Sustainable Aviation Fuels: Ready for Takeoff

Major Airlines are Committing to Sustainable Aviation Fuels, but Could be Doing Much More

The last five years have been busy ones in the sustainable aviation fuel (SAF) industry: Major airlines are making investments in SAF projects designed to lower greenhouse gas emissions. United put up $30M to invest in biofuels pioneer and NER client Fulcrum BioEnergy, Delta committed to purchase 10M gallons of renewable jet fuel annually from Gevo on top of $2M invested elsewhere, Southwest signed up for 3M gallons per year from Red Rock Biofuels, and Qantas announced AU$50M over the next 10 years to jumpstart the SAF industry as a whole.

Why the interest? They see the writing on the wall: With aviation representing over 12% of global transport CO2emissions, and growing each year, flyers are reporting that climate concerns are leading  them to fly less, take years off from flying, or stop flying altogether.  Examples abound, like the climate activist Greta Thunberg who publicly opted to take a boat to the UN rather than fly. Without action, airlines will see their customers flee, governments intervene, or both.

SAFs, which are less carbon intensive than their petroleum-based counterparts, represent a promising solution for the airlines. How? They utilize next-generation technologies, literally turning wastes, including household trash and agricultural byproducts, into renewable transport fuels. These fuels, on a full lifecycle basis, emit a small fraction of the CO2 as compared to fossil-derived fuels, significantly reducing the carbon footprint of the flying public.

The investments so far from the airlines are a step in the right direction, but reducing airline emissions will take a significantly larger commitment. $30M from United to support Fulcrum is good, but Fulcrum’s next plant will take an order of magnitude more capital to build, and the 33M gallons of fuel it will produce annually is just 0.2% of the 18B gallons of fuels U.S. airlines consumed in 2018. Delta’s 10M gallon commitment to Gevo is a similar fraction of a percent of overall demand. Airlines surely don’t (and shouldn’t) need to be the sole financing source for all the capital necessary to help SAFs reach scale, but a serious increase of investment would multiply the number of projects coming to market and start making a real dent. 

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