“SAF may be 2-5 times pricier than fossil JET A-1 right now … but fossil is a false future, making it a false comparison. Government-regulated demand is making SAF the new price floor. The relative price of one SAF versus another – that’s the game.”
Maarten van Dijk, Co-founder and Chief Development Officer, SkyNRG
That’s Maarten’s view – and as someone working with SAF long before it gained buzzword status he’s in a position to know. The bubbling, complex, silo-driven sector of today will become a smoothly functioning ecosystem of interconnected business models and methods – all delivering SAF into a competitive market.
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Long before SAF was a hot topic, Dutch-based SkyNRG was part of the narrative. Founded by airline KLM and consulting firm Spring Associates way back in 2009 – soon after the EU put aviation in its ETS framework – it sources and supplies SAF to over 40 airlines and will soon be manufacturing its own. But its contribution is as much intellectual as physical: strategies, programs, and collaborative partnerships that make SAF a win-win for all participants.
One of SkyNRG’s founders is Maarten van Dijk, now its CDO. He’s passionate about SAF as a critical components on the path to Net Zero: it fits with existing infrastructure, reduces carbon emissions with at least 75%, burns cleaner, and even has a 2-5% higher energy content. But his deep understanding of industry motivations offers some surprising insights into the market as it evolves … including its limiting factors.
GOVERNMENTS CREATING DEMAND
Mandated blending requirements in Europe, tax breaks and incentives in North America. The EU’s approach may be a stick with the USA’s more carrotlike – but either way, the key takeout is that governments are creating demand for SAF. Which makes the din about the price differential with fossil irrelevant: a cheap sticker on fossil JET A-1 means nothing if it’s phased out. Government action makes the price of SAF the new price floor of aviation fuel – or will very soon. It’s given airlines what they’ve long asked for – a level playing field. (If perhaps not the one they wanted.)
But like anything else, the emerging SAF landscape has its politics. While the general goal – a cleaner, safer planet – is shared, there are different perspectives on how to get there. Two factions with differing opinions are non-government organizations and alternative propulsion vendors.
NGOs ask valid questions about reducing the size of the industry – even pushing for route bans and lower limits on flight length to reduce emissions (as in France). Maarten prefers “rightsizing” to downsizing: serving passengers with a competitive but optimized mix of routes rather than a free-for-all of endless growth. Elsewhere, vendors developing technologies like hydrogen and battery aircraft can be dismissive of SAF, confusing Net Zero’s broad goals with their own narrow competitive outlook. Maarten prefers to find common ground, with all technologies playing their part.
COLLABORATIVE PARTNERSHIPS WORLDWIDE
The takeout: different stakeholders have different motivations around SAF – so SkyNRG strives to answer those motivations case-by-case, with custom partnerships shaped for different constituencies.
For airlines wanting SAF, it’s a tailor-made solution connecting each interaction between SAF source and supply, often including financing. “Board Now”, semi-customized, answers the CSR needs of today’s corporation, balancing short-term financial targets with long-term sustainability. While “Fly on SAF”, aimed at travel companies and airport operators, is more standard: a way to calculate and mitigate carbon footprints for end customers. All these, though, are a prelude to what Maarten sees as the bigger picture: moving upstream – and becoming mainstream.
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AN IMPROVED BUSINESS AS USUAL
Maarten sees the future of SAF – and of SkyNRG itself – as moving from fast-growth innovation to mainstream normality, as market realities are accepted and understood. For SAF, this means waste oil dominating as a feedstock for the next five years, with other inputs outpacing it by the 2030s. For SkyNRG, it means connecting the ecosystem to open up new opportunities for airlines, corporations, even passengers. The SAF sector may be an emerging market today – but tomorrow, it will be business as usual.
That’s Maarten’s view – and as someone working with SAF long before it gained buzzword status he’s in a position to know. The bubbling, complex, silo-riven sector of today will become a smoothly functioning ecosystem of interconnected business models and methods – all delivering SAF into a competitive market.
A LEVEL PLAYING FIELD
The level playing field is something airlines have been asking for forever – and while it’s hardly the cost compensation subsidy they wanted, the strongly growing SAF demand signal will provide it, as new businesses emerge to supply and connect the industry.
