European airline group IAG, one of continents most prominent multinational airline holding companies of which Qatar Airways owns a 25% stake, has this week signed a new commitment to ensure more sustainable operations over the coming decade. The airline group, combining airlines British Airways, Iberia, Aer Lingus, Vueling & Level, has signed an MoU agreement with Velocys, the sustainable fuels technology company, to acquire 220,000 tonnes of sustainable aviation fuel (SAF) over ten years. This equates to one third of the planned output of the company´s new Bayou Fuels project in the US when it begins delivery in 2026.
The technology used in this project will capture CO2 from the manufacturing process to permanently remove it from the atmosphere. IAG was the first European airline group to commit to powering 10% of its flights with sustainable aviation fuel by 2030.
The group will purchase 1mn tonnes of sustainable jet fuel per year enabling it to cut its annual emissions by 2mn tonnes by 2030. This equates to removing 1mn cars from Europe’s roads each year. Luis Gallego, IAG´s chief executive, said: “IAG is investing $400mn 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% sustainable aviation fuel use by 2030.
“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 benefited 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.”
Henrik Wareborn, Velocys’ chief executive, said: “This is another step in our long-standing partnership with IAG. Velocys offers an end-to-end technology solution to its clients enabling the production of SAF from waste feedstocks and the integration of carbon capture technology. It´s great to continue working with IAG on its journey to net zero by 2050.”
The use of sustainable aviation fuel will help meet the regulatory standards on emission and reduce carbon emission due to the rising air traffic. The effective application of low carbon technologies, such as electric and hydrogen propulsion are unlikely to be in widespread use until 2040 or later, meaning Sustainable Aviation Fuel (SAF) provides one of the only viable ways to reduce aviation emissions significantly in the short to medium-term.
Based on the type of feedstock used, sustainable aviation fuel gives a remarkable reduction in carbon emission compared to conventional jet fuel. Thus, to achieve the target of greenhouse gas emissions reduction, the demand for sustainable aviation fuel is growing significantly.
Sustainable aviation fuel (SAF) is the main term used by the aviation industry to describe “non-conventional” aviation fuels that are produced from sustainable feedstocks.
There are currently five internationally approved processes through which SAFs can be produced. Each of these pathways has its benefits, such as the availability of feedstock, cost of the feedstock, carbon reduction or cost of processing. Some may be more suitable than others in certain areas of the world. But all of them have the potential to help the aviation sector reduce its carbon footprint significantly, assuming all sustainability criteria are met.
Another type of SAF, for example, uses waste, fat and oils. It is the most commercially available type of SAF today – used in about 95% of the 300,000 SAF powered flights that have flown since 2016.
It is a “drop in” solution – currently blended with conventional fuels at various percentages, can use the same supply infrastructure, and does not require engine or aircraft modifications to work. First used by the industry in 2008, SAF has powered over 250,000 flights around the world. However, volumes currently remain low, with SAF accounting for less than 0.1% of the aviation fuel market. If used neat, SAF has the potential to reduce life-cycle emissions by up to 80%. It works just like conventional jet fuel, in that it combusts inside an engine, hence producing emissions. It is 'sustainable' because it emits less CO2 over its lifecycle.
British Prime Minister Boris Johnson said that current global targets around sustainable aviation fuel were "pathetic" and that the world could do more as he announced plans to drive the adoption of green technology globally. While admitting the challenge was a "tough nut to crack", he said "guilt free aviation" was possible, citing a joint deal with billionaire philanthropist Bill Gates to spend £400mn ($545.04mn) on the problems of low-carbon aviation.
Currently, SAFs are more expensive than traditional jet fuel. Estimates range from 2x for some waste-based sources to 6-10x for synthetic fuels using carbon capture. This is mainly due to the small production runs. However, further production facilities are being constructed or planned, and multiple airlines are signing significant forward purchase agreements which help provide offtake certainty to new energy suppliers, allowing them to finance new plants. This will help bring down the cost of SAFs in the mid- to long-term.
Several airlines are driving forward the use of SAFs by signing multi-million dollar forward purchasing agreements. Others have invested in start-up support for SAF deployment, and some have promoted SAFs through test flights, research, and investigation of local opportunities. Five airports also have a regular SAF supply: San Francisco, Los Angeles, Oslo, Bergen, and Stockholm.
Decarbonisation continues to be one of the biggest challenges faced by aviation, and the pathway to net-zero emissions will take innovation, collaboration, and legislation.

* The author is an aviation analyst. Twitter handle: @AlexInAir
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