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AVIATION
FUEL FOR
A GREENER
PLANET

3. THE BIG PICTURE

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AVIATION FOR A GREENER PLANET

Few would consider aviation as sustainable: even fewer that it could hit Net Zero. But both established and emerging technologies are mapping a different future. Watch out for SAF.

TECHNOLOGY CONNECTS OUR WORLD
Laptops, phones, and the internet let us communicate across borders - low cost and friction free. But you can’t email a handshake or video conference a hug. 

PASSENGERS REBOUNDING …
The urge to “be there” – to interact face-to-face, be it a million-dollar meeting or a week on the beach – led to Revenue Passenger Kilometers (RPK) growing sevenfold between 1960 and 20187. Post-pandemic RPKs reached 500bn a month8 by mid-2022; demand for jet fuel is set to rise by 50% come 2050. For many countries, that’s the target year for Net Zero.

And while freight is a factor, most growth is driven by people. The average global citizen flew once every 22 months9 on a global fleet of over 25,000 passenger aircraft, over 10,000 airborne at any moment. 2019 saw 38.9m flights. Individual airlines come and go – but the desire to travel is eternal.

… BUT THE PLANET PAYS A PRICE
The downside: for energy-intensive consumer behavior, air travel tops the list. The world’s appetite for jet fuel peaked at two billion barrels in 2019; the USA consumes over a million of them a day10. Of 50bn tonnes of CO2 equivalents emitted annually, aviation is responsible for around one billion, at 1.9% against 16.2% for transport as a whole11. And it’s deeply unbalanced: just 1% of the world’s population is responsible for 50% of industry emissions12. 

GLOBAL GHG EMISSIONS BY SECTOR 
Global GHG Emission by sector v2
                                                                                        Source: Climate Watch, the World Resources Institute. Licensed under CC-BY13.

Of course, 1.9% is a far slimmer slice than manufacturing or agriculture, at 24.2% and 18.4% respectively. And efficiency gains in aviation have been dramatic: in 1950 a single RPK emitted 2.5kg of CO2eq against just 90g today14, with an improvement of 10%+ in just the last decade.

But we can go much further. 

SUSTAINABLE SKIES: THE EMERGENCE OF SAF
The Paris Agreement aims to limit global temperature rise to 1.5°C by 2050. It’s uncertain whether the world as a whole will get there. 

The key contributor of greenhouse gas (GHG) from aviation – fuel – can be sustainably sourced, refined, and used. Opening the way to a future where the whole economic cycle of jet fuel, from feedstock production to offset accounting, happens sustainably. In other words, aviation can help deliver Net Zero. And that future is getting closer every day, with SAF: Sustainable Aviation Fuel.

 

THE BIG PICTURE

Air transport touches every part of our lives, from plane tickets that let us ride the skies to the cargo carriers that bring us goods from around the world. But true understanding of the market needs a big picture view. In this section, we combine data from industry sources with government data to form a summary of the SAF landscape, based on the interconnected areas of the PESTLE model: political and legal, economic, social, environmental, and technological, with the sixth part of the PESTLE model – the legal side – explored further in Section 6.

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THE POLITICAL AND LEGAL FRAMEWORK

WHAT IS THE LAW BRINGING TO SAF?
The political challenge revolves around the Paris Agreement, which superseded the Kyoto Protocol in 2015. In Paris, 137 countries pledged carbon neutrality in the 2030-2060 timeframe, most by 2050. In other words, net GHG emissions will be zero, with many industries powered from renewable sources and whatever CO2 they release balanced by carbon-offsetting methods such as tree planting.

It’s an ambitious goal – but the consensus is that it is vital to avoid global warming of 1.5°C by 2050: This equates to 25-26bn tonnes of CO2eq15 that needs taking out of the picture. With a mix of technologies, it seems achievable for aviation – but how?

Carbon trading schemes have made GHG a market and offsetting a strategy: 29 Emissions Trading Systems (ETSs) are in play around the world. But each has incentives and disincentives, and many are gameable, with double-counting rife. In the aviation sector, IATA has adopted CORSIA16 as One Scheme to Rule Them All – an attempt at harmonizing practices across borders.

Another factor is the different legal cultures of the USA and EU. Europe tends to set targets, with penalties for noncompliance; Washington sets goals, with rewards for making headway. But globally, regulation is a vast patchwork between continents, countries, even industries and agencies – and the fit isn’t seamless. 

THE ECONOMIC DRIVERS

WHAT WILL THE SUPPLY CHAIN LOOK LIKE?
Getting to Net Zero will not be cheap. In aviation alone, investments needed total an estimated USD 175bn17 a year, with almost all of it going into fuel production and distribution. In 2020, SAF from current methods cost USD 1.10/liter versus USD 0.50 for fossil-based JET A/A-1. SAF from non-HEFA methods is forecast to be higher, up to five times the fossil price. 

But costs are not the sole factor: the broader economic picture is one of supply and demand. Waste oils from industry and households are one feedstock – but they’re limited in volume, and also in demand from other industries like automotive; the ICCT calculates18 they will be able to cover just 5.5% of total EU jet fuel demand by 2030. Sources for oils and others – solid biomass, waste plastic, and others – are fragmented, although reports from Concawe19 suggest there are sufficient amounts of solid waste biomass to answer demand. And assuming that enough CO2 and renewable power are available, eFuels will also contribute to supply.

THE SOCIAL SCENARIO

WILL PASSENGERS AND FREIGHT CUSTOMERS ADAPT?
What people say and what they do are two different things. Most people support green goals. But with fuel comprising 20-30% of an air ticket, will passengers accept a rise of 30-150% for SAF over fossil JET A/A-1 … or will they simply stop flying? (“No fly policies” are common among Millennials and Zoomers).

The International Transport Federation sees customer demand leading to three possible scenarios20: recover (a post-pandemic rebound that misses Net Zero by 2050) reshape (a renewables-driven shift that limits global warming to 1.5°C) and reshape+ (additional targets that result in 7% lower emissions than 2015 in 2050.) Time will tell which outcome becomes reality.

THE ENVIRONMENTAL ANGLE

ARE THE TARGETS REALISTIC – AND WILL THEY ACHIEVE WHAT’S NEEDED?
Is Net Zero truly achievable? There’s a line between possible and probable – and which side of it the aviation sector ends up on depends on the push and pull of a web of interconnected factors.

CO2 targets can be met if human behavior changes, but that has an impact on GDP, which limits available investment. Governments change their stripes; populations change their minds. And resources ebb and flow with supply, demand, and incentives. But with over 100 governments signed up to the Paris Agreement, a metric has emerged: CI, Carbon Intensity.

Within the EU, the CI target for renewable fuels is a 65% drop from 2021, meaning emissions are capped at 32.9g of CO2eq per megajoule21. California is mandating a 20% cut by 2030, with the US Government setting renewable volume goals for air transport. This means SAF demand may reach 15m tonnes by 2030 and 200m in Net Zero year, 2050. 

THE TECHNOLOGICAL LANDSCAPE

IS TECHNOLOGY ON THE RIGHT PATH?
Driving innovation is technology – and with seven production pathways to both renewable fuels and eFuels currently in development, it’s unlikely that any one will take 100% of the market. Nor should they: a diverse mix will be needed to hit Net Zero.

The most important point here is that SAF is not one technology, or even a single process. It’s a collection of existing and new technologies and processes. Most projections forecast a number of different solutions across the sector by 2050, with shorter flights increasingly reliant on the development of electric and hydrogen technologies. SAF will continue to be indispensable, especially for medium and long-haul flights.

 

Indicative profile of aviation decarbonization technology deployment

Technological landscape

Source: Air Transport Action Group, Waypoint 2050, 2021