Debate on Sustainable Aviation Fuel (SAF) in Europe

Held on 4th February, 2020 at EU Parliament in Brussels.

This past Tuesday, February 4, FGA were invited to attend a debate about ‘Sustainable Aviation Fuel (SAF) in the EU’. The event was hosted by the Airport Regions Council (ARC) and held at the EU Parliament Building in Brussels. The debate marked the final installation of a series of discussions that have taken place over the last year. The event was organised by the joint effort of the EU Commission, SENASA, ARC, Flightpath, and ARTFuels. Many important industry stakeholders were in attendance, including IATA, EUROCONTROL, KLM, and SkyNRG, just to name a few.

The meeting was an opportunity for DG representatives to highlight active projects that are strongly aligned with the EU’s recently announced new Green Deal. LeCompte, a member of DG MOVE, stated it is a high priority ‘to reduce emission transmissions’, but ‘not completely reduce the benefits of connectivity’ that aviation travel has provided Europeans. He mentioned that a ‘smart and sustainable strategy’ will be coming online later this year, which will include initiatives for alternative fuel, both production and supply. Though, the focus of the debate was SAF, there was acknowledgement that other transport modes are in demand of alternative fuels as well, namely road and rail. In addition, there was reference to a few upcoming SAF refinement plants and suppliers, whose facilities should be going into construction in the near future, public announcements would be made by private and public entities later this year.

Two very interesting discussion points noted were: (1) Member States interest and request for blended mandates, many believe these are critical to push this initiative forward at a faster pace and to ensure more investor confidence in the industry, and (2) being mindful of the time it will take to scale-up other approved ASTM pathways, prior to enforcing mandates, so that no additional pressure and demand is placed on the HEFA pathway (which needs to be predominantly phased-out by 2030 per RED II).

Lastly, Robert Boyd, of IATA, posed the question to the group: does ‘CORSIA or RED II have more impact in the EU?’, to which he stated CORSIA, though a carbon-offsetting mandate, ‘accelerated airline awareness’. Which many would argue was an important step prior to unveiling RED II because CORSIA does require the aviation industry to monitor and report on their emissions yearly; the first step towards making data-driven strategic decarbonisation decisions. Raising awareness is a large portion of FGA’s mission because we believe SAF will have a crucial role to play in decarbonising the aviation industry and work on this has commenced, beginning with speaking to corporate travellers about its scope and potential for reducing emissions in the sector.

Overall, this information is very much in-line with what FGA has been focusing on as we continue to investigate the most sustainable ASTM pathways for creating SAF and helping to solve the funding strategies needed to make these pathways commercialised, thereby financially accessible for airlines. We hope you will stay connected with us as we continue to follow this discussion and closely monitor what measures are being taken in Brussels and around the EU.

Traveldoo & The British Travel Association presents 'Planet Plan Sustainability Conference'

Held on 4th February 2020, at Expedia’s office, London.

This week we were part of a timely gathering of travel management companies, airlines, train companies and corporate travel buyers all interested and ready to make changes to reduce emissions in the industry. The agenda put together by Sam Cande of Traveldoo was very well received, developed interesting debate and opened up the floor to many questions.

Flying was certainly on the agenda with one panel dedicated to whether airlines can achieve net zero by 2050. Lufthansa, easyJet and FGA were asked questions, by Clive Warren of The British Travel Association, on technology, investment and about the need to fly less?

We discussed that, our work at FGA, also expands to looking into remote working, policy and carbon offsets and that we don’t see that there is just one solution. Sarah, founder of FGA discussed their involvement in a project with The Port at CERN which explores these factors further; the project just being shortlisted for a circular economy startup competition through the Impact Hub Zurich. Research being at the core of FGAs work.

It was acknowledged that the aviation industry states: fleet update, more efficient air traffic management and sustainable aviation fuels (SAF) as being the 3 main decarbonisation factors in the short to medium term. We discussed the definition of short term, being at least 5-10 years, and that scale up of SAF/carbon neutral won’t happen overnight due to funding not being there right now, nor the customers. easyJet and Lufthansa stating that SAF is too expensive for them to purchase and that aviation is such a price sensitive sector. This is agreed in the industry which is why we need to increase supply of SAF and encourage demand to bring prices down; as with all new innovations the price starts high and reduces over time. Creative solutions need to be found and much work on finding those initial early adopters is needed.

easyJet discussed that electric planes (eviation) are their go-to decarbonisation solution for 2030 due to their focus on short haul flights.

FGA brought up that there will be conscious customers and an audience willing to pay to fly sustainably in the future. Work has started by many in the industry to build this new customer base including companies such as SkyNRG, KLM, Neste, Fulcrum Bioenergy and Gevo.

FGA are building awareness for the industry and will be part of the line up at the next CACTUS meeting, a group set up for climate action in the corporate traveller group, and will be held at the Microsoft office in London 28th February.

The event happened just as the UK Government releases their 2050 decarbonisation plan for aviation.

There was great turn out this week and big a realisation that there is much to work on the energy transition in the travel industry. See the event on linkedIn here and here.

Which market mechanisms will see the SAF industry take off?

Last July FGA spoke to Giles Dickson, CEO of Wind Europe, on the advice of a European Commission energy specialist.

Giles talked through the mechanisms Wind Europe used in their role as the association building the renewable electricity industry from wind.

Giles discussed that PPAs (power purchase agreements) were put in place with high-profile customers such as Facebook, ebay and google which demonstrated low risk to investors. This gave the capital investors the green light to be able to put the financial structures and contractual agreements in place and move funding toward the industry, providing finance to build the wind farms. In time governmental tendering encouraged companies to compete on pricing and it was this combined strategy which lead to the prices in electricity from wind reduce by 5 times over 10 years and deliver affordable renewable electricity for businesses and households.

Onshore wind: 10 years ago: €150-200/mwh; today: €35-60/mwh

Offshore wind: 10 years ago: €250-300/mwh; today: €50-85/mwh

SAF is currently 3 times the price of fossil fuels. A plant can take up to 2 years to build; financial structuring and partner development can also take just as long. This gives us a basis for estimations on the time it will take to rollout further plants in this early stage industry.

IATA created an infographic video showing what is needed from a volume and commitment perspective to create carbon neutral growth from 2020 in avaition.

It is going to involve time and a lot of complex work including policy changes, mandating, awareness building and business development to see this industry take off.

At FGA, we are working on this and are partnering with key stakeholders to deliver the energy transition in aviation.

If you would like to find out more about how you can play a role as an individual or business then contact sarah@flygreenalliance.org