What is Sustainable Aviation Fuel (SAF)? Sustainable Aviation Fuel (SAF) is a type of alternative jet fuel that is derived from renewable or waste-based sources, instead of fossil fuels. It has the potential to significantly reduce greenhouse gas emissions from air travel. The Vital Demand for Sustainable Aviation Fuel (SAF) The aviation industry, while a vital driver of global connectivity and economic prosperity, faces a pressing challenge: its significant contribution to carbon emissions. Accounting for 2% of global CO2 emissions and projected to grow, the aviation industry is projected to double its numbers, surpassing 8 billion passengers by 2050. In light of these projections, there is a pressing need for strategic solutions to address and mitigate the industry’s environmental impact. Enter Sustainable Aviation Fuels (SAF), a game-changer with the potential to significantly reduce the greenhouse gas footprint of air travel. By transitioning from traditional fossil-based fuels to SAFs derived from renewable or waste-based sources, airlines can dramatically lower their carbon emissions, paving the way for a more sustainable future for the industry and the planet. SAF as an Answer Regulatory Initiatives: Governments worldwide are adopting policies to promote the use of Sustainable Aviation Fuel (SAF). The ReFuelEU Aviation initiative, for instance, mandates a minimum share of SAF blending in jet fuel starting at 2% in 2025 and increasing to 5% in 2030 and 63% in 2050. Reduced CO2 emissions: Research indicates that SAFs offer significantly lower life cycle carbon emissions, achieving reductions of up to 80% compared to traditional jet fuel. Diverse feedstocks: Potential sources for SAF production include waste cooking oil, agricultural residues, algae, and even captured carbon, promoting resource diversity and sustainability. The Supply-Demand Gap Despite offering a critical pathway to decarbonizing the aviation industry, a significant gap exists between availability and demand. While output experienced a fivefold increase over the past three years, reaching 0.24 million tonnes (Mt) in 2022, the current SAF production meets only 0.1% of the global aviation fuel demand. Considering these figures, a 20x increase in sustainable aviation fuel (SAF) production capacity would still only account for 2% of the global aviation fuel demand, highlighting a significant supply gap. Furthermore, the price disparity between SAF and conventional jet fuel adds to the challenge. In 2022, US jet fuel retailed at roughly $2.85 per gallon, while prices for SAF stood at $6.69 per gallon, as per data from commodities and energy pricing agency Argus Media. Despite this considerable cost difference, airlines worldwide purchased the entire available SAF supply in 2022, demonstrating the strong demand for the sustainable fuel option. The current data from the International Civil Aviation Organization (ICAO) indicates 290 announced SAF production facilities, with a combined projected capacity of 98.9 billion liters per year. However, it’s crucial to distinguish between announced capacities and guaranteed or immediate output. There is a necessity to significantly increase the production of Sustainable Aviation Fuel (SAF) and scale the process to efficiently address rising demand. Image Source: S&P Global Commodity Insights (Platts), IATA Sustainability & Economics Bridging the Supply-Demand Gap Enhanced Investment: Increasing investments in research, development, and production facilities is imperative to boost the growth of Sustainable Aviation Fuels (SAF). Policy Advocacy: Government support through initiatives such as tax breaks and blending mandates is instrumental in incentivizing a wider embrace of SAF within the aviation sector. Strategic Collaboration: A collaborative effort involving airlines, fuel producers, and investors is essential to amplify production capacities and facilitate broader access to SAF. Policy Impact on SAF As governments and corporations intensify their efforts to mitigate emissions and meet net-zero targets in alignment with the Paris Agreement, the International Civil Aviation Organization (ICAO) has introduced the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This global offsetting scheme is designed to address emissions from international aviation and mandates carbon-neutral growth within the sector. Airlines seeking compliance with CORSIA have two main options: retiring carbon credits that meet CORSIA’s eligibility criteria for emissions units, or increasing the use of sustainable aviation fuels (SAF). CORSIA recognizes SAF as an eligible “low-carbon aviation fuel.” By categorizing SAF as a viable option within CORSIA, a market-based incentive is established, encouraging heightened production of Sustainable Aviation Fuels. Airlines are voluntarily setting their own carbon emission targets. Notably, the IAG Group, comprising British Airways, Aer Lingus, Iberia, and Vueling, has committed to achieving net-zero CO2 emissions by 2050. Similarly, Lufthansa Airlines has also made the same pledge. Furthermore, governments worldwide are implementing progressive policies and mandates to boost Sustainable Aviation Fuel (SAF) utilization. A notable initiative is the “Sustainable Aviation Fuel Grand Challenge,” currently established as a memorandum of understanding by the U.S. government. This initiative sets a bold target: to supply enough SAF to fulfill 100% of the aviation fuel demand in the USA by 2050. The collaborative endeavors of airlines and governments advocating for enhanced production and utilization of Sustainable Aviation Fuel (SAF) emphasizes the crucial necessity to scale up SAF. The Challenge of Scaling SAF One significant challenge in scaling the production of Sustainable Aviation Fuel (SAF) revolves around optimizing efficiency and managing costs. This hurdle, however, mirrors the historical challenges faced by emerging technologies, such as solar panels, half a century ago. Drawing a parallel with the evolution of solar panels, it’s evident that advancements have led to a thirty times improvement in efficiency over the last five decades. This trajectory provides a compelling perspective, suggesting that current challenges associated with SAF production efficiency and cost may evolve positively at an accelerated pace. Therefore, it becomes imperative to acknowledge that any solution implemented today will likely undergo substantial improvements, both in terms of efficiency and cost-effectiveness, at a much swifter rate than witnessed over the past 50 years. Image Source: Historical trends in PV efficiency, with projections to 2050 (source for existing data: National Renewable Energy Laboratory) SAF for a Sustainable Future While challenges persist, the undeniable potential of Sustainable Aviation Fuels (SAF) remains apparent. Scaling up production, ensuring cost competitiveness, and fostering collaborative efforts across the industry can pave the way for a greener trajectory in aviation.

At MBS Green, we offer Green Markets Advisory, a specialized service designed to provide strategic counsel to corporate entities and government organizations, guiding them toward the achievement of their net zero objectives. Our Green Markets Advisory services are meticulously tailored to meet the unique needs of organizations. Within our suite of services, we offer expertise in carbon project financing, carbon credit advisory, guidance on CORSIA policies, and more. Benefits of Choosing Green Markets Advisory: Environmental Impact: By engaging in green market advisory services, organizations actively contribute to initiatives that promote green practices and carbon-neutral solutions, playing a role in mitigating climate change. Sustainability Leadership: Green markets advisory positions governments and organizations as leaders in net zero and sustainability, enhancing brand reputation and appealing to environmentally conscious stakeholders. Regulatory Compliance: Our advisory services help organizations navigate complex carbon regulations, ensuring compliance with environmental standards and minimizing risks. Tailored Solutions: Green Markets Advisory offers personalized solutions, recognizing that each organization’s environmental and sustainability goals are unique. Embark on the path to net zero and sustainability with us. Partnering with MBS Green means joining forces to make a lasting positive impact on the environment.

In the lead-up to Cop28, the urgency of addressing the global climate crisis has never been clearer. Dr. Sultan Al Jaber, COP28 president-designate and Minister of Industry and Advanced Technology, emphasized that there are “too many things dividing our world at this moment.” His rallying cry for global unity at next month’s crucial climate conference in Dubai resonates deeply with the mounting challenges we face. Among the many crucial aspects of climate action discussed during the pre-Cop talks in Abu Dhabi, one stands out prominently: climate finance. Dr. Al Jaber stressed the need to deliver on pledges, specifically referring to the fund and funding arrangements for loss and damage. This call to action highlights the critical role that finance plays in mitigating and adapting to climate change. He underlined the significance of the long-standing commitment to provide $100 billion a year in climate finance. While Dr. Al Jaber expressed gratitude for the efforts of Germany and Canada, who have reassured that things are on track, he noted that certainty in delivery is still a concern. This financial commitment is essential for supporting developing nations in their climate mitigation and adaptation efforts, and its fulfillment is a key measure of the international community’s commitment to climate action. The importance of adaptation was also prominently featured in Dr. Al Jaber’s address. As we seek to reduce vulnerability to the impacts of climate change, actions like drought-tolerant crops and flood defenses take on significant roles. This underscores the need to align national climate strategies with nature-positive investments, including measures to end deforestation and preserve natural carbon sinks. As we count down to the Cop28 summit from November 30 to December 12 in Dubai, Dr. Al Jaber’s message reverberates throughout the global community. The world is watching, and it’s imperative that we come together, leaving behind divisions and short-term thinking. Climate finance, in particular, must be scaled up to meet the needs of the most vulnerable nations, ensuring that the $100 billion climate finance pledge is fulfilled. The climate emergency demands groundbreaking solutions in finance and across all aspects of climate action. The Cop28 conference is our opportunity to unite, deliver on promises, and redefine our self-interest as a common interest. The stakes are high, but together, we can make a difference. Read the full article here

The world’s eyes will be on Dubai in November 2023 as countries come together to fight climate change. COP28, the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change, will be held in the United Arab Emirates from November 30 to December 12. COP28 is expected to be a critical juncture in the global fight against climate change. The world is currently on track to warm by 2.7 degrees Celsius by the end of the century, which would have devastating consequences for people and the planet. COP28 will be an opportunity for countries to come together and commit to ambitious action to reduce emissions and build a more sustainable future. The UAE has a strong track record on climate action. The country has already pledged to achieve net-zero emissions by 2050, and it is investing heavily in renewable energy and other clean technologies. COP28 will be a chance for the UAE to showcase its leadership on climate change and to inspire other countries to take action. The world is watching COP28. The decisions made at this summit will have a profound impact on the future of our planet. We must all work together to ensure that COP28 is a success and that we take the necessary steps to address the climate crisis. Here are some of the key issues that are expected to be discussed at COP28: How to reduce greenhouse gas emissions: Countries will need to come up with ambitious plans to reduce their emissions in line with the Paris Agreement. How to help developing countries adapt to climate change: Developing countries are disproportionately affected by climate change, and they need financial and technical assistance to adapt to its impacts. How to mobilize finance for climate action: The world needs to mobilize trillions of dollars to finance climate action. This will require governments, businesses, and individuals to work together.