• On the current trajectory, sustainable fuels will only supply a small percentage of aviation and shipping needs.
• Favourable government policies are needed to increase production and adoption of sustainable fuels in both sectors.
• Stronger and more streamlined regulatory frameworks should also be put in place.
Six years after COP21 and with recent lockdowns across many parts of the world putting brakes on anthropogenic activities, efforts towards reducing greenhouse gas emissions to secure the future of the planet have moved beyond country-level actions based on their National Determined Contributions (NDCs) to two key sectors: aviation and shipping. These were excluded from the original ambit of the COP21 mandates because of their international nature.
In both sectors, the imperative is carbon fuel replacement, either by non-carbon or lower-carbon alternatives; if neither of those are attainable immediately at desired levels of performance, scale and cost, then at least by local-carbon alternatives that minimize the emissions of moving large volumes of fuels from the point of production to the point of use. Overlaying effective sustainability criteria on emerging and future fuels, and minimizing additional capital outlays by leveraging existing infrastructure, are equally important.
In 2019, the International Civil Aviation Organization reported that commercial production of sustainable aviation fuel (SAF) reached an average of 6.45 million litres per year (2016-2018), and estimated that up to 6.5 million metric tons (8 billion litres) per year of SAF production capacity may be available by 2032.
Comparing these numbers with the wider global aviation fuel market, estimated at 215 million tons in 2020 and projected to reach about 400 million tons by 2026, we see that even a decade from now the penetration of SAF will still be in single digit percentages if things continue at the current pace. There is thus an urgent need to accelerate SAF adoption, as well as production.
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Similarly, with the implementation of IMO 2020 standards for marine fuels – which pushed down the sulphur content of heavy fuel oil (bunker fuel) for ships to less than a seventh of the norm previously – there are positive steps towards climate mitigation in this sector. However, low-sulphur marine fuels are not necessarily low-carbon fuels; in fact, the deep desulphurization required in petroleum refineries to deliver IMO-compliant fuel marginally increases the life-cycle greenhouse gas (GHG) emissions of shipping in the short term.
The international and country-level responses to three key underlying issues will primarily determine the future pace of SAF and SMF (sustainable marine fuels) adoption:
The sheer economies of scale of existing petroleum refineries and crude oil global trade as compared to biorefineries and bio-feedstock global trade put emerging fuels at an disadvantage from both capital efficiency and input-cost standpoints. To level this playing field, non-crude renewable carbon feedstocks need policy support. That will enable robust, abundant supply chains and bring down the costs of SAF and SMF in the medium term.
2. Defining sustainable fuel
Unambiguous, widely accepted definitions of sustainability are equally important. One can argue that fossil-based aviation and marine fuels themselves have varying levels of real life-cycle greenhouse gas emissions, depending on which crude oils are used, exactly how these are processed and over how many miles the raw materials and products of these supply chains are moved, and by what means of transport. There is merit in exploring ways to reduce these elements of net emissions, too, as fossil fuels will remain the majority component of aviation and marine fuels for the foreseeable future.
Agile national yet globally collaborative regulatory frameworks are the final, critical component. Convergence towards a common understanding of sustainability parameters and the cost of carbon emissions is long overdue.
An excellent recent development in this direction is CORSIA Eligible Fuels (CEF)’s categorization, which lays out clearly the boundary conditions for alternate aviation fuels that can participate in the aviation carbon marketplace. Waste-based feedstocks – such as waste plastics or industrially emitted gases like carbon monoxide – that might not be renewable but can be recycled to reduce the need for greater fossil fuel extraction and processing must be brought into the pool of acceptable alternate fuels.
The holy grail would be if the two most abundant greenhouse gases, carbon dioxide and methane, can be harnessed without spending more carbon-based energy in processing them on a life-cycle basis than the total amount of GHG utilized. Non-carbon sustainable-energy solutions like hydrogen and solar must also continue to have investment potential for these sectors.
One particularly long lead time component in bring sustainable transportable fuels to market is the certification and qualification process, which necessarily involves original equipment manufacturers, engine manufacturers, fuel producers, standardization bodies and regulatory agencies within the framework of policy enablement in all countries that may produce, store or use the fuel.
By way of illustration, eight different pathways of alternate aviation fuels (not necessary all equally sustainable) have taken a decade to be approved for aircraft use in the widely adopted ASTM D7566 standard. Fuel from these pathways may be blended for commercial use with fossil jet fuel at levels ranging from 10-50%, depending on the pathway chosen. This itself adds a supply chain complexity of testing the individual components, blending them when found compliant with specifications, and then testing the blend again before an aircraft can take the hybrid fuel into its engines.
However, additional impetus and incentives should be accorded to SAF pathways that can be used directly, without the need for blending with fossil fuels. Also, with large volumes of data now available over the past 10 years on fuel composition from these multiple production routes versus performance and safety data generated in real time, there is a strong case for data analytics and artificial intelligence (AI) deployment to cut short the time to approvals without compromising operability or safety.
What is the World Economic Forum doing to reduce aviation's carbon footprint?
As other sectors proceed to decarbonize, the aviation sector could account for a much higher share of global greenhouse gas emissions by mid-century than its 2%-3% share today.
Sustainable aviation fuels (SAF) can reduce the life-cycle carbon footprint of aviation fuel by up to 80%, but they currently make up less than 0.1% of total aviation fuel consumption. Enabling a shift from fossil fuels to SAFs will require a significant increase in production, which is a costly investment.
The Forum’s Clean Skies for Tomorrow (CST) Coalition is a global initiative driving the transition to sustainable aviation fuels as part of the aviation industry’s ambitious efforts to achieve carbon-neutral flying.
The coalition brings together government leaders, climate experts and CEOs from aviation, energy, finance and other sectors who agree on the urgent need to help the aviation industry reach net-zero carbon emissions by 2050.
The coalition aims to advance the commercial scale of viable production of sustainable low-carbon aviation fuels (bio and synthetic) for broad adoption in the industry by 2030. Initiatives include a mechanism for aggregating demand for carbon-neutral flying, a co-investment vehicle and geographically specific value-chain industry blueprints.
With evolving data-analytical capabilities, real-time, transparent assessment of technology and supply-chain alternatives with regard to sustainability criteria should become standard practice not only for individual fuel producers and users from an ESG investor standpoint, but they should also enable policy-level prioritization of the best options in each global region.