters, rather than company size, when it comes to competing for SAF. “Fuel is a major cost factor for airlines, which are still recovering from the pandemic,” Neste spokesperson Jorrian Dorlandt told Air Cargo Next . “So, this might be a factor." “Note also that some countries have significant incentives which help close the cost gap to fossil jet fuel — such as the [U.S.], in particular, California, the U.K. and [the Netherlands] So this makes it easier for airlines who buy fuel in those countries to buy SAF.” Price is a crucial factor, as Dorlandt pointed out, so large companies could have priority access to SAF. Production must increase to hit targets Nippon Cargo Airlines (NCA) , a relatively small cargo carrier with a fleet of 15 freighters, began using Neste’s SAF for the first time in December 2022 for flights from Amsterdam to Milan. NCA President for the Americas Shawn McWhorter told Air Cargo Next that cost and quantity are the most significant challenges for smaller airlines seeking SAF. “SAF is not readily available in the quantities and locations to support any airline,” he said . “The cost of the operation is higher. SAF does not have a CO2 offset, so it is offset with other industries.” Dimitri Bettoni, head of cargo network and product development at Brussels Airport (BRU), agrees. “There are still two main challenges regarding SAF,” Bettoni previously told Air Cargo Next . The first is its availability. “It is not yet available in large quantities; there must be sufficient raw materials and production capacity,” he said. The second is its which will evolve as supply and production capacity increases, he noted. Yet, SAF is one of the only available fuels that reduces emissions and creates a greener space in the aviation industry. “SAF is widely acknowledged as a key element to helping aviation achieve emissions reduction targets,” Neste’s Dorlandt said. “SAF currently represents only around 0.1% of total global jet fuel consumption, which means we have a long way to go and need to ramp up SAF production capacity urgently.” Looking ahead Demand for SAF will rise in the coming decades, meaning more competition among airlines. “When you consider that in 2022 the current infrastructure produced 125 million liters (33 million gallons) [of SAF], the same investment programs that are in place now ... will expand to 5 billion liters (1.3 billion gallons) capabilities by 2025,” Glyn Hughes, director general of TIACA , said in a news conference this week. T he Inflation Reduction Act of 2022 is a federally funded initiative which allocated grants towards sustainability. It allotted $297 million to the Department of Transportation for the development of SAF. While this is a significant step towards greener travel, it is not enough to set the i ndustry up to reach net zero in the next few decades. “Unfortunately, by the year 2050, the industry will need 450 billion liters (118 billion gallons),” Hughes said. "So, there is a significant gap that is only going to be bridged if government incentive programs start now.”

High SAF demand, low supply impede smaller airlines

Industry will require 450B liters of sustainable fuel by 2050

Freighter Aircraft Transactions in February 2023

Cathay Pacific Cargo revenue dropped 16.6% in 2022

Related Posts

Engine scarcity, maintenance backlogs worry freighter operators

ATSG chief executive says company aims to transform, modernize fleet

Global airfreight community: Geopolitics poses greatest threat to industry

Cathay Pacific Cargo revenue dropped 16.6% in 2022

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password