Introduction
In the face of growing environmental concerns, the logistics industry stands at the crossroads of innovation and sustainability. As logistics managers and CEOs, the decisions we make today will shape the future of our industry and our planet. One of the most promising developments in this regard is the rise of Sustainable Aviation Fuel (SAF).
SAF is not just another buzz word in the industry; it represents a significant shift towards reducing carbon emissions in air transportation. It’s a liquid fuel that can be used in commercial aviation, and it has the potential to reduce CO2 emissions by up to 80% (Chiaramonti, 2019).
In the following sections, we will delve deeper into what SAF is, its potential, current state, and future prospects. We will also explore how embracing SAF can help logistics companies contribute to a more sustainable future..
Aviation and Carbon Emissions
Figure 1: Global carbon dioxide emissions from aviation. Source: (OurWorldInData, 2020)
A single long-haul flight can produce more carbon emissions within a few hours than what an average individual in 56 different countries generates in an entire year (The Guardian, 2019).
In a nutshell, the graph in Figure (1) illustrates the time series of global aviation emissions dating back to 1940. In 2018, the combined emissions from passenger and freight aviation amounted to approximately 1.04 billion tonnes of CO2, contributing to 2.5% of the total CO2 emissions for that year. Despite a doubling of aviation emissions since the mid-1980s, their growth rate has aligned with the overall increase in total CO2 emissions. Consequently, aviation's proportionate contribution to global emissions has remained relatively stable, fluctuating between 2% and 2.5% (Ritchie & Roser, 2023).
This raises a critical question: Can the aviation industry ever align itself with a net-zero world?
One promising strategy for airlines to reduce their emissions involves shifting from traditional petroleum-based fuels to a low-carbon substitute known as sustainable aviation fuel (SAF).
As Figure (2) demonstrates, the International Air Transport Association (IATA) estimates that Sustainable Aviation Fuel (SAF) has the potential to contribute approximately 65% of the necessary emissions reduction required for the aviation sector to achieve net-zero status by 2050 (IATA, 2022).
Figure 2: Contribution to achieving Net Zero Carbon in 2050 within the aviation industry. Source: (IATA, 2022)
Understanding Sustainable Aviation Fuel (SAF)
Definition and Explanation of SAF
Sustainable Aviation Fuel (SAF) is a sustainable, non-conventional alternative to fossil-based jet fuel. It’s produced from sustainable feedstocks and is very similar in its chemistry to traditional fossil jet fuel (BP, 2022).
Using SAF results in a reduction in carbon emissions compared to the traditional jet fuel it replaces over the lifecycle of the fuel. Some typical feedstocks used are cooking oil and other non-palm waste oils from animals or plants; solid waste from homes and businesses, such as packaging, paper, textiles, and food scraps that would otherwise go to landfill or incineration (BP, 2022).
Figure 3: Lifecycle of SAF. Source: (Action Renewables Energy Trading Ltd, 2022)
How SAF Differs from Conventional Aviation Fuel
SAF differs from conventional aviation fuel in several ways:
1. Carbon Emissions: SAF can reduce life cycle greenhouse gas (GHG) emissions dramatically compared to conventional jet fuel. Depending on the feedstock and technologies used to produce it, some emerging SAF pathways even have a net-negative GHG footprint (Office of Energy Efficiency & Renewable Energy, 2022).
2. Source: Unlike conventional jet fuel, which is derived from petroleum, SAF is made from sustainable feedstocks like waste oil and fats, green and municipal waste, and non-food crops (BP, 2022).
3. Chemical Composition: SAF is chemically similar to conventional jet fuel and can be used with existing infrastructure. However, SAF still has to be blended with traditional aviation fuel, which is made from fossil fuels (World Economic Forum, 2023).
4. Sustainability: SAF is ‘sustainable’ because the raw feedstock does not compete with food crops or water supplies, or is responsible for forest degradation. Whereas fossil fuels add to the overall level of CO2 by emitting carbon that had been previously locked away, SAF recycles the CO2 which has been absorbed by the biomass used in the feedstock during the course of its life (IATA, 2022).
Advantages of SAF in Logistics
Environmental Benefits
SAF has the potential to significantly reduce greenhouse gas emissions and lower the carbon footprint of the aviation industry (World Economic Forum, 2023). As mentioned earlier, depending on the feedstock and technologies used to produce it, SAF can reduce life cycle GHG emissions dramatically compared to conventional jet fuel. Some emerging SAF pathways even have a net-negative GHG footprint (Office of Energy Efficiency & Renewable Energy, 2022).
Compliance with Regulatory Standards and Corporate Sustainability Goals
The use of SAF helps airlines comply with regulatory standards and meet corporate sustainability goals (ICAO, 2022; IATA, 2022).
For instance, the International Air Transport Association (IATA) has set a goal for the aviation industry to achieve net-zero carbon emissions by 2050. They estimate that SAF could contribute around 65% of the reduction in emissions needed by aviation to reach this goal(IATA,2022).
Moreover, the UK government has introduced a rule that at least 10% of aircraft fuel should be made using sustainable materials by 2030 (World Economic Forum, 2023).
Economic Implications
The economic implications of SAF are multifaceted. On one hand, the cost of SAF is currently higher than that of conventional jet fuel (Grimme, 2023). However, advancements in technology and increases in production could potentially lower these costs in the future. Moreover, there are potential economic benefits associated with the use of SAF. For instance, airlines that use SAF may be eligible for carbon credits, which can provide significant cost savings (Sharma et al., 2021).
Additionally, as the demand for sustainable practices grows among consumers, the use of SAF could help airlines attract a larger market share (Grimme, 2023).
Challenges and Limitations
Availability and Scalability
While SAF is available today and can be used without the need to develop new planes or engines (KPMG, 2022), the current production capacities of SAF are well below industry needs (KPMG, 2023). The SAF type currently predominant, i.e., biofuels, faces real availability and scalability challenges, stemming mainly from supply chain bottlenecks and doubts over the sustainability of feedstocks (KPMG, 2023).
As per (IATA, 2023), over 130 relevant renewable fuel projects have been announced publicly by more than 85 producers across 30 countries. These projects represent an estimated total renewable fuel capacity of over 69 billion liters (55 million tonnes) by 2028. However, there is typically a 3-to-5-year lag period between a project announcement and its commercialization date.
Cost Concerns and Economic Feasibility
The cost of SAF is currently higher than that of conventional jet fuel. However, advancements in technology and increases in production could potentially lower these costs in the future. Airlines that use SAF may be eligible for carbon credits, which can provide significant cost savings. As the demand for sustainable practices grows among consumers, the use of SAF could help airlines attract a larger market share (PWC, 2022). However, as mentioned before, the economic feasibility of SAF is still a topic of ongoing research and discussion (Sharma et al., 2021).
How to purchase SAF?
Buying sustainable aviation fuels parallels purchasing renewable energy. Just as consumers lack control over the energy supplied to their homes, travellers and cargo purchasers have no say in the fuel used for their cargo flights.
That’s where SAFc comes in.
Sustainable Aviation Fuel Certificates (SAFc) function similar to Energy Attribute Certificates (EACs) in the renewable energy market (DHL, 2023).
Energy Attribute Certificates (EACs) are virtual documents that provide a renewable energy buyer the opportunity to document and track its electricity consumption. They are used for documenting and tracking the exact location where the renewable energy is produced (Pasichnyi et al., 2019).
The Sustainable Aviation Fuel Certificate (SAFc) is a new accounting tool developed through the World Economic Forum’s Clean Skies for Tomorrow (CST) initiative. The SAFc system allows for the emissions reductions from the use of sustainable aviation fuels (SAF) to be claimed by the traveller if they cover the higher cost of the fuel (World Economic Forum, 2022).
SAF certificates enable companies and other aviation customers to pay for the environmental benefits - such as emissions reductions - of SAF, even if the physical fuel is not yet available for their flights (Pasichnyi et al., 2019). This is a critical step in developing a standardized approach, proposing a consistent and transparent book and claim methodology to account for the carbon benefits of SAF across the value chain (World Economic Forum, 2022).
Fuel producers create an SAFc for each metric ton of SAF generated from eco-friendly sources, selling both the physical fuel and its virtual energy attributes as SAFc. Aircraft operators claim direct emissions reduction benefits (Scope 1), while air transport customers can offset indirect emissions (Scope 3) (DHL, 2023).
Conclusion
In conclusion, while SAF presents a promising solution to reduce carbon emissions in the aviation industry, it also comes with its own set of challenges and limitations. Overcoming these will require concerted efforts from policymakers, industry stakeholders, and researchers.
Problems Solved Ltd is at the forefront of revolutionising sustainable logistics solutions. Confidently addressing complex business challenges, we thrive on crafting tailored, sustainable strategies that transform traditional operations. If you would like to learn more about Insetting or indeed would like support in making it work for you please contact us on info@psolved.com.
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