The Dawn of Sustainable Aviation Fuel

This July, a German team tested an aircraft engine’s compatibility with future fuels, starting with traditional Jet-A fuel, which confirmed the V2500 engine’s functionality. The focus then shifted to HEFA-SPK, a sustainable aviation fuel (SAF) made from reclaimed fats, which significantly reduces carbon emissions. The engine performed flawlessly, and the company joined an industry group to establish standards for 100% SAF, eliminating the need for fossil fuels.

For nearly a century, kerosene has been the primary fuel for aircraft. Now, a new generation of sustainable aviation fuels (SAFs) could potentially reduce the aviation industry’s carbon emissions by half by 2050.

SAF is certified jet fuel (Jet-A/A1) but differs from traditional jet fuel, which is entirely derived from fossil resources. Today’s SAF is a blend of conventional fossil fuel and synthetic components made from various renewable feedstocks, including used cooking oils, fats, plant oils, and municipal, agricultural, and forestry waste.

SAF is undeniably the future for air transport. 

Germany’s Mönchengladbach Airport (EDLN) became the country’s first to provide continuous SAF supplies. Partnering with TotalEnergies for regular deliveries of blended SAF produced via the HEFA pathway, the fuel will be distributed by Rheinland Air Service (RAS).

The Civil Aviation Authority of China (CAAC) established the country’s first technical centre for SAF in Chengdu, focusing on standard setting and product research. This centre will lead efforts to develop industry policies and standards for SAF products and quality control, aiming to create a Chinese certification system for sustainable fuel.

What does this spell out for the future of SAF regarding costs? 

 The EU SAF blending quota will rise from 2% in 2025 to 70% by 2050, leading to significant additional costs.  IATA Director General Willie Walsh indicated that the SAF cost premium would increase airfares, estimating SAF production will meet 0.53% of global jet fuel demand in 2024, costing airlines $3.75 billion and adding $2.4 billion over conventional fuel costs, with CORSIA-related costs adding another $600 million.

This is evident in airlines introducing new charges to pass costs on. 

The Lufthansa Group introduced an environmental surcharge on tickets issued from June 26 for flights departing from January 1, 2025, from the EU, UK, Norway, and Switzerland. This surcharge, ranging from 1 to 72 euros ($1.08 to $78), aims to cover rising regulatory environmental costs, including the ReFuelEU SAF blending quota, adjustments to the EU Emissions Trading System (EU ETS), and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Luis Gallego, CEO of International Airlines Group (IAG), noted that EU net-zero targets and SAF adoption will raise airfares and impact demand.

 In 2023, SAF accounted for 0.2% of Lufthansa’s fuel needs, making it a major SAF customer. IAG’s Gallego warned that EU targets might make European airlines less competitive, advocating for consistent global decarbonisation efforts.