SAF Market

According to information collated with the support of ReFuelEU Aviation Member State Network 

If facilities that are currently under construction are taken into account, the amount of SAF production capacity in 2030 could reach 3.5 Mt. This could be considered a ‘realistic scenario’. Again, almost all this production would be dominated by the HEFA production pathway and does not include any Power-to-Liquid (PtL) production, as no plant has yet evolved beyond a pilot stage. Other studies come to different conclusions, mostly due to a different set of assumptions and methodologies. The recent SkyNRG Market Outlook from June 2024 

In addition to the operating and realistic scenarios, both the ReFuelEU Aviation Member State Network and the SkyNRG Market Outlook collected information to build up an ‘optimistic scenario’. This includes all projects in the pipeline to be in operation by 2030 and includes PtL projects, leading to a projected SAF capacity of 5.6 Mt and 5.5 Mt respectively.

Beyond 2030, projections of production capacity are more challenging and the potential SAF production will depend on the availability of feedstocks (eg. HEFA, green hydrogen, renewable energy). The aviation industry will be competing with other sectors as part of the economy wide decarbonization efforts where these feedstocks could be used to directly decarbonize the primary energy supply. As a result, securing these sources of renewable energy will be critical to ensure the ramp-up of PtL SAF production within Europe. There are positive signals in particular from the solar industry, where the growth of global installation capacity is accelerating faster than anticipated and becoming the largest source of new electricity, with solar capacity doubling every three years and hence growing ten-fold every decade

Another limiting factor for SAF deployment towards 2050 is the capital expenditure required to build the production facilities. It is estimated that between 500- 800 SAF facilities¹⁰ will be needed globally by 2050, which, assuming €1.8 billion per facility, would result in around €36 billion capital expenditure annually between 2025 and 2050 

Estimations of the future SAF landscape have concluded that indeed PtL fuels have the potential to cover 50% of the global SAF production capacity by 2050. Whereas HEFA production will be around 7% and AtJ / FT the remaining 43%. Projections by region also highlight the varying availabilities for feedstocks in the different parts of the world

To estimate the potential CO₂ emission savings from the ReFuelEU Aviation regulation, a comparison has been made between the carbon intensity reduction of global aviation fuel taking into account the SAF supplied and the EU RED fossil fuel baseline intensity of 94 gCO₂e/MJ (

Two scenarios were assessed, a ‘minimum’ emissions saving and a more ‘ambitious’ scenario. The scenarios differ in the assumed emission reductions achieved by the (advanced) biofuels mandate and the RFNBO (PtL) fuel sub-mandate. The minimum scenario assumes a 65% and 70% emission reduction for biofuels and RFNBOs over their lifecycle respectively, which aligns with the minimum requirements set out in the ReFuelEU Aviation regulation 

The price of SAF is one of the most critical factors when it comes to its uptake, as fuel costs currently represent a large share of the operational cost of aircraft operators (approx. 30%) [58]. In 2023, the price of conventional jet fuel averaged around €816 per tonne and is a figure that is readily available from Price Reporting Agencies (PRA) indexes 

For fuels that had no market availability in 2023, production cost estimations were developed based on feedstock, energy and technology deployment costs resulting in prices that range from €1 600 per tonne for advanced aviation biofuels to €8 700 per tonne for PtL fuels. Figure 6.9 illustrates the estimated price ranges for the different eligible fuels under ReFuelEU Aviation in 2023. These production costs are expected to reduce substantially as emerging SAF and hydrogen production technologies scale up, and associated costs reduce.

Especially for PtL fuels, for which the energy price is a key cost driver, the differences in energy prices across Europe may play a role in where the production is most attractive and competitive for such fuels in the future 

STAKEHOLDER ACTIONS

The Central Europe Pipeline System (CEPS)

Neste cooperated with Brussels Airlines to deliver sustainable aviation fuel to the airline at Brussels Airport on January 1, 2023. This marked the first time that SAF was supplied to an airline at an European airport using the NATO CEPS. It showcases how existing fuel infrastructure can be used to supply SAF to airports.

A CORSIA certified batch of SAF was first supplied to a commercial airline in July 2022 when Neste delivered a batch of its Neste MY Sustainable Aviation Fuel™ to American Airlines at San Francisco International Airport. This was part of a pilot project to certify SAF as a CORSIA eligible fuel that can be used by an airline to meet its emissions obligation under CORSIA. The Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”) is a carbon offset and reduction scheme to lower CO₂ emissions for international flights and curb the aviation impact on climate change.

Regional aircraft manufacturer ATR, Swedish airline Braathens Regional Airlines and Neste collaborated to enable the first ever 100% SAF- powered test flight on a commercial regional aircraft. The flight took place in Sweden in July 2022 and is part of the 100% sustainable aviation fuel (SAF) certification process of ATR aircraft that started in September 2021. The test flight further supports aviation’s decarbonisation targets and acceleration of SAF certification.

Project Runway is an iniative launched by SkyNRG in June 2024 and brings together airlines and corporates to provide easy access to SAF. The project will support airlines in navigating the complexities of SAF procurement and provide an effective way to reduce their greenhouse gas emissions. Project Runway allows airlines access to SAF and allows them to share the SAF price premium with ambitious corporates aiming to reduce their own Scope 3 aviation emissions.

The modular chemical plants for power-to-X and gas-to-liquid applications developed by Ineratec use hydrogen from renewable electricity and greenhouse gases such as CO₂ to produce, among other products, Power-To-Liquid fuels. The modular approach is being used for the first time in a pioneer plant for a large-scale industrial PtL project in Germany. The modular concept of the plants allows scalability over several stages, keeping the planning and construction efforts manageable and improving the cost-benefit ratio

In 2023, Virgin Atlantic Flight 100 flew on 100% SAF from London to New York, marking the culmination of a year of collaboration to demonstrate the capability of SAF as a safe drop- in replacement for fossil derived jet fuel that is compatible with today’s engines, airframes, and fuel infrastructure. Flown on a Boeing 787, using Rolls-Royce Trent 1000 engines, the flight marked a world first on 100% Drop-In SAF by a commercial airline across the Atlantic. The SAF used was 88% HEFA (Hydroprocessed Esters and Fatty Acids) made from waste fats and 12% SAK (Synthetic Aromatic Kerosene) made from plant sugars. It is estimated that the use of SAF reduced nvPM emissions by 40% and CO₂ emissions by 64%, as well as an overall improvement in fuel burn efficiency as the SAF produced 1% more energy compared to the same mass of fossil fuel.

¹⁰ Estimations of the future SAF landscape have concluded that indeed PtL fuels have the potential to cover 50% of the global SAF production capacity by 2050. Whereas HEFA production will be around 7% and AtJ / FT the remaining 43%. Projections by region also highlight the varying availabilities for feedstocks in the different parts of the world