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Greener Skies Ahead


How sustainable aviation fuel is transforming the industry’s high carbon reputation

 

As part of our Aviation Investor Forum Series, Goodbody hosted industry leaders Thomas Fowler, Ryanair Head of Sustainability, Bryan Stonehouse, Head of Sustainability and Risk, Shell Aviation, and Fatima da Gloria de Sousa, Head of Sustainability, Air France KLM, to discuss how sustainable aviation fuel is being used to decarbonise the industry. Here we explore our top five take-aways from the aviation sustainability webinar. 

For more information, or to attend future events in the Aviation Investor Forum series, please contact [email protected] 

1. The sustainability agenda is set to transform the aviation industry

Sustainability has emerged as a megatheme across all sectors, but perhaps none more so than aviation. As one of the world’s leading polluters, society is no longer willing to accept that aviation has the license to operate as it currently does, making systemic change necessary.

Thankfully the industry and its customers are embracing this challenge. Our panellists shared details of a raft of partnerships, collaborations and projects aimed at solving the sector’s unique challenges as it strives towards a net zero future.

Meanwhile, the industry is seeing growing support from its customers, particularly from corporate clients who themselves are looking to decrease their scope 3 emissions1 and are looking at their business travel and cargo footprints.

2. Sustainable Aviation Fuel is the industry’s primary tool in reducing emissions

Sustainable Aviation Fuel (SAF) is a low carbon jet fuel, produced from biomass and waste feedstocks, lowering its carbon lifecycle. 

SAF can be used and mixed interchangeably with standard jet kerosene, simplifying its integration into existing systems and infrastructure. This is pivotal in ensuring that it can be adopted at scale without requiring parallel infrastructure to be developed.

Many SAF projects are up and running, with several global airports already incorporating SAF into their fuel pool. While the most mature technologies tend to use waste oils and fats, more advanced biofuels and even synthetic fuels are being developed at pace and will be available at scale in the coming years and decades.

3. Achieving sustainability at scale

While SAF constitutes less than 1% of global supply today, all of our panellists predict that this will grow significantly over the next 10 years to become a substantial part of the supply mix. 

Europe, a leader in the adoption of SAF, is expected to reach 5% SAF in 2030 and 20% by 2035. Meanwhile, the US is making meaningful progress and supportive policies are being adopted all around the world.

Given the flexibility of SAF solutions, everywhere in the world has something to bring to the table, depending on the innate availability of feedstock and technology options.

4. Government support needed

While the industry is making strides towards a more sustainable future, there is a clear role for governments in smoothing this transition.

The high current cost of SAF compared to regular jet fuel means that further price mechanisms will be needed to close this gap and increase adoption.

However, while pricing schemes can serve a purpose, it is important that any money raised by governments through taxation is reinvested into the industry and not extracted for other purposes. 

Over time, our panellists hope to see cost improvements as projects begin to scale, however government subsidies or capex funding for new projects will be important in overcoming high initial costs.

5. Sustainable Aviation Fuel is one piece of a complex jigsaw

While SAF is viewed as the main decarbonisation tool for the next 30 years, all of our panellists acknowledged that it is just one part of the solution as the industry transitions to net zero. Alternative forms of aircraft propulsion, efficiency and fuel performance are all important factors, with different technologies and solutions expected to come online in the short, medium and long term.

Electric planes, hydrogen planes, more efficient engines, lighter aircraft and improved operational efficiency will all need to go hand in hand with SAF to play their part in a more sustainable aviation industry. 

1Greenhouse gas emissions are categorised into three groups by the Greenhouse Gas Protocol. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain.

 


To learn more about Goodbody’s research coverage of airlines and the travel industry, click here.

 

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