Aer Lingus owner signs deal for sustainable fuel

almost 4 years in The Irish Times

Aer Lingus flights may be partly powered by sustainable aviation fuel (SAF) in the coming years as parent company IAG said it has proposed a deal to acquire 220,000 tonnes of the fuel over 10 years.
The agreement with Velocys equates to a third of the planned output of the company’s new Bayou Fuels project in the US when it begins delivery in 2026.
IAG said the fuel would be used by its airlines including British Airways, Aer Lingus and Iberia.
IAG will purchase a million tonnes of sustainable jet fuel per year, which will enable it to cut its annual emissions by two million tonnes by 2030, equal to removing one million cars from Europe’s roads each year.
“IAG is investing US$400 million in the development of sustainable aviation fuel in the next 20 years. This new agreement is another important step towards achieving our goal of 10 per cent sustainable aviation fuel use by 2030,” said Luis Gallego, IAG’s chief executive.
“Sustainable aviation fuel is a critical element for the decarbonisation of the aviation industry. Clear policy support is needed to attract investment to construct the necessary plants to deliver enough supply for the airline industry. This project has benefitted from strong policy support from the US, creating highly valued green jobs and economic growth. We would encourage the UK and the EU to follow suit in supporting the development and deployment of green technologies including carbon capture.”
Carbon neutral
IAG is among a number of who have rolled out a slew of sustainable fuel initiatives as COP26 takes place, aiming to prove they’re serious about the fight against global warming.
SAF, a substitute for the fossil-based kerosene powering today’s jet turbines, is derived from a variety of ingredients, from waste oils and fats to sugar crops and some trees and grasses. British Airways operated a “carbon neutral” flight to Glasgow, while EasyJet will use a SAF blend on 42 flights out of London Gatwick airport. United Airlines Holdings committed to buying 1.5 billion gallons of SAF made from forest and crop waste.
The sudden embrace of kerosene alternatives makes sense for an airline industry desperate to avoid another shock after the decimation caused by the Covid-19 pandemic. If scaled quickly, SAF could help airlines fend off calls for emissions-related restrictions on flying, and clear the way for a return to growth.
Some industry participants are concerned that the publicity is outpacing palpable progress.
“It feels a little frothy right now,” said Gene Gebolys, chief executive officer of World Energy, one of two companies supplying commercial quantities of SAF in the US. “It can’t be just a press release battle. There’s got to be authenticity here.”
A crucial selling point of SAF is that it offers a way to make immediate progress toward cutting CO2 emissions, given more impactful changes like hydrogen- and electric-powered planes are still on the drawing board. SAF is made without extracting more fossil fuel, and can be blended for use in existing aircraft.
Cost challenges
One of the main challenges is cost. SAF is typically three to four times more expensive than kerosene, so airlines aren’t buying it in bulk. As a result, very little is being produced. If Delta Air Lines filled all its planes for one day, the carrier would soak up a year’s worth of US SAF supply, said CEO Ed Bastian.
Energy producers “don’t know if they have a client, and the airlines can’t afford to pay that much higher level of cost,” Mr Bastian said in a Bloomberg TV interview. “That’s why we’re working with our people in Washington” on getting tax credits for SAF fuel blends.
SAF supplies are extremely limited, with current production estimated to be less than 0.1 per cent of global jet fuel consumption, according to BloombergNEF. That’s expected to increase to about 3 per cent of projected demand in 2030, far short of the targets set by the European Union and the UK.
Greater volumes will bring down prices, says Chris Raymond, Boeing’s chief sustainability officer. He says a combination of incentives and levies on traditional jet fuel could encourage higher SAF usage.
Another obstacle is that, like conventional kerosene, SAF spews carbon dioxide and other pollutants into the atmosphere. The reductions claimed by biofuels rely on a lot of complicated math and the idea that the materials being burned don’t come from extracting fossil fuels sequestered thousands of years.
Any SAF’s life-cycle greenhouse gas emissions depend on the feedstock and the process of converting it into jet fuel. But some forms risk generating more carbon dioxide than the conventional fuels they replace, according to an International Council on Clean Transportation working paper published in March. For example, fuel derived from municipal solid waste with high plastic content can produce as much as almost twice the amount of CO2 as burning regular jet fuel, the report said.
The money being spent for SAF would be better targeted toward technologies like hydrogen and electric propulsion that would greatly reduce emissions in the first place, said Jozsef Varadi, chief executive of low-budget carrier Wizz Air Holdings.
“I’m not saying that we are anti-SAF or anything like that,” Mr Varadi said. “But I think if you are looking for a long-term solution, you have to decarbonise the engine technology.”
Yet there are few current alternatives other than drastic cutbacks in flying. Even when they arrive, electric and hydrogen planes will operate only shorter flights at first. International Air Transport Association Director General Willie Walsh, who previously led British Airways parent IAG SA, expects airlines to continue buying conventional jetliners for another 15 years, and they typically last for two decades or more.
“We have to look at other options to get us to the net zero position by 2050,” Mr Walsh said in an interview. “In that time period, sustainable fuels is the most important thing that we can do.”
Ultimately, a combined approach is going to be required, said Diana Birkett Rakow, the vice president for public affairs and sustainability for Alaska Airlines. The US carrier says increasing the use of SAF, improvements in operations and air traffic management, as well as buying new, fuel-efficient planes will be a start. Beyond that, it will rely on propulsion advances and investments in startups, along with offsets to help solve the net-zero problem.
“I guess it’s fairly American to want a silver bullet, but this one’s going to be step-by-step,” Birkett Rakow said.– Additional reporting: Bloomberg

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