Wine & Spirits Supply Chain
This Sia Partners' publication explores the current landscape in the Sustainable Aviation Fuel space.
The aviation sector contributes significantly to global carbon emissions, comprising approximately 2% of global energy-related CO₂ emissions and 4% of the EU's total (IEA). Sustainable Aviation Fuel (SAF) is key to reducing the sector’s carbon footprint.
SAF - commonly referred to as bio-or synthetic jet fuel, is designed to significantly reduce carbon emissions from air transportation. Unlike conventional jet fuel derived from petroleum, SAF is produced from non-petroleum feedstocks, such as cooking oil, vegetable oils, municipal waste, agricultural residues, and renewable electricity sources. The key to SAF’s sustainability lies in its ability to meet stringent criteria, ensuring that it delivers at least a 50% reduction in greenhouse gas emissions compared to fossil jet fuel over its lifecycle (IATA).
The production of SAF involves several critical steps:
Feedstock Collection: The raw materials, or feedstocks, are gathered. These include non-conventional sources like used cooking oil, waste products, renewable electricity generated and captured CO₂.
Conversion to Renewable Hydrocarbons: The collected feedstocks undergo a conversion process to transform them into renewable hydrocarbons. This step adheres to ASTM-certified processes to ensure the fuel meets rigorous standards.
Blending: The renewable hydrocarbons are then blended with conventional jet fuel. Each technology allows for blending up to a certified maximum ratio, up to 50%.
Delivery: The blended SAF is delivered to airports and used to fuel aircraft, integrating seamlessly into existing fuelling infrastructure.
SAF is not just a theoretical concept; it is a practical solution that is already in use. With nine certified SAF production pathways, this alternative fuel is becoming increasingly viable and accessible. This publication focuses on four specific SAF production pathways: Hydroprocessed Esters and Fatty Acids (HEFA), Alcohol-to-Jet (ATJ), Biomass Gasification + Fischer-Tropsch (FT), and Power-to-Liquid (PtL).
HEFA is the most prevalent and economically viable technology for producing SAF, used in over 95% of all SAF-powered flights. This process refines vegetable oils, waste oils, or fats through hydrogenation. It involves two main steps: catalytic hydrogenation to produce free fatty acids and propane, followed by hydrodeoxygenation and decarboxylation to convert these acids into long-chain paraffinic alkanes. The primary feedstocks include oils and fats such as vegetable oils (palm, soybean, canola, sunflower), animal fats, waste oils, and greases. While HEFA-SAF offers excellent low-temperature properties and economic viability, challenges include competition with food production and feedstock price volatility.
ATJ technology transforms alcohols, such as ethanol and isobutanol, into SAF through deoxygenation and molecular bonding to achieve the desired carbon structure. The process starts with alcohol feedstock, typically derived from biomass or fermentation processes. Key steps include dehydration, oligomerization, hydrogenation, and fractionation, followed by distillation to produce jet fuel. ATJ-SAF offers higher combustion efficiency and reduced emissions but is more expensive compared to other SAF options like HEFA.
The Fischer-Tropsch (FT) process converts carbon-containing materials into hydrocarbons using biomass gasification. Biomass is heated in a low-oxygen environment to produce syngas, a mixture of carbon monoxide and hydrogen. The syngas is then cleaned to remove impurities and adjusted for optimal hydrogen-to-carbon monoxide ratios. It is subsequently passed over a catalyst to produce liquid hydrocarbons, which are further processed into usable fuels. FT-SAF is highly efficient with minimal waste and does not require an oxygen plant, reducing initial investment costs. However, challenges include maintenance of refractory linings and feed systems, the availability of feedstocks (hydrogen, captured carbon) and the fact that large scale FT production efforts are encountering difficulties.
Power-to-Liquid (PtL) technology uses renewable electricity and non-fossil carbon dioxide to produce synthetic liquid hydrocarbon fuels. The process involves synthesizing hydrogen from water electrolysis and combining it with captured CO₂ using the Fischer-Tropsch synthesis. The resultant synthetic crude oil is refined into different types of fuels, including aviation fuel. PtL-SAF benefits from a diverse supply chain and can be produced in regions with high biogenic carbon, concentrated point-source emissions, and low-cost renewable electricity. However, significant initial investment costs act as a sizable barrier to its adoption.
SAF must adhere to stringent certification processes to ensure it meets the same specifications as conventional jet fuel to ensure safety, performance and sustainability. The certification process encompasses two primary aspects: quality/technical characteristics, and sustainability.
SAF producers must rigorously analyze the fuel’s suitability for aircraft systems, verifying its physical properties, chemical composition, and energy content. Compliance with ASTM standards, such as ASTM D4054 for preliminary evaluation and ASTM D7566 for incorporation into the fungible fuel distribution system, is essential. Regulatory authorities like the European Union Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA) play critical roles in evaluating SAF's safety for aviation use.
Certifications from organizations such as the Roundtable on Sustainable Biomaterials (RSB) and the International Sustainability and Carbon Certification (ISCC) ensure that SAF feedstocks are sourced responsibly and deliver significant greenhouse gas emissions reductions. SAF must also meet the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) sustainability criteria, focusing on carbon reduction, environmental protection, and socio-economic benefits (ICAO).
Globally, governments are implementing various financial incentives to promote the production, distribution, and adoption of SAF. These initiatives are part of broader efforts to address climate change and support renewable energy.
Direct grants and funding are provided to support the research, development, and commercialization of SAF technologies, covering capital costs and pilot projects. Tax incentives, including production and investment tax credits, help reduce SAF production costs and enhance market competitiveness. Low-interest loans and loan guarantees mitigate financial risks for SAF projects, encouraging private sector investment in production facilities and infrastructure. Additionally, funding for research and development fosters innovation in SAF technologies, improving efficiency and reducing costs through public-private partnerships.
Governments are setting renewable fuel mandates that require the blending of renewable fuels like SAF into aviation fuel, thereby creating market demand and encouraging production. Furthermore, carbon taxes and cap-and-trade systems incentivize the use of low-carbon fuels by pricing carbon emissions, with notable examples in Mexico, the EU, South Africa, and Chile.
SAF is highlighted as a promising solution to decarbonize the aviation sector by reducing the amount of carbon emissions produced by air transportation. The key impact of SAF lies in its lifecycle. During combustion, SAF and fossil fuels emit similar amounts of CO2. However, SAF primarily uses carbon from the current carbon cycle, meaning the CO2 emitted during a SAF-powered flight is reabsorbed during SAF production.
The lifecycle of conventional jet fuel involves oil recovery, extraction, refining of crude oil, and blending with petroleum distillation products. This is followed by downstream distribution and end use. In contrast, SAF production starts with feedstock cultivation (with feedstocks including Jatropha, Camelina, used cooking oil, corn stover, poplar, willow, forestry residues, corn, and sugar cane). These feedstocks undergo pre-processing and are converted into fuel through various pathways as explained above, before being blended and finally distributed.
With significant savings upstream using SAF pathways, there is an overall lifecycle potential reduction of 60% emissions compared to the fossil fuel emissions baseline.
While SAF is considered as a key solution for decarbonizing the aviation sector; economic, production, supply chain, market, environmental, and legal challenges exist which currently hinder its widespread adoption.
Economic Barriers to SAF Adoption: SAF production is currently 2-3 times more expensive than traditional jet fuel. Achieving net-zero emissions by 2050 requires an estimated $1.45 trillion investment in infrastructure, including the construction of 5,000-7,000 new SAF facilities, each producing an average of 83 million liters annually. The global cost of purchasing SAF from 2023 to 2050 is projected to be $5.3 trillion, with airlines having already spent $4.3 trillion on fuel over the past 30 years. Mitigating factors include economies of scale and feedstock price reductions, which are expected to lower SAF production costs. Additionally, private institutional investments, government incentives, and long-term agreements are crucial to supporting SAF development.
Production/Supply Chain Challenges: To meet net-zero targets, annual SAF production must increase significantly from 300 million liters in 2023 to 475 billion liters by 2050 (World Economic Forum). Current production relies heavily on HEFA technology, which uses feedstocks that are in limited supply such as animal fats and used cooking oil, leading to scalability issues. Government incentives and regulations are driving the scale-up of production, with SAF production expected to triple to 2 billion liters by 2024. Long-term purchase agreements and the development of high-energy crops are also being explored to ensure consistent supply.
Environmental Challenges: While SAF aims to reduce environmental damage, it still produces CO2 and non-CO2 by-products. Sourcing sustainable feedstock at competitive prices remains a challenge. Ethanol-based SAFs in particular can lead to higher CO2 emissions and increased food prices. Potential solutions include building integrated value chains, implementing new agricultural practices, and developing non-ethanol-based e-fuels. Continued research and a universal definition of 'sustainable' are essential for the long-term viability of SAF.
Legal Challenges: Legal challenges include regulatory obstacles and a lack of cohesive policy across countries. False advertising claims and stringent criteria for SAF eligibility under programs like CORSIA complicate adoption. Airlines are advised to develop strategies for scaling up production, advocate for government support, and ensure environmental impact statements are accurate to avoid accusations of greenwashing.
Addressing these challenges through coordinated efforts among governments, industry stakeholders, and private investors is crucial to achieving widespread SAF adoption and meeting global net-zero emissions targets.
At Sia Partners, we leverage our deep expertise in the aviation and fuel sectors to help your organization successfully navigate the complexities of SAF adoption. To do so, Sia Partners provides:
Educational Support through targeted workshops and training, ensuring your team is knowledgeable about SAF policies, technical specifics, and production pathways.
Strategic Support & Business Case services to help your companies develop effective SAF strategies, grounded in our industry insights, to ensure economic and logistical viability.
Operational Support, we assist with SAF purchase agreements, implementation plans, and supply chain optimization, drawing on our experience to streamline your operations.
Commercial Support & Reporting services focus on emission calculations, market analysis, and financial implications of SAF, helping you make informed decisions.