Do clear skies or stiff headwinds lie ahead as SAF heads for a major takeoff?

This article was first published in Biofuels International and is republished with their kind permission.

The aviation industry is embarking on a strong growth journey following the turbulence of the Covid-19 years. The International Air Transport Association (IATA) Global Outlook for Air Transport report released in June 2023, noted that the recovery in air passenger traffic observed in 2022 continued its upward trajectory into the first quarter of 2023. By March, industry-wide revenue passenger-kilometers (RPKs) had surged to 88% of pre-pandemic levels, signaling a robust start to the year.

And the growth phase is unlikely to stop once pre-pandemic levels are recovered. The long-term outlook is also soundly positive with the IATA predicting demand for air travel will double by 2040, growing at an annual average rate of 3.4%, with origin-destination passengers are projected to increase from approximately 4 billion in 2019 to over 8 billion in 2040.

While this marks a positive development for the aviation industry, it also escalates the task of reducing its climate footprint.

How will aviation decarbonize?

Currently, direct CO2 emissions from the aviation sector accounts for over 2% of the global total. As other industries that are more readily able to reduce emissions make headway, there will be further upward pressure on aviation’s percentage contribution.

In the aviation industry, advancements in design and technology, particularly through fleet modernization, have always played a crucial role in unlocking efficiencies. For example, each successive generation of aircraft boasts up to a 20% improvement in fuel efficiency compared to its predecessor. Consequently, today's airplanes emit 80% less CO2 per seat than those in the 1950s. However, from 2000 to 2010, the rate of fuel efficiency enhancement averaged 2.4% annually, which tapered to 1.9% per year from 2010 to 2019, highlighting the challenge of sustaining long-term efficiency gains.

Improvements in Air Traffic Management (ATM) will also contribute to carbon reductions. The European Air Traffic Management (ATM) Master Plan, for instance, envisions that through the modernization and harmonization of European ATM systems, CO2 emissions per flight could be reduced by 5-10% by 2035 in comparison to 2017.

While improved design, enhanced technology, and optimized ATM systems will yield benefits, the true impact lies within the nature of the fuel itself. According to one estimation in the European Aviation Environmental Report, implementing multi-faceted emission reduction measures could lead to a possible 69% reduction in CO2 emissions by 2050 (as opposed to a "technology freeze" scenario). More than half of this reduction could be achieved through the adoption of SAF. Echoing this, Willie Walsh, IATA’s Director General, noted this year that the industry was “counting on SAF to provide about 62% of the carbon mitigation needed in 2050.”

SAF production needs to go sky high

In 2020, SAF supply was less than 0.05% of aviation fuel in the EU, meaning production must escalate drastically and rapidly. We are seeing indications: In 2022, global production increased three-fold but remained at less than 0.1% of what is required for 2050 net zero targets. Importantly, airlines used every single liter of SAF produced in 2022, highlighting the existing supply-side challenge. In further good news, the IATA said it expected renewable fuel production to reach an estimated capacity of at least 69 billion liters (55 million tonnes) by 2028.

Encouragingly, this is in line with the quantities needed to realize a net zero scenario by 2050. But what is the flight time and flightpath for SAF ramp up and what are the headwinds we should expect?

Co-processing, HEFA and 2nd gen feedstocks will fuel initial SAF growth

Seven technology pathways have been approved by ASTM for producing drop-in SAF, as well as three co-processing pathways, which involve the simultaneous processing of fossil and renewable feedstocks (allowing for the use of existing refining, transport, and storage facilities).

Presently, producing SAF from waste oils is the most technically mature SAF conversion pathway, referred to as Hydroprocessed Esters and Fatty Acids, or more commonly as HEFA. The HEFA pathway is used for almost all SAF, but feedstocks of waste oils and fats (second generation feedstocks) are highly resource-constrained and are already largely consumed by the road transport sector – something that is limiting and will continue to limit supply. In short, diversification of feedstocks is needed.

READ MORE: Co-processing in kerosene hydrotreater - the fast-track to SAF production 

In terms of technology and production pathways, co-processing, which allows refineries to convert renewable feedstocks (such as mono-, di- and triglycerides, free fatty acids and fatty acid esters) into drop-in, biojet fuel at economically competitive prices, can swiftly boost the availability of SAF in the short run.

Because existing refining, transport, and storage facilities can be used, it means it is cost-effective (CAPEX and OPEX), delivers carbon footprint reduction, and eliminates the need to construct new specialized processing units. The amount of SAF a refinery can produce via co-processing is today limited at 5% by ASTM D1655, meaning that its impact could be even more significant if this limit is expanded.

The next leg of the journey

Further along the timeline, we are likely to see more and more existing refineries upgrading, diversifying, or reconstructing their operations to produce SAF from FT-SPK or HEFA pathways. As an example, Topsoe has collaborated with Calumet, a US-based refinery, enabling it to transform a section of its conventional fuel production, via a HEFA revamp, to now produce SAF. Anticipate more companies to adopt this strategy, evaluating ways to repurpose existing resources and leverage locally accessible raw materials.

Also, during this timeframe, gasification, FT (Fischer Tropsch) and hydrocracking will further facilitate the ramping up of SAF production. For instance, the gas-to-liquid route uses Fischer-Tropsch technology and hydroprocessing technologies to produce bio-based Fischer-Tropsch Synthetic Paraffinic Kerosene (FT-SPK).

Fast tracking technology for the long-haul

Longer term, eFuels and emerging pathways will play a crucial role in diversification to tackle feedstock obstacles. Anticipate a wider array of feedstocks taking on greater significance, including municipal solid waste, alternative waste sources, and plastics (provided they receive ASTM approval). These resources will undergo conversion into SAF through methods like alcohol-to-jet, pyrolysis, and gasification, Fischer-Tropsch.

eFuel, specifically eSAF in aviation, is created through the combination of green hydrogen (renewable electricity is used to separate hydrogen from water via electrolysis) with CO2 captured from the atmosphere. eSAF has substantial supply potential since the availability of electricity and CO2 is not constrained in the same manner as with other SAF feedstocks. Nevertheless, the production of eSAF is costlier compared to HEFA (attributed to the high cost of H2), demands a significant amount of energy, and hinges on the expansion of both clean electricity generation and CO2 sourcing, such as Direct Air Capture (DAC) or biogenic CO2.

To tap into feedstocks such as gasified biomass or captured CO2 and green hydrogen, methanol-to-jet technology is also being developed, but it will take some time before this pathway is approved, scaled up and commercialized. For example, Topsoe’s MTJet™ technology is under development as a fast-track project, and catalysts, process, business, and ASTM certification developments are all progressing in parallel.

Short- and long-term visibility remains clear

So where does this leave us? Hydroprocessing technology is mature and straightforward for first-generation (plants that can also be used as food or animal feed, e.g., corn, grain or soya oil) and second-generation feedstocks (residual materials such as food waste, used oil and plants or parts of plants, such as cellulose, are used that are not edible). But these feedstocks are highly resource-constrained, impact the food industry and land use, and especially in the case of first-generation renewable feedstocks, are subject to regulatory constraints. Still, first- and second-generation feedstocks will be crucial in the early stages of increased SAF production.

Third-generation feedstocks for renewable fuel – advanced feedstocks that can be derived from solid biomass waste, rotational crops, or recycled carbon – are more complex and costly, but offer the best long-term solution for increased production. In terms of timeline, sooner is obviously better and it can be anticipated that there will be a watershed moment between 2030 and 2035 where third-generation feedstock projects take off and dominate SAF production.

Lastly, if eSAF production simultaneously matures, scales-up and becomes cost efficient – and moves such as the specific quota for eSAF from 2030 under the EU’s ReFuelEU legislation will help – then it will also play an increasingly important role in the long term.

Arriving to the destination on time

To ensure SAF production increases to meet mandates, targets and supports the net zero scenario, work must still be done in terms of SAF costs, scaling up of technologies (and underpinning technologies, such as DAC), securing feedstock availability and the building of related infrastructure.

For these to happen, it will require:

1. A long-term uptake commitment from the airline industry, at the right price. Governments can also play a role by facilitating demand aggregation mechanisms.
2. An agile approach to SAF production, factoring in changing landscapes and local idiosyncrasies related to feedstock availability, incentives and mandates.
3. A more risk-taking approach from the financing world. Again, governments can play their part by offering greater support mechanisms to incentivize SAF production, thereby increasing security of supply and relevance of their domestic industrial sector.
4. A willingness and ability to spread the cost across the value chain, from producers and distributers to airlines, and yes, the customer too.