Sustainable Aviation Fuel Momentum Accelerated by the Business Travel Sector

An increasing number of companies are purchasing bulk quantities of sustainable aviation fuel.

To reduce their carbon footprint, increasing numbers of companies are buying bulk quantities of sustainable aviation fuel (SAF). This encourages mass production of cleaner energy needed by airlines to reach their emission targets.

Corporate customers can now buy SAF that is not tied to individual flights from airlines, fuel producers, and travel agents. This allows companies to go beyond carbon offset options such as planting trees, to help reduce the environmental impact of flying.

Industry's shift to a "book-and-claim" accounting system, similar to that used in the renewable electricity sector, allows for greater flexibility due to the relative scarcity SAF. This feedstock uses cooking oils to reduce emissions by up to 80 percent compared to conventional fuel. However, it is only available at a few airports worldwide.

Five companies have agreed to pay a premium in order to reduce their carbon emissions through a Qantas Airways deal. They will contribute to the cost of using SAF from BP at London's Heathrow Airport.

Companies involved can request an emission reduction for a range of purposes, which are not tied to their business travel between London and Australia.

Boston Consulting Group (BCG) is also purchasing SAF through United Airlines, as well as fuel suppliers SkyNRG/Neste. It stated that it wanted to scale up the SAF market in order to achieve internal targets.

"Our largest source of emissions come from business travel, and there we have committed to cut our emissions intensity in half by 2025, compared to 2018," BCG chief sustainability officer David Webb said.

Australia Post, another Qantas Partner, stated that it would use the credits in order to reduce its air freight emissions at a time SAF is not available in Australia.

Qantas stated that the more companies that sign up for the program, the more viable and cost-effective a local SAF industry will become.

Increasing numbers of airlines, such as United, Lufthansa and Cathay Pacific Airways, Air France KLM, Japan's ANA Holdings and Cathay Pacific Airways, offer similar programs.

SAF was only 0.5% of aviation fuel in 2021. However, many airlines set a target to reach 10 percent by 2030. The industry's goal for "net zero" emissions by 2050 is dependent on SAF accounting representing 65 percent of fuel.

According to Denise Auclair (manager of corporate travel campaigns at European non-governmental organisation Transport & Environment), the interest in from the corporate sector could provide momentum for the SAF industry's growth . Given that businesses account for approximately 20 percent of global air travel and 30 percent in Europe respectively, Denise Auclair, manager of corporate travel campaign, stated that this could be a catalyst for the SAF industry's scaling up .

Only a few airlines, such as Finnair or Scandinavia's SAS, allow customers to pay SAF to reduce their flight emissions.

'Green Premium'

Although SAF is more expensive than buying emissions offsets, experts agree that it can help reduce travel emissions.

SAF is more expensive than regular jet fuel so companies are paying a premium. Sami Jauhiainen (Vice President of Asia Pacific, Neste's Renewable Aviation Business), said that SAF costs three to five times as much.

"They contract with us, they pay for the cost premium of sustainable aviation fuel over the conventional jet fuel, and then enable us to deliver sustainable aviation fuel for our partner airlines to consume," he said. "And then we can support the end customer with relevant reporting and documentation that they need to recognize the benefits."

Companies can contract directly with airlines, travel agents like American Express Global Business Travel (Amex GBT), and fuel providers such as Neste to claim SAF credits. This will help them avoid double-claiming.

According to a World Economic Forum white paper on SAF accounting guidelines and reporting guidelines, double claiming will be more common as more countries require a certain amount of SAF blended into all aviation fuel. France has already imposed a 1 % requirement. The European Union will require 2% starting in 2025.

Amex GBT partnered with Shell and Accenture in order to develop a blockchain-based platform that ensures corporate customers' certificates are not fungible in the largest pilot of claim and book to date.

Drew Crawley, chief commercial officer at Amex GBT, stated that the platform allows customers to purchase SAF and fly any airline they choose.

 

Source: skift.com