In 2021, the International Air Transport Association (IATA) announced its goal for the global aviation industry to meet net-zero emissions by 2050. The International Civil Aviation Organisation reinforced the commitment to this target at the most recent UN Climate Change Conference. While there are a number of ways to drive aircraft decarbonisation, in recent years, there has been an increased focus on sustainable fuel to power flight.

What is SAF?

Sustainable Aviation Fuel – or SAF – is an aviation fuel produced from sustainable resources such as used cooking oil and agricultural waste. With a reduction of up to 80 percent in greenhouse gas emissions compared to conventional jet fuels, SAF shows promise as a significant contributor to the decarbonisation of the industry (not to mention it is much cleaner – emitting fewer pollutants such as nitrogen oxide and sulphur dioxide). SAF is a ‘drop in’ fuel, meaning that it can be dropped straight into existing infrastructure and aircraft. Currently, SAF is certified for commercial use when blended with fossil jet fuel in a ratio of up to 50 percent.

Recent strides in SAF use

IATA estimates that in 2022, the total production of SAF reached approximately 300 million litres (79.3 million gallons) – a threefold increase in production from 2021. IATA also reports that almost half a million commercial flights have been powered, in part, by SAF. Last year, the first commercial regional flight to use 100 percent SAF was completed, demonstrating the potential to safely fly on 100 percent SAF and render conventional fossil jet fuels a thing of the past. Since then, more test flights have been conducted on 100 percent SAF.

It is not just airlines racing to incorporate SAF in their flights – manufacturers are also ensuring the future uptake of SAF. Boeing has already announced its commitment to have its entire commercial fleet being capable and certified to fly on 100 percent SAF by 2030. Airbus is also partnering with SAF producers to reach certification for its aircraft for up to 100 percent SAF.

Despite the excitement around SAF and its emissions-saving potential, it is currently in short supply and can be as much as three times more costly than fossil jet fuel. For most airlines, SAF only accounts for a small fraction of their total fuel consumption. To bolster uptake, various organizations and governments have established incentive programs that help reduce the cost of transitioning to SAF and promote its availability. For example, Heathrow Airport introduced its Sustainable Aviation Fuel incentive scheme in 2022, which covers up to 50 percent of the extra cost of SAF for participants in the program. The UK government has announced a mandate requiring at least 10 percent of jet fuel to be made from sustainable sources by 2030 – increasing the support for SAF by growing its demand. Other means by which to incentivise the use of SAF include tax credits, subsidies and grants.

Financing SAF production

Public-sector financing in SAF initiatives has taken off in recent years, driven in part by the public’s increasingly vocal demands to tackle climate change. In 2022, the FAA granted more than US$16 million to various U.S. universities to conduct research on environmental initiatives – including research into sectors such as SAF, alternative jet fuel supply chains and hydrogen/ battery-powered flight. The UK Government will distribute £165 million from its Advanced Fuels Fund to kick-start a domestic SAF industry.

The aviation industry and key stakeholders are also investing heavily in this future fuel. In recent years, various airline-renewable fuel company partnerships have been formed in an effort to increase SAF production through investment. Private equity firms and venture capitalists are also increasingly financing SAF technologies and plants. Last month, one airline (in association with corporate partners) announced a more than US$ 100 million fund to support the research, development and production of SAF.

Future of SAF

Despite the increasing levels of support for SAF over recent years, more policy support and greater investment is needed for the aviation industry to reach its decarbonisation targets. Continued investment in SAF, as a means to ramp-up production and drive-down prices to promote user uptake, will be critical.

In addition, comprehensive production incentives for SAF should be put in place by governments to accelerate availability, scale up production and reduce investment risk in SAF. In the UK, further policy support should be provided to achieve the 10 percent SAF target by 2030.

The widespread adoption of SAF – bolstered by government incentives and private investment – will speed up the transition to low-emission flight and promote a more sustainable future for aviation.