Sustainability remains one of the foremost topics in aviation and indeed most believe that, for the industry to grow, it is crucial for it to embrace more environmentally-friendly concepts.
In 2009, the business aviation community, through its representative organizations, announced three goals to mitigate its effect on climate change: achieve carbon-neutral growth by 2020; improve fuel efficiency by 2 percent per year from 2010 to 2020; and reduce CO2 emissions by 50 percent by 2050 relative to 2005.
There are currently four pillars to which business aviation is pinning its hopes of meeting those stated goals: airframe and engine improvements and optimization; new air traffic control technology and procedures; market-based measures such as the purchase of carbon offset credits; and the adoption and use of sustainable aviation fuel (SAF).
“Without sustainable aviation fuels, we will not meet our goal,” said David Coleal, former president of Bombardier Aviation and the chairman of the General Aviation Manufacturers Association (GAMA) environmental committee. “And it actually has the biggest impact of any of the pillars we are talking about.”
An industry coalition—including GAMA, NATA, NBAA, EBAA, IBAC, and its newest member, the Commercial Aviation Alternative Fuels Initiative (CAAFI)—is dedicated to educating the industry of the use and benefits of SAF. Its recently released second edition guide to the renewable fuel entitled “Fueling the Future,” which serves as a clearinghouse of information on all aspects of the value chain. According to the coalition, the single-largest potential reduction in aviation’s greenhouse emissions will result from the broad adoption of SAF in place of the current fossil-fuel-based jet-A.
In September, replacing a live event that was to have taken place in March in Washington, D.C., the coalition held its first online summit, a two-day event that gathered together a constellation of experts encompassing all aspects of the industry including operators, legislators, regulators, fuel suppliers, and others for a quartet of panel discussions to determine how best and how quickly to ramp up the acceptance, demand, and supply for SAF.
Speaking during the event, Joel Szabat, the U.S. Department of Transportation’s assistant secretary for aviation and international affairs, noted, “In the first half of 2020, the aviation sector uplifted more than three million gallons of sustainable aviation fuel—a 100 percent increase over the entirety of 2019. So, to me, this is all the more impressive when you consider that this increase in fuel usage is happening against the backdrop of the Covid pandemic and the more than considerable reduction in aviation demand.”
One key point the industry continues to stress is that blended SAF is simply a drop-in replacement for conventional jet fuel, and its use is endorsed by aircraft and engine OEMs. “The airplane itself does not know the difference between sustainable aviation fuel and regular aviation fuel, but the environment does,” said NBAA president and CEO Ed Bolen, as he kicked off the online event.
One misconception about SAF is that its main environmental benefits stem from its use in aircraft. While SAF fuels do not contain sulfur—which, with traditional fuels, is released into the atmosphere in the form of sulfur oxides, a component of acid rain—“what’s lost on a lot of people is that the actual amount of CO2 coming out of the tailpipe is nearly identical to the amount of CO2 that comes out of the tailpipe for a plane flying on petroleum-based jet fuel,” explained Steve Csonka executive director of CAAFI.
He added that the difference lies in the benefits inherent in the production of each, which could potentially result in CO2 emission reductions of more than 100 percent over the life cycle of the fuel. “Fundamentally, this is what we’re talking about. Instead of continuing to pull carbon molecules out of the ground, burning them, and turning them into additional CO2 in our atmosphere, what we’re trying to do is pull carbon molecules out of our biosphere from different plant matters and recycle those carbon molecules so that in the long run, we abate or even potentially reduce the amount of carbon that we’re exposed to in our biosphere.”
As such, the industry’s task is to advocate SAF usage and demand to spur increased production and investment in new facilities, which will help bring prices down, according to Michael Amalfitano, president of Embraer Executive Aircraft. He also believes it is his company’s role as an aircraft manufacturer to educate its customers on the use and benefits of SAF.
Gulfstream, like most other manufacturers, concurs, announcing in mid-September that it had renewed its SAF supply agreement with World Fuel Services for another five years. The companies signed the first such multiyear purchase agreement in business aviation back in 2015.
The fuel—produced by World Energy at its refinery in Paramount, California, from a feedstock of agricultural waste, fats, and oils—powers Gulfstream’s Savannah, Georgia-based fleet, including corporate, demonstration, completion, customer support, and flight-test aircraft. SAF is also available to customers at its Van Nuys and Long Beach, California service centers and the OEM plans to have it on hand at its new Farnborough Airport facility in the UK as well.
“Reducing our impact on the environment by using SAF is a move we should all consider making,” said company president Mark Burns, adding he believes customer awareness and interest in the fuel is growing rapidly.
With that awareness comes other misconceptions, however—possible damage to the aircraft and increased microbial growth in fuel tanks, all of which have been addressed and/or debinked by the experts and OEMS, leading some to believe that more industry education on the topic is required.
One current hurdle faced by SAF is its higher price than standard jet-A, due to its limited availability. “As we can see, the current low supply obviously leads to higher prices. That's not different than any other segment,” said Amalfitano.
This price differential has been exacerbated of late by the overabundance of conventional jet-A due to the drastic reductions in commercial airline schedules as a result of the Covid pandemic. The price per barrel of crude oil plummeted from more than $60 dollars per barrel, actually reaching negative territory before somewhat stabilizing at around $37 at press time. Yet experts believe this is an aberration and those in the sustainable fuel industry say this is not hindering their current efforts to increase the supply of SAF.
The industry continues to develop new pathways for the production of SAF, with seven currently approved. The most recent, this summer from Japan’s IHI Corporation and that country’s New Energy and Industrial Technology Development Organization, involves the use of microalgae as a feedstock. Other low-competition sources currently involve used cooking oil, plant oils, municipal solid waste, waste gases, sugars, purpose-grown biomass, and some crops and agricultural residues.
According to Czonka, at least 15 more processes are in the pipeline toward earning ATSM D7566 (the specification for jet fuel) certification, which will continue to expand the available supply of the renewable fuel. “By 2026, production should top one billion gallons annually, but still represents only 1 percent of demand,” he said.
Last November, Shell Aviation announced it would support its long-term strategic partner SkyNRG in the development of the first dedicated SAF production plant in Europe. The fuel company will provide technical and commercial expertise to the DSL-01 project in Delfzijl, Netherlands, which is slated to be commissioned in 2022. The plant will produce 100,000 tonnes of SAF a year, corresponding to a reduction of lifecycle CO2 emissions of approximately 270,000 tonnes. Combined with the green production factors, the lifecycle carbon emissions for the fuel produced there will be around 85 percent lower than that of conventional jet fuel.
And, in August, Phillips 66 said it is planning to fully convert its San Francisco Refinery in Rodeo, California, from crude oil processing to renewable fuels, using feedstocks such as used cooking oil, fats, greases, and soybean oils. Combined with the production of renewable fuels from an existing project in development, the output could surpass 800 million gallons a year, making it the largest such facility in the world, with production slated to begin in 2024.
Neste’s current SAF production is 34 million gallons, but due to an expansion project at its Singapore refinery, along with upgrades to its Rotterdam facility, the Finnish company could have the capacity to produce almost half a billion gallons of SAF annually by 2023.
While Gevo currently produces 100,000 gallons a year of SAF at its facility in Silsby, Texas, by early next yeat it expects to round that number out to one million gallons, and by 2024 to 40 million gallons a year.
World Energy is currently investing $1 billion into its facility in Paramount, California, and by late 2022 it will increase its total capacity of 25 million gallons a year to approximately 150 million gallons a year of neat (unblended) SAF.
While those increases in production volume sound impressive, they still fall short as far as what will be required, according to IBAC director general Kurt Edwards. “We have a global aspirational goal to halve our emissions by 2050, compared to 2005 levels. We know we have to make a transition away from fossil fuels, towards sustainable fuels that can be used with current equipment,” Edwards said during September’s two-day summit. “SAF is going to be a critical technology to help us achieve that goal; to get there, we may need as much as 500 million tons of SAF per year for the entire global system.”
The industry has had a series of sustainability milestones since a January 2019 SAF event at California’s Van Nuys Airport, which marked the first time SAF was made available to business aircraft at a public airport. Along with education sessions, it included demonstration flights on Gulfstream, Bombardier, and Embraer aircraft powered by the SAF fuels produced by World Fuel and Gevo and provided by World Fuel Services and Avfuel respectively and distributed to the four FBOs on the field. A series of demonstrations followed, including a similar industry-wide education event ahead of 2019 EBACE held at the UK’s Farnborough Airport, where business aircraft heading to the Geneva show could fill up for what was billed as the largest industry fly-in powered by SAF.
In January, the World Economic Forum, an event that typically attracts global leaders and hundreds of private aircraft flights, was chosen as another demonstration, with SAF available to fuel departing aircraft at Zurich Airport. The occasion was used to also educate operators to the payment and credit transfer concept of book-and-claim, where those wishing to use SAF can purchase it, even at airports where the actual fuel is not available.
While they would pay for the fuel, including any price differential, under the book-and-claim scheme, the actual “molecules” would be dispensed to another operator at an airport where the fuel is available, while the purchasing user would receive the credits under whatever carbon reporting system they operate under, through a strictly-accounted procedure intended to prevent double crediting of the SAF use.
California has become a hotbed for sustainable fuel usage due to the state’s Low Carbon Fuels Standard (LCFS), which aims to reduce the carbon intensity of fuels burned in the state and incentivize through taxes and credits the production and distribution of low life-cycle carbon emission fuels. On the production side, the LCFS provides a credit that enables them to offset the production cost and, in addition to that, provides a rebate or discount to the consumer.
“We have to look at the market that we can distribute the product into,” said Chris Cooper, Neste’s v-p for North American renewable aviation. "And in this case, California provides the best scenario for rebates and incentives to bring the price point down to the end-user or the pilots buying fuel.”
As a result, much of the SAF and other sustainable fuels produced in the U.S., and even the world, are finding their way to the Golden State. “That's what's creating the value in the marketplace that is unique to California,” Graham Noyes, executive director of the Low Carbon Fuels Coalition, told AIN.
“Some of these very low carbon fuels like sustainable aviation fuel can be all the way down to the point where they're reducing 70 percent of the greenhouse gasses, they have a carbon intensity score of 30 there and for a fuel like that," he explained. "Depending on the credit price, that fuel could be getting $1.50 to $2 [per gallon] of crediting coming from the LCFS program.”
Factor in any other local low-carbon incentives and it builds to the point where many producers would be willing to ship sustainable fuel across the country or even overseas to California for sale. Oregon, which has a much smaller aviation market, has adopted a similar standard, and measures were being considered by the Washington and New York state legislatures before being derailed by the Covid pandemic in March.
“It would be a major breakthrough to have it first of all in New York,” said Noyes, “but also to then have that kind of policy structure in the Northeast where New York is obviously a leader. To the extent that policy gets established there, there’s a good opportunity for other states in the area to learn more about the policy, see how it works, and potentially adopt it as well.”
Cooper explained there currently only exists local or regional legislation to promote the use of SAF, and he says there need to be federal policy incentives established as well to support and incentivize the industry’s growth across the country.
“More than likely the most efficient would be some form of tax rebate that could be applied federally,” he told AIN. “In which case, when you're producing product in the Midwest or you're producing in the Northeast, it should stay [there] because the federal government is helping us do so. I think we need to concentrate on how business aviation can help promote sustainability and extend that to their passengers so that we can work together in Washington D.C., to be sure that we have incentives that properly help us create value or identify the value in SAF.”
The Atlantic Council, a non-partisan think tank, recently published its own white paper, "Sustainable Aviation Fuel Policy in the United States: A Pragmatic Way Forward," in which it outlined a list of initiatives that would need to be promoted to establish a viable SAF market and even the playing field against conventional petroleum fuels. Among them are establishing a SAF specific blender’s tax credit to encourage fuel production and escalation into the fuel supply; providing an excise tax exemption from the Airport and Airways Trust Fund’s domestic commercial fuel tax to reduce the current price gap with fossil jet fuel; and improving SAF’s credit generation level by updating the fossil fuel emissions baseline that SAF is compared against.
In July, Neste announced that it had begun shipping Texas-finished SAF to California for delivery via a standard multi-product pipeline instead of truck to San Francisco International Airport (SFO) for airline use. That was followed in September with an announcement of a partnership between Neste and Signature Flight Support consisting of an offtake agreement of five million gallons to establish “permanent supplies” of SAF at SFO and the UK’s London Luton Airport, marking Signature as the largest FBO purchaser of the sustainable fuel. As part of the deal, NetJets agreed to the purchase of three million gallons of SAF, covering all of its flights from SFO and from its Columbus, Ohio headquarters as well, using book-and-claim in the case of the latter.
In addition, global operator VistaJet recently announced that, as part of its Sustainability in Aviation pledge, it has signed an agreement with SkyNRG to create a voluntary program that allows customers to specify if they wish to pay for the volume of SAF consumed in their flight, which is then distributed elsewhere through a book-and-claim mechanism.
Jet Aviation, which supplies SAF at its Van Nuys facility and provided SAF during the World Economic Forum demonstration event, is looking to establish permanent supplies of the fuel at its Swiss locations and then expanding it into its Netherlands FBOs, according to company president David Paddock. He also serves as this year’s chairman of GAMA.
Paddock alluded to a new legislative initiative from the European Commission known as ReFuelEU Aviation, which will be launched by the end of this year to help spur supply and demand for sustainable aviation fuels in Europe. Though some countries such as Norway have already initiated quota mandates on the use of SAF, the EC noted that “while sustainable aviation fuels have the potential to significantly reduce aircraft emissions, this potential is largely untapped as such fuels represent only 0.05 percent of total jet fuel consumption.” The EC concluded, “The present production and use of SAF in the EU is still negligible.”