POWER STRUGGLES

What is alternative aviation fuel (aka SAF)?

According to a statement provided by the Lufthansa Group, “SAF is a decisive technological key to more sustainable flying and is essential to the energy transition in aviation.”

There are two types of alternative aviation fuel: biofuel (which itself divides into two distinct categories), and e-fuel, also known as synthetic fuel. The first generation of biofuel was food crops that would otherwise be consumed by humans or animals. The second generation is made from waste products, most commonly used cooking oils, but potentially also municipal solid waste.

“SAF currently available and used by the Lufthansa Group is produced from biogenic residues such as used cooking oils,” its statement continues. “CO2 is bound in the biogenic residues, which plants have previously removed from the atmosphere. When SAF is burned in the engine, only as much CO2 is emitted as was previously removed from the atmosphere by the source materials.”

There are also a variety of e-fuels, largely at an experimental stage. One production method is to isolate hydrogen from water and mix it with carbon captured from the atmosphere.

The challenges

“Over its entire life cycle, SAF made from biogenic residues has a reduced CO2 footprint of around 80 per cent compared to conventional kerosene made from fossil crude oil,” says the Lufthansa Group.

“But if you don’t burn it, you don’t use any CO2 at all,” says Julien Etchanchu, senior director for sustainability with BCD Travel's consulting wing Advito. Nevertheless, Etchanchu accepts that bio-waste fuels can reduce lifecycle emissions by as much as 70 per cent.

The problem is that non-waste sources produce far lower savings, while “some types of alternative fuel actually increase sustainability challenges,” says Ami Taylor, associate consultant for Festive Road.

Crops grown specifically to use in fuel are increasingly discredited, with the EU excluding them from its SAF mandates. “They compete directly with food needs and lead to deforestation and land use changes,” says Camille Mutrelle, aviation policy officer for clean transport and energy advocate Transport & Environment. One example cited by Etchanchu is palm oil, “which is the main contributor to deforestation in Indonesia and worse than burning kerosene.”

“If you can replace a tiny portion of kerosene with SAF, okay, why not, but let’s stop thinking it’s a scaleable solution. It’s not the case”

Even if the argument is accepted that the lifecycle of alternative aviation fuel is beneficial, there is yet another overwhelming problem: volume, or rather the lack of it.

The International Air Transport Association, in a fact sheet from 2023, states: “We estimate that SAF could contribute around 65 per cent of the reduction in emissions needed by aviation to reach net zero CO2 emissions by 2050.” It is a statement where the word “could” does some very heavy lifting.

“The problem with SAF is scaleability,” says Etchanchu. “You will never have enough with cooking oil or even animal fat. If you can replace a tiny portion of kerosene with SAF, okay, why not, but let’s stop thinking it’s a scaleable solution. It’s not the case. IATA said in 2007 that SAF would represent ten per cent of needs within ten years. Seventeen years later we are at 0.2 per cent [IATA’s own figure].”

Taylor is in agreement. “There’s just not enough to deliver the reductions we need, and that’s why alternative fuels shouldn’t be top of anyone’s list [for reducing emissions],” she says.

Worse still, the mismatch between alternative aviation fuel supply and demand risks making matters worse, not better. According to Mutrelle, 80 per cent of biofuels used in the EU purportedly from waste oils are imported from Asia. Even putting the shipping miles to one side, “the more imports you rely on, the more you expose yourself to fraud because the safeguards are not in the supply chain,” she says. Both Mutrelle and Taylor cite allegations of palm and other virgin oils being passed off as used oil.

There is little optimism that volumes can be increased sufficiently in future. E-fuels have the theoretical potential to be produced in much greater quantities, and the EU has set targets for them to account for 1.2 per cent of aviation fuel by 2030, ten per cent by 2040 and 35 per cent by 2050.

Here, the challenge is sourcing enough renewable electricity to power the fuel production process. “Many industries need renewable electricity to decarbonise, so the question is how much can you generate to produce e-fuels, especially for a sector like aviation, which you might argue is not a priority compared with, say, heating?” asks Mutrelle.

Lufthansa has said that to power its fleet with e-fuels would consume half the electricity produced by Germany today, renewable or otherwise. Accordingly, Mutrelle says, “the EU mandates are way too optimistic about the scaleability potential.”

Should corporate customers invest in alternative aviation fuel?

Rising fares mean business flyers will be financing alternative aviation fuel indirectly. But is it worth investing directly through various schemes offered to corporate customers by alternative aviation fuel producers and suppliers, as well as airlines and intermediaries such as travel management companies?

The first step to emissions reduction always has to be demand management, according to Taylor. “Alternative aviation fuel can be part of the solution, but it shouldn’t be the whole portfolio – and again you need to be careful about which kind of fuel you purchase,” she says.

Industrial software company Aveva is a case in point. “We are part of the World Economic Forum First Movers Coalition, so we have a commitment to replace five per cent of our jet fuel with alternative fuels by 2030,” says Nadia Crowe, the company’s environmental sustainability senior analyst. “I think they are necessary in the transition but they are not the silver bullet.

“They are definitely not top of our emissions reduction list, largely because the fuel that we’re looking at is so limited and very expensive. A lot of alternatives – fly less, modal shift – are the biggest priority.”

“We don’t want our travellers to get into a mindset where they feel they can travel because the sustainability team are buying SAF”

Another more effective way to reduce emissions, adds Etchanchu, is to book flights on newer aircraft – yet he does not rule out investing in alternative aviation fuel. “If you have the budget, it can help reduce emissions short-term, so why not?” he says. “It’s legally allowed to reduce your emissions from a reporting perspective thanks to SAF, which is a big difference to offsets.”

His remark raises the important point that companies should clarify their motivation before investing. Some corporate buyers, says Taylor, buy alternative aviation fuel to book emissions reductions in their sustainability reporting; others to encourage the aviation sector to decarbonise.

Motivation will also determine the channel through which companies choose to invest. For example, “if it’s principally to stimulate supply, there’s no harm in purchasing directly from the producer, but in doing that you are minimising your ability to influence airlines’ adoption of the fuel,” says Taylor. Alternatively, she adds, purchasing through a TMC-organised scheme “can make it easier for buyers, particularly if they lack resources internally to go through a formal acquisition process.”

But maybe the most important step travel managers can take regarding alternative aviation fuel is to keep its limitations in perspective. “At the moment we don’t educate our people on SAF because we aren’t making sufficiently significant purchases to come into our emission reductions portfolio,” says Crowe. “But we also don’t want to get them into that mindset where they feel they can travel because the sustainability team are buying SAF.”