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The pandemic travel reprieve gave airlines the opportunity to refocus their sustainability initiatives. Several rounds of government largesse helped the sector stay afloat before travel began to trickle back earlier this year.
Now, as travelers return to the sky again, the race is on to accelerate the market for sustainable aviation fuel (SAF).
At the end of September, Delta Airlines signed an estimated $1 billion deal with Aemetis, a renewable fuels company, for 250 million gallons of SAF to be delivered over the next decade.
One day before Delta’s September proclamation, JetBlue announced an estimated $1 billion agreement with SG Preston, a bioenergy developer, to bring the largest supply of SAF to New York airports for commercial flights. The deal marked JetBlue’s largest single jet fuel contract to date. The agreement, according to JetBlue CEO Robin Hayes, puts JetBlue ahead of schedule in meeting a 10 percent SAF goal by 2030.
It doesn’t stop there. United Airlines earlier in September signed up to buy 1.5 billion gallons of SAF over 20 years — billed as the biggest SAF agreement in history — in a deal with Honeywell and cleantech company Alder Fuels.
In the short term, SAF comes at a premium cost, but as production grows and more [federal] incentives are introduced, that price should lower.
Aside from their individual efforts, these airlines and others are flying in formation to support the SAF cause: Alongside 30 aviation leaders, Delta and United last week joined Mission Possible Partnership in an initiative that lays out an ambitious pathway for phasing out fossil jet fuel by 2050. The goal is to reach 10 percent SAF by 2030 — a target that requires an estimated $300 billion annual investment, according to the coalition.
The SAF flight path
Many experts and executives across the airline industry see SAF as the main path forward toward sustainable aviation — even though it will be years before planes can fly exclusively using this sort of fuel.
And pressure is mounting to find an alternative flight path. Before COVID-19, airlines contributed about 2 percent of human-induced carbon emissions, and aviation is estimated to be responsible for 12 percent of carbon emissions from all transport sources.
“There are no electric planes on the horizon, so the reality is planes will be burning fuel for a long time,” Jeremy Baines, president of Neste US, told me. On its website, Neste describes itself as the largest producer of renewable diesel and sustainable aviation fuel. “The choice then becomes, do we burn fossil fuels or do we burn renewable fuels? And we can’t really wait any longer to answer that,” Baines said.
Neste, which works with both Delta and JetBlue, among other airlines, is projecting it will produce 515 million gallons of SAF by the end of 2023. (For context, the aviation sector used over 18.27 billion gallons of total jet fuel in 2019.) The company says its blend — developed using substances such as agricultural waste and animal fats — can reduce greenhouse gas emissions up to 80 percent compared to fossil fossils-derived jet fuel.
Colloquially called “drop-in” fuel, Neste’s MY Sustainable Aviation Fuel can go directly into airplanes without any structural modifications to the vehicle. “We use the same infrastructure at airports, it goes into the same fuel tank, the same engine, and has an immediate impact from the moment you use it,” Baines said.
The biofuel giant’s 2020 deal with JetBlue allowed the airline to become the first major U.S. airline to claim carbon neutrality on domestic flights through carbon offsets and emission reductions. “We see SAF as the most promising means of directly and rapidly reducing your craft emissions,” said Sara Bogdan, head of sustainability and ESG at JetBlue. “But we’re also working to improve fuel efficiency in our ground vehicles, and increase our volume of offsets.”
Filling an airplane tank entirely with SAF remains years away, however. The fuel technology itself is viable, yet SAF makes up less than 1 percent of available fuel on the market. It also costs four to five times the amount of Jet A-1, or conventional plane fuel. Even though it would be feasible to power an airplane with 50 percent of each fuel, these days, SAF contributes a measly amount per tank due to market limitations.
But even if fuel tanks blend in just 1 to 2 percent of SAF, Baines said it can still make a difference because the total volume of nonrenewable fuel is shrinking. That mindset of progress is what companies such as Delta and JetBlue pride themselves on.
“Our actions really tell our consumers, ‘Hey, we’re doing something right now that should give you confidence to fly sustainably with us,'” said Amelia DeLuca, managing director of sustainability at Delta. The airline, according to DeLuca and Delta’s marketing team, is currently the only carbon-neutral airline on a global scale. Delta directly reduces its emissions through carbon offset project investments intended to combat deforestation.
The government factor
Although the gas-guzzling airline sector may not be top of mind when it comes to sustainability, a sea change is already underway. “I would venture that Delta and JetBlue make some of the biggest voluntary carbon offsets in the world,” Bogdan said. Both companies’ billion-dollar SAF deals have reinforced goals with capital and action, as well as their shared belief that, eventually, the cost to produce SAF will get cheaper.
“Yes, in the short term, SAF comes at a premium cost, but as production grows and more [federal] incentives are introduced, that price should lower,” she said.
“Policymakers need to come out in support of making the whole industry more sustainable,” Baines added. “That means smart policies, government incentives and targets for fuel that the whole industry can follow.”
In June, a group of U.S. Senators introduced the Sustainable Skies Act, which aims to facilitate and promote the transition to sustainable aviation fuel. The legislation, which major airlines applauded, would create a tax credit starting at $1.50 per gallon for “blenders that supply sustainable aviation fuel with a demonstrated 50 percent or greater lifecycle estimate reduction in greenhouse gas emissions compared to standard jet fuel.”
To Bogdan, incentive programs can help make SAF more affordable for airlines and their customers. Added government support also acts to minimize risk for investors backing sustainability initiatives and sustainable fuel development.
The bill, ideally, could help bridge the gap between rising fuel costs and the price customers pay for plane tickets. Producers will be encouraged to make more SAF, and airlines will be encouraged to use more SAF — which can ultimately empower customers to feel as if they, too, can make an impact in sustainable travel.
“There’s a lot of customer pressure on airlines,” said Sarah Green-Vieux, chief impact officer of Kindred, an executive membership firm that provides ESG consulting. “Customers are now looking more at the environmental practices of the organizations where they spend their dollars, and that external pressure can cause a company to change or the development of a policy response.”
One example is multinational corporate giant Deloitte, which has made a commitment to SAF from the buyer’s side.
Alongside RMI, Microsoft, JPMorgan Chase, Boeing and others, Deloitte is a founding member of the Sustainable Aviation Buyers Alliance (SABA). The coalition’s priority is the development of SAF and SAF-related policy-making through corporate action.
“Low-carbon aviation is really important to us,” said Lisa Newman-Wise, senior manager and sustainability and climate chief of staff at Deloitte. “Travel is a significant part of Deloitte’s carbon footprint, so this [coalition] is one way we’re aiming to reach employee emissions reduction.”