SAF, please prepare for take-off…even with aviation industry turned upside down due to pandemic

There were 22 weekdays in April. There were 15 announcements about sustainable aviation fuel progress, advancements, implementations, and production in just those 21 days. What does that mean? Why is SAF suddenly taking off like never before, even as the aviation industry was turned upside down due to the COVID-19 pandemic? Why are companies pivoting from other fuels to focus on SAF?

In today’s Digest, let’s kick the tires and light the fires as SAF is cleared for take-off. The latest SAF news and what it means.

Neste’s News

Let’s start with the most recent big news that Neste will convert up to 500,000 tons of its existing renewables production capacity at Rotterdam refinery for SAF. Currently the refinery produces mainly Neste MY Renewable Diesel. The modifications to the refinery, an investment of approximately EUR 190 million, will enable Neste to optionally produce up to 500,000 tons of SAF per annum as part of the existing capacity.

Neste expects the project to be completed in the second half of 2023. This extends Neste’s growing footprint in the Netherlands and demonstrates the shared sustainability ambitions of Neste, the Dutch government, and the Port of Rotterdam in particular.

Together with the company’s ongoing Singapore refinery expansion, Neste will have the capacity to produce 1.5 million tons of sustainable aviation fuel annually by the end of 2023. Currently Neste’s sustainable aviation fuel annual production capacity is 100,000 tons. Neste MY Sustainable Aviation Fuel, in neat form and over the life cycle, reduces greenhouse gas emissions up to 80% compared to fossil jet fuel.

“This SAF investment in Rotterdam is another important step for Neste in the execution of our growth strategy: to become a global leader in renewable and circular solutions. We have made a commitment to support our customers to reduce greenhouse gas emissions by at least up to 20 million tons by 2030. And as the aviation industry is likely to resume on a growth trajectory after its recovery from the COVID-19 pandemic, there is a growing need and urgency to act on aviation-related emissions. Here sustainable aviation fuels offer considerable potential”, says Peter Vanacker, President and CEO at Neste.

“Aviation is at a turning point towards a more sustainable future”, says Thorsten Lange, Executive Vice President Renewable Aviation at Neste. “This extension of our SAF production capacity will support the aviation industry’s efforts to reduce its greenhouse gas emissions and the climate impact in the coming years. We are pleased that we will be ready to meet the growing demand of SAF, also driven by the European Union’s climate ambitions which will shortly be translated into a proposal for binding legislation across Europe, not least because of the Netherlands’ leading role in this matter. Using SAF gives an immediate reduction of greenhouse gas emissions. It also reduces non-CO2 impacts, which are a large part of the total climate effects of aviation emissions**. And it is already available today.”

Additionally, Neste aims at creating readiness for a final investment decision by the Board of Directors for a new world-scale renewable products refinery project in Rotterdam towards the end of 2021 or early 2022.

This is quite a change in the way Neste has been organizing itself as we see them leaning out beyond renewable diesel and more towards SAF.

So, what is Neste up to?

Is this because their technology now allows them to make SAF more cost-competitively?

Is it because the airlines are starting to move on price?

Is it because Neste sees the RD market becoming saturated at some stage and they want to build up SAF as a secondary market even if the margins are less?

Well, whatever the reason, Neste even teamed up with Finnair this past month to join forces to reduce carbon emissions related to Neste employees’ business travel by using SAF. Neste recently made 300 tons of Neste MY Sustainable Aviation Fuel available at Helsinki Airport in Finland for Finnair’s use.

By replacing a part of the fossil jet fuel with SAF on its flights departing from Helsinki Airport, Finnair will reduce its greenhouse gas emissions by 900 tons of CO2 equivalent. This represents a significant share of the emissions accumulated from Neste employees’ global air travel in 2020.

The collaboration contributes to climate commitments Neste made in 2020, including a commitment to reduce and compensate emissions from its employees’ business travel through the use of the company’s own sustainable aviation fuel. Finnair is a strategic partner for Neste, and also one of the most frequently used airlines for business travel by Neste’s employees. Finnair’s target is to become carbon neutral by 2045, and to halve its net CO2 emissions by the end of 2025.

Neste already has other customers for its SAF, in addition to Finnair. Delta Air Lines and Takeda Pharmaceutical Company Limited entered into a SAF agreement that will address carbon emissions from the company’s business travel with Delta – AND they will be using Neste MY Sustainable Aviation Fuel. Through this agreement, Takeda joins the growing roster of corporate customers entering into SAF agreements facilitated by Delta. In the year since Delta announced its $1 billion commitment to carbon neutrality from March 2020 onward, the company remains focused on carbon reduction and removal and stakeholder engagement to make its operations more sustainable. That’s huge opportunity for Neste’s SAF.

Neste and NuStar Energy are also teaming up on supplying SAF to California airports. Supply trucks are now able to load Neste MY Sustainable Aviation Fuel at the NuStar-operated Selby Terminal near San Francisco, California. The first gallons have been safely picked up and delivered to the nearby Monterey Regional Airport. Due to the strategic location of the Selby Terminal, Neste and its partners Avfuel and Signature Flight Support are now able to supply sustainable aviation fuel to a growing number of airports across the western United States. In 2020, Neste established a continuous supply of SAF to San Francisco International Airport from NuStar’s Selby Terminal using an existing pipeline – a first for the industry.

Let’s dive into some of the other noteworthy SAF news stories.

Who’s making it?

First, Neste isn’t the only one jumping into the SAF action. In France, Total has begun producing SAF at its La Mède biorefinery in southern France and its Oudalle facility near Le Havre. The biojet fuel, made from used cooking oil, is already being delivered to French airports (started in April 2021). Total will also be able to produce SAF as from 2024 at its zero-crude Grandpuits platform, southeast of Paris. All of these sustainable aviation fuels will be made from animal fat, used cooking oil and other waste and residues. Total will not use vegetable oils as feedstock. In this way, Total will be in a position to respond from its production sites in France to new French legislation that calls for aircraft to use at least 1% biojet fuel by 2022, 2% by 2025 and 5% by 2030.

In California, Aemetis, is now using Axens Vegan Renewable Hydroprocessing technology for its “Carbon Zero 1” production plant in Riverbank, California which makes both SAF and renewable diesel. The Axens scope will include technology license, basic engineering, catalyst supply, and proprietary equipment for the conversion of ultra-low carbon intensity, non-edible vegetable and other non-edible oils along with renewable cellulosic hydrogen to produce a flexible mix of SAF and renewable diesel fuel.

In South Africa, Sasol Ltd will work with a consortium comprising Linde PLC, ENERTRAG AG and Navitas Holdings – the LEN Consortium – to bid in concept for the production of SAF under the auspices of the German Federal Government’s H2Global auction platform. The LEN Consortium will enable Sasol to work with world-class partners on the opportunity, employing its extensive experience to produce liquid fuels and chemicals with Fischer-Tropsch (FT) technology.

Who’s buying it?

In the UK, International Airlines Group said it will purchase one million tonnes of SAF per year enabling it to cut its annual emissions by two million tonnes by 2030 – which is about 10% of its flights with SAF. In addition, IAG will become the first airline group worldwide to extend its net zero commitment to its supply chain. The Group will be working with its suppliers to enable them to commit to achieving net zero emissions by 2050 for the products and services they provide to IAG.

IAG is investing US$400 million in the development of SAF in the next 20 years. The Group is partnering with sustainable aviation fuel developers, LanzaJet and Velocys. This includes Europe’s first household waste-to-jet fuel plant in the UK which will start operations in 2025. British Airways will also purchase sustainable jet fuel from LanzaJet’s US plant to power some of its flights from late 2022.

United Airlines launched first-of-its-kind Eco-Skies Alliance to boost SAF demand. Working with the airline, more than a dozen leading global corporations will collectively contribute towards the purchase of approximately 3.4 million gallons of SAF this year. As inaugural participants, the following companies are taking a lead within their respective industries, reducing their aviation-related impact on the environment at the source, and creating demand for more SAF production:

• Autodesk
• Boston Consulting Group
• CEVA Logistics
• Deloitte
• DHL Global Forwarding
• DSV Panalpina
• HP Inc.
• Nike
• Palantir
• Siemens
• Takeda Pharmaceuticals

United has made the airline industry’s single largest investment in SAF and has purchased more SAF than any other airline in the world. World Energy, a long-term partner of United, will supply the SAF to Los Angeles International Airport (LAX), which makes it conveniently accessible to United’s operations.

Speaking of airlines making a difference, Alaska Airlines and SkyNRG Americas signed an MOU to boost SAF investment. The MOU builds on a long history of Alaska leadership advancing SAF and partners the airline with the global SAF pioneers at SkyNRG Americas.

Under the MOU, SkyNRG Americas will initially focus on the development of dedicated SAF production facilities to supply Western U.S. airports. These facilities will use commercially available technologies that enable the use of municipal solid waste and other waste-based inputs as feedstocks, as well as incorporating green hydrogen and renewable energy for minimizing carbon intensity. Beyond the focus of building out SAF production capacity, SkyNRG Americas and Alaska Airlines will continue to build awareness and understanding of SAF technologies, and advocate for public policies to accelerate the development of the SAF industry and infrastructure. This collaboration builds on the Alaska-Microsoft partnership announced in October 2020, aiming to use SAF to offset Microsoft employee travel between Seattle and San Francisco, San Jose, and Los Angeles.

In France, Clermont-Ferrand Auvergne Airport becomes the country’s first airport supplying SAF. This step, initially expressed by Michelin Air Services, demonstrates the desire of VINCI Airports, SMACFA and the Auvergne-Rhône-Alpes Region to promote low-carbon air mobility, with biofuels representing an effective and mobilizable short-term response to the challenges of the ecological transition in aviation. The fuels are supplied by Air BP under a refueling contract with VINCI Airports. These biofuels are produced from used cooking oil.

The Sustainable Aviation Buyers Alliance was also just launched to promote investment in SAF. Launched by RMI and Environmental Defense Fund, SABA is also supported by founding companies Boeing, BCG, Deloitte, JPMorgan Chase, Microsoft, Netflix, and Salesforce. SABA’s mission is to accelerate the path to net zero aviation by driving investment in high quality SAF, catalyzing new SAF production and technological innovation, and supporting member engagement in policy-making.

Bottom Line

The only thing constant is change, and while we don’t necessarily know the reasoning behind some of these latest changes at Neste for example, we know there are a myriad of possibilities. Nonetheless, the changes show promise for the future and further expansion and implementation of sustainable aviation fuel. After all, in a mere 21 days in April, the sheer number of announcements and news coming in on SAF is astounding. As you can see there are lots of SAF producers and buyers and promoters and it’s inspiring to see them all collaborating and working together towards a common goal.

SAF – you’ve got clearance for take-off.