The global aviation industry produces around 2.1% of all human-induced CO2 emissions and accounts for 12% of all transport-induced emissions. In late 2021, the International Air Transport Association (IATA) pledged to reach net zero flying by 2050. It plans to do so by focussing on a core resource: sustainable aviation fuel. However, to reach this target, airlines face a long haul. While we wait to see some progress, here are four leading sustainable aviation fuel companies to watch right now.
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What is Sustainable Aviation Fuel?
Sustainable Aviation Fuel (SAF) is an alternative to conventional fossil aviation fuel produced with biological and non-biological resources. The variety of feedstocks used to produce SAF, to replace oil, coal or gas typically used in traditional jet fuel, can be derived from both plant and animal materials, ranging from cooking oil and plant oils to agricultural residues as well as municipal waste and waste gases. The term ‘sustainable’ serves to highlight the fact that the production of SAF does not have a detrimental impact on the environment, since it does not involve deforestation or land use change nor does it require large amounts of fresh water for it to be produced. This type of fuel is referred to as a ‘drop-in fuel’, meaning that it can be blended with traditional jet fuel without the need for any adjustment in the aircraft’s fuelling infrastructure.
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What are the Advantages of Sustainable Aviation Fuel?
Compared to conventional jet fuel, SAF produces up to 80% less CO2 emissions over its lifecycle. Using municipal waste or agricultural residues as feedstock, for example, is a clear example of circular economy principles put into practice. By using waste instead of leaving it to decompose in landfill sites – a process that would generate even more emissions – and doing so while simultaneously avoiding petroleum use, SAF proves to be a great resource. Its implementation and adoption can provide further environmental benefits.
Figure 1: Lifecycle Greenhouse Gas Emissions of Sustainable Aviation Fuel.
In America, where aviation represents 11% of all transportation-related emissions, the Biden Administration pledged to meet 100% of aviation fuel demand by 2050 as part of the Build Back Better Agenda. It plans to do so in part by providing grants to projects around the production, transport, blend, or storage of sustainable aviation fuels.
Over 370,000 flights have taken to the skies using SAF since 2016 and it is estimated that implementing this fuel could contribute nearly 65% to the reduction in emissions needed to reach the net-zero target in the next three decades. However, the number of annual passengers is projected to increase up to 6.9 billion by 2035 and it is estimated that by 2050, around 450 billion liters of SAF will be needed. This would require a massive increase in production, given that we used ‘only’ about 100 million liters in 2021. To understand if such a huge step up in production is realistic, we have a look at who makes sustainable aviation fuel and if airlines are willing to invest in it.
Figure 2: Sustainable Aviation Fuel Required to Reach Net-Zero Emissions by 2050. Source: IATA.
4 Sustainable Aviation Fuel Companies
1. Neste (Finland)
Among the most important sustainable aviation fuel companies, Finnish billion-dollar refiner Neste is the world’s leading company and is set to become the world’s largest provider of renewable fuels with global capacity and a production footprint in North America, Asia, and Europe. Neste is committed to drastically reduce its customers’ greenhouse gas emissions in the next decade and reach carbon neutral production by 2035. Among those flying with Neste’s fuel are three of the major US airlines: Alaska Airlines, American Airlines, and JetBlue Airways. Neste is also operating in Asia, forming a groundbreaking partnership with Japan’s largest airline All Nippon Airways, as well as in Europe, by supplying SAF to the Dutch flag-carrier KLM.
2. World Energy (US)
World Energy is a major SAF supplier in the US. The company, which has been a leader in the production and distribution of low-carbon fuels for more than two decades and operates the world’s first and America’s only commercial-scale SAF production facility, plans to produce 150 million gallons of SAF per year by 2024.
Among those partnering up with World Energy is the country’s third largest air carrier, United Airlines, which committed to buying 1.5 billion gallons of SAF made from forest and crop waste. The airline aims to become 100% green by 2050 without using carbon offsets. In late 2021, the company also launched its first ever flight with 100% Sustainable Aviation Fuel produced by World Energy. However, data shows that sustainable aviation fuel still makes up just a tiny fraction of United’s fuel: of the nearly 4 billion gallons of fuel that the airline burned in a typical pre-pandemic year, only 1 million gallons were SAF.
More recently, American airline JetBlue also joined the SAF market, agreeing to include 1.5 million gallons of blended SAF produced by World Energy every year. The low-cost air carrier has aggressive sustainability targets and is investing not only in alternative fuel but also in electric vehicles and buying carbon offsets. Through the latter, JetBlue became the first major US airline to achieve carbon neutral on all domestic flights in 2020.
3. Alder Fuels
Among the newer players operating in the sustainable jet fuel market is Alder Fuels, a clean tech company that is pioneering groundbreaking technologies in producing sustainable aviation fuel at scale by converting forest and crop waste into a crude oil that can be used to produce aviation fuel. According to the US Department of Energy (DOE), the amount of forestry and agricultural residues of the country could be enough to generate more than 17 billion gallons of sustainable jet fuel that would displace almost three-quarters of the US aviation fuel consumption. Alder Funds aims at developing technologies that would allow it to produce a carbon-negative fuel that could entirely replace petroleum jet fuel. One of the biggest investors in the company’ SAF is, once again, United Airlines, which pledged to purchase 1.5 billion gallons as part of the largest publicly announced SAF agreement in aviation history.
4. SkyNRG
Another global pioneer in the sustainable aviation fuel sector is SkyNRG. The American company, which supplies over 30 airlines across all continents, believes that SAF is the only way to reduce aviation’s dependency on fossil jet fuel in the near term and at the same time, allows for a more sustainable growth of air travel with a much lower environmental footprint. In 2021, SkyNRG announced a partnership with Boeing to scale up sustainable aviation fuels globally. The world’s largest aerospace company will also invest in SkyNRG Americas’ SAF production project, which Alaska Airlines has joined as well. More recently, the company announced a 10-year partnership with Bank of America that will support the production and use of one billion gallons of SAF by 2030. This is seen as both a huge step to increase the SAF production capacity as well as a step forward in the bank’s race to net-zero before 2050.
Are Sustainable Aviation Fuel Companies Doing Enough?
The development of SAF has facilitated the way for airlines around the world to reach net-zero emissions in the upcoming years. While it is certainly a much cleaner and less polluting alternative to conventional fuel, there are still some disadvantages of sustainable aviation fuel. Globally, SAF still makes up less than 0.1% of aviation fuel and it costs about four times as much than kerosene. Furthermore, some experts argue that investing in SAF is not the right strategy to decarbonise the engine technology and believe a much better way would be to invest in technologies like hydrogen and electric propulsion as these are the only long-term solutions to aviation emissions. Nonetheless, more and more companies are now investing in groundbreaking technologies to turn a variety of feedstocks into aviation fuel and an increasing number of airlines are betting on it, making some decisive steps in the right direction in the run to net-zero emissions.
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