The flightpath to decarbonising aviation

TL;DR

• The aviation industry is responsible for approximately 2.5% of total global emissions but it is hard to abate due to weight and size constraints, the need to prioritise safety, customer expectations, supply chain limitations and cost.

• Even so, the industry has committed to achieving net zero by 2050 and sustainable aviation fuels (SAF) have an important role to play in reaching this target.

• Aviation is facing pressure to decarbonise – the UK and the EU have introduced SAF mandates, the US is incentivising SAF production, and the public are becoming more aware of the impact of jet fuel emissions.

• The HEFA process is currently the most common way of producing SAF, but it is restricted by limited feedstocks. Alternative technologies including Power-to-Liquid are promising but are prohibitively expensive.

• Government subsidies and incentives can help, but airlines are also joining forces and forming funds with private investors and corporations to invest in SAF production, the aim being to increase output and reduce costs.

The detail

With over 100,000 commercial flights taking off around the world each day, it’s perhaps surprising that the global aviation industry is only estimated to be responsible for approximately 2.5% of total emissions.

However, the sector is also growing once again following the Covid-19 pandemic – indeed, global passenger numbers are expected to exceed five billion in 2025 and profits are expected to increase by 4.4% year-on-year to $36.6 billion.

Even so, the aviation sector has committed to reaching net zero by 2050. This is an ambitious goal that will require the industry to undergo several changes, including embracing fleet renewal, investing in new propulsion technologies, making operational efficiencies, integrating sustainable aviation fuels (SAF), and carbon offsetting.

The sector also faces unique challenges. Weight and size constraints, the need to prioritise safety, customer expectations, supply chain limitations and cost are all hindering the progress of decarbonisation.

New aircraft, for example, represent a decarbonisation potential of between 15 and 20%, but the average age of aircraft has risen from 13.6 years to 14.8 years in the last 35 years (since 1990). Meanwhile, the backlog for new aircraft is now at 17,000 planes, a quantity that will take 14 years to overcome at current rates.

Customer buy-in is also questionable. While 85% of travellers claim that they would be willing to pay up to 2% more for carbon-neutral flight tickets, only 14% currently choose to pay for the more sustainable option.

An industry under pressure

Despite these challenges, the aviation industry is under unprecedented pressure to decarbonise – and quickly. In the EU, aviation fuel manufacturers are facing a mandate that was first proposed by the European Commission in July 2021. Known as the ReFuelEU proposal, this mandate will require all aircraft operators at EU airports to use fuel with a minimum volume of 2% SAF from 2025 onwards. This percentage will increase every five years until it reaches 63% in 2050.

The UK introduced a similar mandate in November 2023 as it seeks to reduce aviation emissions by 5% by 2030. This mandate will require the UK fuel mix to have 10% SAF by 2030, supported by a £53 million investment from the Government’s Advanced Fuels Fund and a commitment that five commercial SAF plants would be under construction by 2025.

On the other side of the Atlantic, the US has chosen to incentivise SAF rather than introduce mandates. In September 2021, President Biden pledged to increase SAF production to at least three billion gallons a year by 2030, with tax credits helping to cut costs and encourage expansion. The Inflation Reduction Act funds tax credits that range from $0.35 to $1.75 per gallon of qualifying SAF produced. Some states have introduced additional incentives – for example, Washington, Minnesota and Nebraska have SAF credits that range from $0.75 to $.150 per gallon of SAF produced or blended.

These legislative interventions are in line with shifts in the corporate world. Sustainability has become more desirable for private companies and investors; many procurement processes now require corporations to share their net zero roadmap and demonstrate that they are pursuing carbon reduction to avoid bid rejection. Minimising the carbon footprint of business travel is a key tactic that companies can employ to lower their emissions.

The civil aviation industry has also united to embrace carbon offsetting. The UN’s global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a pioneering scheme that requires airlines to offset their carbon dioxide emissions on international routes. CORSIA was adopted by the International Civil Aviation Organisation (ICAO) in 2016 and implemented by all 193 member states in January 2019. While not a long-term solution, in the short-term CORSIA will help the sector meet its climate targets and complement emissions reduction initiatives.

New fuels, new issues?

SAF is the focus of mandates and incentives, not least because it arguably represents the greatest opportunity, and challenge, for decarbonisation within aviation. Airlines cannot simply swap to battery-electric or hydrogen-powered aircraft, although these alternative propulsion techniques do have potential for short-haul routes in the future. As a result, SAF is the only scalable in-sector option that can help the sector reduce emissions and hit net zero by 2050.

So, what is SAF? Any renewable or waste-derived fuel that meets sustainability criteria can fall into this category. Typically, it can simply be dropped into the supply chain without any need to make changes to the aircraft. If the aviation industry were to swap from standard jet fuel to SAF, lifecycle emissions could be reduced by up to 80%. It’s certainly a viable option operationally speaking – the first transatlantic flight powered by 100% SAF took place in November 2023. Several airlines have now committed to SAF volumes equivalent to 10 to 30% of total jet fuel consumed by 2030.

The majority of SAF supplied today comes from the hydrotreated esters and fatty acid pathway (HEFA). This is derived from feedstocks like waste fats, oils and greases but

trials are also underway using algae, camelina, pennycress, tallow tree and carinata. These fats are treated with hydrogen to remove the oxygen and break down the compounds, which are then isomerised to create SAF. Compared to fossil-based jet fuel, SAF created using the HEFA process can save between 74% and 84% of carbon emissions.

Unfortunately, limited feedstocks mean that SAF production is falling short of expectation. SAF only accounted for 0.3% of global jet fuel production in 2024 and the fact that demand outweighs availability is estimated to add $3.8 billion to industry fuel costs in 2025 (up from $1.7 billion in 2024). In fact, according to the Royal Society, to grow the crops required to produce enough SAF to meet the UK’s aviation demand, the country would need to dedicate around half of its agricultural land to the cause.

Emerging alternatives

Happily, there are several potential alternatives that have emerged in recent years. The Fischer-Tropsch (FT) for municipal solid waste process uses waste that would otherwise be left to decompose in landfill. This waste is in good supply, as the world generates more than two billion tonnes each year and is expected to produce 3.4 billion tonnes of municipal solid waste by 2050. That being said, it does require infrastructure to be put in place so that the Fischer-Tropsch wax can be refined and blended into SAF.

While not yet commercially viable, second-generation biomass is also worthy of consideration. Agricultural and forestry residue is a plentiful feedstock, but it is difficult to transport. This means costs will either increase due to the need to transport these materials by road or rail or to fund the constructure of production plants near the residues. Some experts are also concerned that the increased demand for these materials will undermine the sustainability efforts already underway in industries like forestry and agriculture.

Power-to-liquid (PtL) SAF is in its infancy but is one of the most promising options. The process uses electrolysis, powered by renewable electricity, to extract hydrogen from water. This green hydrogen is then used to convert the carbon dioxide into carbon monoxide before the FT technique creates a wax that can be upgraded to SAF.

The PtL method has a lot of advantages. It emits 89-94% less than standard jet fuel and, as a synthetic fuel, it doesn’t rely on the availability of waste or alcohols. Geographically agnostic, PtL has global potential. Of course, if isn’t all positive. PtL is expensive – it relies on the availability of competitively priced green hydrogen and renewable energy, which makes it up to eight times more expensive than conventional jet fuel. HEFA, in comparison, is still costly, but only up to three or five times more than conventional jet fuel.

Scaling sustainably

While there are myriad SAF options available, cost is the biggest impediment to scaling them. Its estimated that around 325 million tonnes of SAF will be needed if the aviation industry is to achieve net zero by 2050, and roughly a trillion euros in capital expenditure will be required to establish SAF refineries. This financing shortfall is compounded by the lack of feedstock and the competition generated by the marine and road transport industry, which source from the same stocks and drive-up prices.

That’s not to say SAF isn’t a viable solution to decarbonise the aviation industry. Some costs will reduce in time – green hydrogen, for example, is expected to become more affordable in the coming years as production increases. Smart collaboration with other sectors could help to drive down the cost of technologies such as hydrogen production, direct air capture and biomass conversion, while SAF facilities could follow petrochemical’s lead and diversity their production base.

Partnerships also offer a funding solution. Consortiums like the Sustainable Aviation Buyers Alliance (SABA) prove that industry stakeholders can collaborate to pool demand effectively.  Other airlines are investing in SAF directly. Norwegian Airlines and Cargolux teamed up to invest in Norsk e-Fuel’s PtL plant in Norway, while Airbus and Qantas joined forces to invest $200 million in Australian SAF projects. SAF funds are uniting investors, financiers, SAF supply chain stakeholders and airlines to scale the industry. United Airlines’ Sustainable Flight Fund was launched in February 2023 and has attracted more than 20 corporate partners (including Air Canada, Boeing, and GE Aerospace) and committed more than $200 million to the cause.

Government support will still have a role to play, providing a supportive regulatory environment and funding research and tax credits to help SAF grow. In the longer-term, some costs may need to be passed on to customers. With this investment, the 200 SAF production projects currently in development could come to fruition, leading to a capacity of between 11 and 25 million metric tonnes by 2030, up from the 1.5 million metric tonnes produced in 2024.

With SAF capacity ramped up, new aircrafts making fleets more efficient and alternative propulsion taking over short-haul flights, the future of the aviation industry could be much more environmentally-friendly, whether its net zero target is met or not.

— Lew 👋

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