Factbox: European airlines secure supplies of low-carbon jet fuel

Flughafen Wien AG

28/11/2023 24:01

Nov 28 (Reuters) - European airlines are ramping up
investments and signing agreements to secure supply of
sustainable aviation fuel (SAF) needed to meet targets set by
the European Union aimed at curbing the aviation sector's carbon
footprint.
    The adoption of alternative fuels made from bio-based
materials could cut carbon emissions by up to 80% compared to
conventional fuel, and is seen as a route to help the sector
reach its net zero emissions goal by 2050. 
    On Tuesday, Virgin Atlantic will aim to highlight the
importance of the alternative fuel's use with a 100% SAF-powered
flight from London to New York City. 
    SAF currently makes up less than 0.1% of aviation fuel used
globally and costs three times as much as regular jet fuel when
made from waste oils, but other versions made from green
hydrogen can cost more.
    Here are some deals signed by European airlines so far:

    AIR FRANCE-KLM  AIRF.PA  
    In November, the group invested $4.7 million in DG Fuels'
SAF production plant in the U.S. state of Louisiana, a step
towards its target to use SAF for 10% of its flights by 2030.
    It also said on Sept. 18 it had signed a memorandum of
understanding (MoU) with Austrian energy company OMV  OMVV.VI 
to buy more than 300,000 metric tons (100 million U.S. gallons)
of SAF by 2030.
    The deal was followed by an offtake agreement for OMV to
supply the airline with 2,000 metric tons of SAF in 2023.

    EASYJET  EZJ.L  
    In September 2022, the airline signed a five-year SAF supply
agreement with Q8Aviation, the jet fuel unit of Kuwait Petroleum
International.

    FINNAIR  FIA1S.HE  
    In June 2022, the Finnish carrier signed a five-year deal
worth $192 million with U.S.-based renewable fuel producer Gevo
 GEVO.O  to buy 21,000 metric tons of SAF per year from 2027.
    
    IAG  ICAG.L 
    The owner of British Airways and Iberia in August signed an
agreement to buy 14,700 metric tons of SAF in 2023 from U.S.
energy firm Phillips 66  PSX.N .
    Microsoft  MSFT.O  was also involved in the deal as part of
its efforts to cut carbon emissions of its business travel and
air freight.
    In November 2021, IAG and Southwest Airlines  LUV.N  jointly
agreed to buy nearly 920,000 metric tons of SAF created from
woody biomass in Mississippi. 
    Under the deal, IAG will buy 220,000 metric tons of SAF over
10 years starting 2026, while Southwest will buy 670,000 tons
over 15 years starting from the same year.
    
  
    ICELANDAIR  ICEAIR.IC 
    The Icelandic carrier in March said it had signed an MoU
with green hydrogen developer IdunnH2 for the use of up to
45,000 metric tons of SAF from 2028 onwards.

    JET2  JET2.L  
    Britain's Jet2 said in April it was making a "major
investment" in a SAF production plant in northern England, with
production expected to start in 2027.

    LUFTHANSA  LHAG.DE  
    Germany's flagship carrier in August signed a letter of
intent on the production and supply of SAF with specialty
chemicals firm HCS Group. Production in Germany is set to start
in 2026 with a volume of 60,000 metric tons per year.
    The carrier in 2022 strengthened its SAF partnership with
OMV, which also supplies the biofuel to Austrian airlines at
Vienna International Airport.

    NORWEGIAN AIR  NAS.OL  
    The Norwegian carrier in April partnered with a local
producer of electrofuels, Norsk e-Fuel, to build a SAF
production plant in the country. The plant is scheduled to be
operational in 2026 and it should secure about 20% of
Norwegian's total SAF needs by 2030.

    RYANAIR  RYA.I  
    The Irish airline in October purchased 500 metric tons of
SAF from OMV  OMVV.VI , as part of an MoU to buy up to 160,000
tons of SAF over eight years starting from 2023.
    Ryanair also signed a supply agreement with Shell  SHEL.L 
in December 2022, to buy 360,000 metric tons of SAF from 2025 to
2030, a fifth of what it needs to meet its target to power 12.5%
of flights with the fuel by 2030.
    It has struck similar deals with Spain's Repsol  REP.MC ,
set to supply up to 155,000 tons of SAF between 2025 and 2030,
and Finland's Neste  NESTE.HE , which powers all Ryanair's
flights at Amsterdam Airport Schiphol. 
    
    WIZZ AIR  WIZZ.L  
    The budget carrier said in April it would invest 5 million
pounds ($6.1 million) in biofuel company Firefly, expecting to
supply up to 525,000 metric tons of SAF to its British
operations from 2028.
    
    VIRGIN ATLANTIC
    The British airline partnered with Neste  NESTE.HE  in 2022
to acquire 2,000 metric tons of SAF. 
    In December last year, it agreed to buy 260,000 tons (85
million U.S. gallons) of SAF from Gevo by 2030, via a joint
venture with U.S. airline Delta. 

($1 = 0.8151 pounds)

 (Compiled by Anna Mackenzie, Stéphanie Hamel, Marta Frąckowiak,
and Andrey Sychev;
Editing by Milla Nissi and Tomasz Janowski)
 ((anna.mackenzie@thomsonreuters.com;))