This summer, IAG Cargo partnered with renewables firm Neste to launch its first net zero carbon charter chain using the company’s sustainable aviation fuel (SAF), which cuts net carbon emissions by 80 per cent versus fossil jet fuel. We speak to Jonathan Wood, Neste’s Vice President for Renewable Aviation about the future of renewable energy and how policy and widespread adoption will pave the way to a sustainable aviation sector.
How did Neste develop its sustainable aviation fuel?
Neste is traditionally an oil refining and marketing company, focused in the Nordic markets, particularly in Finland. In the early 2000s, we developed expertise around recycling waste products as raw materials for the production of renewable fuels, and have since pivoted the company away from fossil fuels towards transforming waste materials into renewable fuels and polymers and chemicals. In so doing, we are reducing the carbon being brought into the ecosystem, and making a big contribution to our climate change challenge. Neste is now a leader in bringing renewable diesel to the market, a product which is fully compatible with diesel cars and requires no different infrastructure or technology, so it can be used as a complete replacement. We are now doing the same for aviation with Neste MY Sustainable Aviation Fuel.
Where does SAF come from and what kind of emission reductions will it give?
Neste’s initial SAF trial started back in 2010, and we’ve since brought it to market at commercial airports in Europe and Asia. It’s made from waste oils, such as cooking oil, and fats that have been treated and converted into liquid hydrocarbon fuel. By using SAF we effectively reduce the net end-to-end carbon emissions compared with fossil fuels by up to 80 per cent. Fossil jet fuels add carbon to the ecosystem, whereas with SAF we’re taking carbon already in the ecosystem and recycling it. It’s not a 100 per cent saving because there are still some production and transportation carbon costs. We are expanding the number of waste materials that we can use so we can grow SAF availability – our plan is to significantly ramp up production to 1.5 million tonnes in 2023. We’ve already investing US$1.5 billion in additional capacity in Singapore and Rotterdam in order to increase the availability of SAF over the next few years.
What kind of certification do you give customers?
There are organisations that certify for our customers that our product and the feedstocks are what we say they are, giving independent verification of our claims including the net carbon reduction. Although fossil jet fuel is cheaper, the price is not a valid comparison to SAF given the carbon emissions that aren’t being accounted or paid for. It’s a false economy because we will not be able to continue to emit carbon in the way that we have been. We have to find alternative solutions – it’s no longer a choice.
What will spur carriers to adopt SAF permanently?
With the business that we’ve done with IAG Cargo and SAF, it’s starting to become more commonly used, but policy will be hugely important. In the UK and the EU, recent policy proposals state that it will be a requirement that a certain proportion of aviation fuel will need to be SAF in the very near future. In the meantime however it is crucial that we voluntary elect to use SAF. The recent IPCC report has confirmed that global warming has already exceeded 1C increase, and so the time for waiting is gone.
What other benefits does deploying SAF create for airlines and other stakeholders?
The carbon reduction first and foremost, but it’s also a cleaner fuel as well, emitting fewer particulates and non-CO2 emissions as well, and thus will make an even bigger contribution to tackling our climate change challenge. It also has a marginally superior performance to fossil jet fuel.
Have you faced any challenges in the roll-out of SAF, and how have you manoeuvred these?
Because SAF costs more, it has been hard to generate the demand to warrant the investment in increased supply capacity. This is why policy support to promote the use of SAF is key, whilst maintaining a level playing field across the airline industry. With airlines, we are now developing proposals to attract customers and freight forwarders who are willing to pay for the incremental cost in exchange for the reduced carbon emissions. On the supply side, we need to find more raw materials and the production capacity to roll out SAF at a much larger scale, so we can ultimately deliver to all airlines and cease using fossil fuels.
What does the future of SAF look like? How much is it used in aviation today, and how much do you anticipate its adoption in the coming years?
Currently, adoption is under one percent, but if you look at the latest UK and EU policy proposals, there’s a possibility of between two and five per cent of all aviation fuel being SAF by 2025, and by 2030, between five and 10 per cent. Government policy mandating its use, something which is already the case in road transportation with biofuels, will be key to it being used more broadly. With each year that we don’t take action, we’re building more of a problem for ourselves. The sooner we act, the better.