The aviation industry is committed to achieving complete decarbonization by 2050, with all stakeholders onboard. However, the specific strategies and pathways for achieving net-zero emissions in aviation are still uncertain. Sustainable aviation fuels are considered a key component in the short-term efforts to achieve this ambition. But for the time being, the reliance on sustainable aviation fuels is more of a speculative and aspirational approach.
Dave Calhoun, the CEO of Boeing, has raised doubts about the cost competitiveness of sustainable aviation fuels (SAF) compared to conventional jet fuels. If Calhoun's concerns prove to be right, it could pose significant challenges to the aviation industry's ambitions of reducing emissions and achieving net-zero by relying on climate-friendly biofuels.
Airlines believe that sustainable aviation fuels (SAF) derived from food waste, including biomass, used fats or oils, municipal waste, and agricultural residues could make a substantial impact on reducing carbon emissions by replacing conventional aviation fuels. However, the current utilization of SAF remains relatively low, representing less than 1% of global aviation fuel consumption. Additionally, the cost of SAF is currently at least twice as high as that of standard aviation fuel.
Boeing's CEO, Calhoun, has recently claimed that “biofuels like SAF will never achieve the price of jet fuel.” This statement can be seen as an influential opinion that reflects the industry's ongoing concerns about the challenges and costs associated with decarbonizing the aviation industry.
Calhoun's assertion that "the emperor has no clothes" found resonance among various prominent figures in the industry. Experts acknowledge that cost-effective production methods for sustainable aviation fuels (SAF) have yet to be discovered. Their observations make it evident that if such methods had already been identified, they would have been implemented by now.
In 2021, the International Air Transport Association (IATA) established the ambitious goal of achieving net zero emissions by 2050. As part of this commitment, sustainable aviation fuels (SAF) are expected to play a significant role, accounting for 65% of the overall carbon emissions reduction process.
IATA President Willie Walsh has emphasized that the transition to achieving net zero emissions in the aviation industry will come with significant costs. Airlines have consistently communicated that passengers may experience higher fares due to the costs associated with decarbonization efforts.
The Joe Biden administration in the United States has included substantial clean energy subsidies, including tax incentives for sustainable aviation fuel (SAF) production, in the Inflation Reduction Act (IRA) introduced last year. Similarly, the European Union is also implementing measures to encourage airports and manufacturing companies to increase the availability of SAF for aircraft. However, it is important to note that despite these efforts, the desired results have not yet been achieved.
How Much Does Sustainable Aviation Fuel Cost?
As of May 19, 2023, the price of sustainable aviation fuel (SAF) in the United States was $6.83 per gallon, compared to $2.34 per gallon for Jet A-1, the conventional aviation fuel. It is important to note that achieving net zero emissions requires more than a new, cleaner fuel.
Transitioning to 100% sustainable aviation fuel (SAF) indeed involves more than just fuel composition. It necessitates adapting the existing fuel infrastructure at airports and on aircraft to accommodate biofuels. This requires a strategic and transformative shift in the design of future aircraft.
Boeing and Airbus have committed to ensure that their aircraft are 50% compliant with SAF at present and achieve full compliance by 2030. To support these efforts, Boeing is launching Cascade, a modeling tool designed to assist airlines and policymakers in assessing decarbonization strategies. Despite these initiatives, the consensus among industry experts is that the commercial operation of Airbus or Boeing aircraft running on 100% SAF within the next five years is highly unlikely.
In November 2021, Airbus achieved a significant milestone by conducting its first flight using 100% SAF with the A350 aircraft. This development marked an important step towards the industry's aspiration of commercializing and widely adopting 100% SAF flights, particularly in narrow-body aircraft. Building on this progress, Airbus successfully conducted a 100% SAF flight using the A321 aircraft in March 2023.
SAF is currently compatible with commercial and military aircraft, as well as helicopters, and can be blended with conventional jet fuel up to a maximum of 50%. The use of such a combination does not require any engine modifications. In practice, airlines often choose to fuel one of the two engines on board with SAF, while the other engine operates on conventional jet fuel.
Simply relying on 100% SAF for both engines can already reduce carbon emissions by up to 80% on flights. To address the remaining 20% of emissions not related to the specific flight, carbon offsetting is typically employed. However, it is important to recognize that even if all challenges associated with SAF are resolved, relying solely on SAF does not guarantee the desired outcomes in terms of emissions reduction.
SAF could potentially pose a threat to forests!
Industry experts raise concerns that the increasing demand for SAFs could deplete feedstock derived from food fats, leading to a greater reliance on crops and potentially posing risks to forests or creating competition for land needed for food supply. In response to this challenge, the Biden administration has proposed utilizing agricultural waste generated alongside corn and soybeans, as well as woody biomass from western states. As one would expect, however, these proposals alone offer limited solutions to address the raised concerns.
According to analysts, the lack of assured long-term demand may deter investors from investing in new SAF production capacity. This hesitation could impede the cost reduction of this specialized product. US Secretary of Agriculture, Tom Vilsack, expressed that the tax credits provided by the IRA would assist the industry in overcoming the investment barrier. However, he also acknowledged that achieving price parity between SAF and traditional jet fuel is unlikely to happen in the near future. Therefore, it is clear from his demeanor that he is not very optimistic.