Though it is priced two to three times higher than conventional fuel, airlines are securing increasing volumes.
More than 40 carriers have set some form of SAF adoption target. Most aim for the fuel to account for 10 per cent of their consumption by 2030. Latam Airlines and Singapore Airlines have a target of 5 per cent by 2030, and freight carriers DHL and FedEx aim for 30 per cent by the same year. United Airlines has emerged as the top buyer of the clean fuel, having secured 2.9 billion gallons of SAF through offtake agreements and investments. This volume is to be delivered over varying timelines.
The jump in demand has triggered a spurt in production. "Global SAF production capacity is expected to increase 10-fold by the end of the decade, provided projects materialise on schedule and producers lock-in sufficient feedstock volumes," said Jade Patterson, BloombergNEF's renewable fuels analyst. That would meet over 5 per cent of jet fuel demand by 2030.
New developers and existing refiners, such as Neste, Phillips 66 and Shell, are constructing a slew of projects set to come online in the next few years.
"Airlines really want SAF. It is a question of how you make it so they can afford it," said Chris Ryan, chief operating officer of Gevo, a US-based company that is building a greenfield plant to produce SAF. Dubbed Net-Zero 1, the facility is likely to be ready by 2026.
This story is from the March 19, 2024 edition of Business Standard.
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This story is from the March 19, 2024 edition of Business Standard.
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