Sustainable Aviation Fuel is key for decarbonizing aviation but challenges remain

Sustainable aviation fuels (SAF) are the most viable near-term solution for reducing emissions in the aviation sector, bringing the world closer to net-zero goals. But despite this promise, the SAF industry is still far from achieving scale and needs more public-private collaboration.

More needs to be done to foment investment and collaboration – and that includes more bold moves from regulators. That is according to a report from PA Consulting, which surveyed nearly 600 (clean) energy specialists in a range of different areas in the aviation ecosystem.

So, will SAFs finally take off? There is a lot of promise in green fuels, but not many are confident they will scale any time soon. Fewer than half of the industry believes that there will be large-scale adoption of SAFs by 2030, and only 8% of respondents said they were ‘very optimistic’ that this goal would be achieved.

Investors are the most optimistic about widespread SAF adoption, though at 44%, it is still a minority. Despite that, respondents believe in the promises: A whopping 92% said SAFs are crucial to decarbonization efforts, with 86% also saying that SAFs are the best option for decarbonizing aviation.

Barriers to progress

One of the main barriers to further adoption of SAF is cost: It is currently too expensive. Nearly all respondents (92%) said that the higher price of sustainable fuel was a ‘significant or moderate’ barrier.

What’s more, prices are not stable because supply is not stable – and many in the aviation industry believe prices will continue to rise. There is a big divergence in views on costs, with airlines predicting costs to double (around a 98% cost increase) while producers expect costs to more than double (a 148% increase).

Putting projections aside, the reality is that right now, SAF is not yet being produced at scale and is not widely available. That is despite expectations of a huge increase in demand looking forward to 2030. Clearly, there needs to be a lot more investment and coordination.

Airlines not yet sold on SAF

Most airlines have not yet committed to using SAF, in large part because of the high costs involved. The survey found over a third (35%) are not currently using SAF at all – and of those, 37% do not have any plans in place to adopt SAF in the future.

Most airlines operate on tight margins, so an increase in costs is typically out of the question. But solutions could include regulators working with the aviation industry to subsidize production and use of SAF. Regulation could also target investors to make funding sustainable fuels more attractive.

“Just as governments once mobilized to accelerate investment in wind and solar in the early 2000s, and more recently electric vehicles, it’s now time to bring that same focus and ambition to SAF – with industry playing its part in making it a reality,” said Kata Cserep, global aviation lead at PA Consulting.

The EU’s ambitious regulations

The findings of the survey show a misalignment between the aviation sector and regulations, which could be unrealistic in some cases. The European Union, under the ReFuelEU aviation regulation, aims to cut greenhouse gas emissions from aviation by more than 60% by 2050. But that is not likely to happen unless things change for SAF availability.

One of the main conundrums for the EU is that the specific types of SAF that are most available now (those made from biofuels) are not the most desirable – and the more desirable SAF types (synthetic aviation fuels) are not yet produced at scale. In addition to that, there are lingering concerns over supply chains and tariffs, which affect the supply of biofuels.

“CO2 does not stop at the border. If only Europe focuses on it, the market there will shrink. And other airlines without SAF rules will grow. So we need global mandate solutions,” said Michael Nau, director of sales and sustainability at Lufthansa.

The PA Consulting report suggests that airports, airlines, investors, fuel producers, and regulators should look to act now and adapt as the industry scales. The most important thing is to get the ball rolling – perfecting the industry can come later. The various ecosystems need to be aligned around one mission, with a focus on reducing costs and increasing collaboration.