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Emirates President Says Airlines Must ‘Do Better’ to Develop Sustainable Fuels, Meet Climate Goals

Edward Russell

June 7th, 2023

An Emirates flight powered entirely by sustainable fuels

Emirates President Tim Clark called for the airline industry to “do better” and put more money towards the development of sustainable aviation fuels as part of the global push to decarbonize commercial aviation.

“If we rely on government, if we rely on other entities to do things, we may be waiting a long time,” Clark said at the IATA Annual General Meeting in Istanbul Tuesday. “We can’t wait that long. We’ve got to do better than that.”

Sustainable aviation fuel, or SAF, represents the biggest lever toward meeting the airline industry’s goal of net-zero carbon emissions by the middle of the century. The fuels, which must generate at least half as many lifecycle emissions as their fossil fuel counterparts, are often made from things like trash or biomass. They are to drive 65 percent of the reductions with the balance coming from new technology — like electric or hydrogen aircraft — carbon capture, and efficiency improvements. The problem is SAF production stood at just roughly 79 million gallons last year, or “virtually nothing” in the words of IATA Chief Economist Marie Owens Thomsen.

“There is not enough supply of SAF in the world today,” ANA President and CEO Shinichi Inoue said in Istanbul.

The lack of supply, and seemingly insatiable demand from airlines, drives the 4-5 times price premium that carriers pay for SAF over standard jet fuel.

How the industry increases the supply of SAF is the point of debate. Clark, keeping with his view that the industry needs to do more, wants to see airlines invest at least $1 billion in the development of the industry. Emirates has pledged up to $200 million for SAF development, an amount that even Clark called just a “token” investment. In Australia, Qantas has established an A$400 million ($267 million) climate fund to support the development of emission reduction technologies; at least A$290 million from Airbus and Qantas is dedicated to developing Australian-made SAF. And in the U.S., United Airlines in February launched a $100 million fund for SAF research, technology, and production, and both JetBlue Airways and United have invested in sustainable fuel startups like Air Company.

But these investments are limited and fall well short of Clark’s $1 billion target — not to mention the tens-of-billions of dollars that are needed to scale SAF production globally. To that end, many European airlines are calling on their European Union and national governments to do more to support the development of sustainable fuels. Financial support would complement the EU’s plan to mandate SAF usage in the bloc, which is set to begin at 2 percent of all aviation fuel in 2025 before rising to 6 percent by the end of the decade and 85 percent by 2050.

“In Europe, it’s basically only sticks — adding taxes, adding costs,” Finnair Chief Commercial Officer Ole Orvér said on the EU’s mandate plan in Istanbul. The government of Finland is similarly not providing any financial incentives for SAF development and production, though one of the largest sustainable fuels producers in Europe, Neste, is based there.

The U.S. is notable for taking a different track to scaling sustainable fuel production. A number of tax breaks and incentives for SAF were included in the Inflation Reduction Act that President Biden signed into law last year.

“The EU should do what the United States is doing already [and] incentivize SAF,” KLM CEO Marjan Rintel said at the IATA event. The Dutch carrier has signed contracts for SAF covering roughly 4.5 percent of its fuel needs by 2030, or nearly halfway to its self-imposed 10 percent goal. But to close the rest of the gap more supply is needed.

But while European airlines call on the EU for SAF incentives, many in the U.S. see mandates as playing an important role as well. JetBlue Director of Sustainability Sara Bogdan said last September that adding mandates would make a market for producers and add yet another incentive for them to invest in and ramp up production of sustainable fuels.

Supply of SAF is not the sector’s only issue. The fuels themselves also need to be developed from feedstocks that do not compete with food supplies, or create other environmental issues like deforestation. Many believe that synthetic fuels, for example, those created out of so-called “green” hydrogen, are the only way forward given the limitations of natural biomass that can be used. And then there is the question of who invests in and builds sustainable fuel production facilities in developing markets like Africa.

All of these issues, and likely others, must be solved and sorted before SAF production can scale to the production levels needed to meet more than half of global aviation needs in just 27 years.

Edward Russell

June 7th, 2023

Tags: Asia-Pacific, Europe, Middle East, North America

Photo credit: Emirates flew a flight powered entirely by sustainable aviation fuels in January. Emirates

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