Latest news with #sustainableaviationfuel
Reuters
21 hours ago
- Business
- Reuters
Airlines must ink long-term deals on greener fuels to boost volumes: Bayer exec
MONTREAL, June 3 (Rtrs) - Airlines need to reach long-term agreements to buy bigger quantities of sustainable aviation fuel if they want to boost global volumes of the lower-emission fuel required for industry climate targets, a Bayer executive said on Tuesday. Airline members of the International Air Transport Association are sticking to a target of net zero emissions by 2050 despite warnings that carriers will struggle to meet such sustainability goals due to low production of SAF, which is more expensive than conventional jet fuel. IATA, which wrapped up a summit in India on Tuesday, expects the amount of sustainable aviation fuel produced to double in 2025 to reach 2 million tonnes, representing 0.7% of airlines' fuel consumption. While airlines have called for greater action by energy companies and other partners to boost SAF volumes, Matthias Berninger, a Bayer executive vice president and sustainability head, said in Montreal there needs to be more long-term purchases of the fuel, similar to some commitments in the renewable energy sector. Bayer's Monsanto unit sells seeds and pesticides to farmers who produce crops for biomass-based feedstocks used to develop biofuels. 'If they (airlines) commit to buy a certain amount over a certain period of time, we can guarantee that farmers will grow it and processors will process it,' Berninger told Reuters on the sidelines of the International Civil Aviation Organization's aviation climate week. "And the question whether or not that supply meets the market (demand) depends on long-term purchasing contracts of the airline industry sending a very clear demand signal comparable to what we have in the renewable space.' SAF can be produced from plants, used cooking oil or wastes, among other products.
Telegraph
2 days ago
- Business
- Telegraph
‘Great green scam' to cost passengers £2bn a year, warns airline chief
Airline passengers will foot costs of almost $3bn (£2.2bn) a year as the EU and UK impose net zero targets, an industry chief has warned. Willie Walsh, the chief executive of the International Air Transport Association (IATA), said the soaring cost of sustainable aviation fuel (SAF), as well as poor demand, meant passengers faced even higher ticket prices. Describing the net zero rules behind the additional costs as 'the EU's great green scam', Mr Walsh, who was previously chief executive of British Airways, said Brussels had been 'unrelenting in its proposals' to ramp up measures that have been wholly ineffective. Purchases of SAF will cost an extra $1.2bn in 2025 compared with traditional jet fuel, according to the IATA. On top of that, producers such as Shell and Total are set to charge airlines $1.7bn as they pass on fines, or 'compliance fees', for failing to supply carriers with at least 2pc SAF. This is the amount required by both Britain and Brussels following the introduction of a mandate this year. Speaking at an industry event in New Delhi, Mr Walsh said: 'The EU mandate has done nothing to stimulate additional production and a lot to enable fuel suppliers to increase their charges and therefore increase costs to airlines. 'The SAF has not been available but the fuel suppliers don't care. They will be subject to fines but they are just passing on the cost to the airlines. 'It is an outrage that suppliers are charging airlines compliance fees that value SAF at double its market premium over conventional jet fuel. That's a $1bn-plus windfall. 'People will say these mandates are positive because they stimulate production. We don't see any evidence of that. Consumers at the end of the day are paying more.' Mr Walsh stopped short of saying that a goal of reaching net zero emissions by 2050 is unachievable. However, he warned that without a huge increase in SAF production, the squeeze on airlines would worsen as the UK and EU require ever-increasing quantities to be used. The IATA estimates that sustainable fuel will need to deliver two thirds of the carbon reduction needed to reach the mid-century net zero goal. While SAF production is forecast to double to 2m tonnes this year, it said that would represent just 0.7pc of airline fuel needs. Mr Walsh said the situation is being exacerbated by the possible removal of US tax credits for SAF, a production crisis at Boeing and Airbus that has hurt deliveries of more efficient planes, and the recent abandonment of hydrogen plane projects. He added: 'And companies we need to be major SAF producers such as BP and Shell have cut back or delayed investment plans. 'This is not where we should be in 2025. We have a quarter of a century to get to net zero with a $4.7 trillion price tag staring us in the face. There is no time to delay and no tolerance for government green-washing.' Hemant Mistry, the IATA's head of sustainability, said the fines passed on by fuel suppliers would increase the cost of SAF from 1.7 times the cost of kerosene to more than four times. That compares with about three times as much last year. Mr Mistry added that there is 'zero transparency' regarding the compliance fees and what they include and that oil producers appear to be 'kitchen-sinking all sorts of other stuff'. He said the level of fees being levied by airport fuel suppliers in the UK was even higher than in the EU. Mr Mistry added that the IATA had complained to the Department for Transport about the practice. The IATA downgraded its financial outlook for the year, predicting that the industry will make a collective $36bn in profits, $600m lower than estimated in December. It said expectations have been 'dented by trade tensions and falls in consumer confidence'.
Arab News
2 days ago
- Business
- Arab News
Co-processing can help Middle East become sustainable aviation fuel hub: IATA official
NEW DELHI: The Middle East has all the potential to emerge as a global hub for sustainable aviation fuel production thanks to co-processing opportunities available in the region, according to a top official. Speaking to Arab News on the sidelines of the International Air Transport Association's Annual General Meeting in New Delhi, Marie Owens Thomsen, senior vice president of sustainability and chief economist at IATA, said that the world should act now to increase the production of SAF to meet decarbonization targets. This comes as the region accelerates efforts to produce the fuel, with Saudi Arabia's Nordic Electrofuel-backed project announcing in January a Jubail plant targeting 350 million liters annually by 2029, using renewable hydrogen and solar PV. The UAE, meanwhile, aims for 700 million liters by 2031, supported by Emirates, Etihad, and Air Arabia. Emirates has secured over 3 million gallons from Neste for 2024–25 flights, while Shell began supplying SAF at Dubai Airport in 2023. In her interview, Thomsen said: 'The Middle East has huge opportunities for co-processing. What we are seeing across the world is insufficient production of SAF.' Co-processing is the use of renewable feedstock in conventional fossil fuel units. This method allows existing traditional fuel refineries to seamlessly integrate renewable feedstocks into their production processes without the need for extensive infrastructural changes. She added: 'If this co-processing happens, then boom — we have a SAF plant. Clearly, the Middle East is uniquely positioned for this.' Thomsen further said that governments in the Middle East region should create investment policies in such a way that oil producers will be more attracted to co-processing. The use of SAF is widely considered a crucial development for the global aviation industry, as most countries have stipulated targets to achieve net zero as part of their energy transition efforts. According to Thomsen, the world, on its current trajectory, is expected to produce 400 million tonnes of SAF by 2050, up from an estimated 2 million tonnes in 2025 and 1 million tonnes in 2024. Amid this projected growth, Thomsen revealed that the world would require at least 500 million tonnes of SAF by 2050 to meet energy transition and sustainability goals. 'On the current trajectory, we will be a 100 million tonnes short in 2050. That is a dramatic shortfall. If we do not address it today, this shortfall may be even greater by the time we reach 2050,' said Thomsen. She said this presents a challenge and dilemma because as long as jet engines power our flights, liquid fuels remain essential. 'Again, I repeat, the Middle East is uniquely positioned to help the world take a big step forward if we could immediately co-process. There are also lower-carbon fuels which occur naturally in the Middle East, which the world should explore,' she added. Thomsen revealed that the aviation industry's net profit margin is lower compared to other sectors, and expenses could rise as SAF gains. However, she made it clear that effective ways should be adopted to increase the production of the fuel, so that the energy transition targets could be achieved by 2050. On the opening day of the AGM, Willie Walsh, director general of IATA, also shared identical views, and said that sufficient government measures, including the implementation of effective policies, are needed to achieve decarbonization targets. He added that ensuring the success of the Carbon Offsetting and Reduction Scheme for International Aviation is crucial to offsetting carbon emissions in the aviation sector. Under CORSIA, an initiative launched by the International Civil Aviation Organization, airplane operators must purchase and cancel 'emissions units' to offset the increase in CO2 emissions.
The Independent
2 days ago
- Business
- The Independent
Cheaper, ‘greener' flights to boost British Airways customers after SAF investment pays off
British Airways may soon offer cheaper, more eco-friendly flights than competitor airlines thanks to its early investment in sustainable aviation fuel (SAF). Under parent company IAG, the airline has committed $3.5 billion (£2.6bn) in SAF investments to meet sustainability targets and lower operational costs. SAF refers to aviation fuels that are synthetic, biofuels or recycled carbon, some produced from used cooking oil, tyres and forestry waste. Unlike conventional fuels, the carbon dioxide generated by SAF is already part of the carbon cycle, reducing carbon emissions by up to 80 per cent over the fuel lifecycle compared to traditional jet fuel. Jonathon Counsell, IAG sustainability head, said at a summit last week that investing in sustainable fuel early would give the group a 'competitive advantage' over other airlines, reported The Times. According to the outlet, executives from the airline conglomerate said it is currently paying less than 60 per cent of the market rate for SAF after locking in long-term contracts with suppliers early and at favourable rates. IAG spent €7.6 billion on fuel in total in the last financial year, making it the group's largest single expense. According to British Airways, SAF accounts for 2.7 per cent of its total fuel use today. The airline was the first in the world to use SAF produced on a commercial scale in the UK after signing a multi-year agreement with Phillips 66. The SAF Mandate says 2 per cent of total UK jet fuel demand should be SAF in 2025, increasing to 10 per cent in 2030 and then to 22 per cent by 2040. However, SAF is between two and seven times more expensive to produce than traditional jet fuel. The mandate is set to drive up flight fares as airlines face environmental surcharges and spend more on SAF over the coming years. British Airways has so far opted to pay the initial costs of SAF itself. Seat prices to fly BA from the UK, Switzerland, and Norway could become more competitive if savings from discounted SAF contracts are passed on to passenger pricing. Airlines that delay securing SAF are likely to face higher procurement costs that could hike costs for customers. Lufthansa and Virgin Atlantic have already added a SAF supplement to tickets to fund their sustainable fuel expenses – up to €72 (£61) per ticket and up to £24 per ticket, respectively. The IAG group plans to reach net zero carbon emissions by 2050. The Independent has contacted British Airways for comment. In September, British Airways became the largest carbon removal purchaser in the UK after agreeing to a more than £9 million partnership with UK-based company CUR8. The airline said that roughly one-third of its emissions reductions will come from carbon removals – the process of removing carbon dioxide from the atmosphere and storing it – by 2050.
Yahoo
3 days ago
- Business
- Yahoo
Avina unveils more details for sustainable aviation fuel plant at Pittsburgh airport
Avina Synthetic Aviation Fuel is sharing a few more details about its planned sustainable aviation fuel production facility at Pittsburgh International Airport. Avina said in a news release late Thursday that its state-of-the-art plant will convert renewable feedstocks of ethanol to jet fuel at a rate of about 100 million gallons a year when it's fully operational. The plant would be built in the Southfield area between the runways and Interstate 376 that the company leased earlier this year from the Allegheny County Airport Authority. But the project has apparently not yet received the final investment decision, which could occur by the end of the year. Avina didn't respond to a request for comment. Click here to read more from our partner Pittsburgh Business Times. Download the FREE WPXI News app for breaking news alerts. Follow Channel 11 News on Facebook and Twitter. | Watch WPXI NOW
