Corporate travel propels boom in sustainable aviation fuel

SAF Tehnika AS

08/12/2022 07:00

(Repeats story published earlier. No change to text.)

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      'Book and claim' system borrowed from electricity sector
    

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      SAF uses feedstocks like cooking oils to cut emissions
    

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      Boom in SAF needed to meet industry's emissions targets
    

  
    By Jamie Freed
       SYDNEY, Dec 8 (Reuters) - A growing number of companies
are making bulk purchases of sustainable aviation fuel (SAF) to
reduce their carbon footprints, encouraging mass production of
the cleaner energy that airlines need to meet their emissions
targets.
    Airlines, travel agents and fuel producers are now offering
corporate customers the opportunity to buy SAF not linked to
individual flights, as companies go beyond cheaper carbon offset
options like planting trees to reduce the environmental burden
of flying. 
    The industry move toward a "book and claim" accounting
system like that used in the renewable electricity sector allows
for greater flexibility given the relative scarcity of SAF,
which uses feedstocks like cooking oils to reduce emissions by
up to 80% from conventional fuel but is available only at
limited airports globally.
    In a recent deal announced by Qantas Airways  QAN.AX , five
companies will pay a premium to reduce their emissions by
contributing to the cost of the airline using SAF supplied by BP
 BP.L  at London's Heathrow Airport.
    The companies involved can claim an emissions reduction to
be used for a variety of potential purposes that is not linked
to their business travel from London to Australia. 
    Participant Boston Consulting Group (BCG), which is also
buying SAF through United Airlines  UAL.O  and fuel suppliers
SkyNRG and Neste  NESTE.HE , said it was looking to help scale
the SAF market to meet internal targets.
    "Our largest source of emissions come from business travel,
and there we have committed to cut our emissions intensity in
half by 2025, compared to 2018," BCG Chief Sustainability
Officer David Webb said.
    Australia Post, another Qantas partner, said it would use
the credits to reduce its emissions from air freight at a time
when SAF is not available in Australia.
    Qantas said the more companies that join the programme, the
more feasible and cost effective a local SAF industry would
become. 
    A growing number of carriers, including United, Lufthansa
 LHAG.DE , Cathay Pacific Airways  0293.HK , Air France KLM
 AIRF.PA  and Japan's ANA Holdings  9202.T , have similar
programmes.
    SAF accounted for only 0.5% of aviation fuel in 2021, but
many airlines have a target of 10% by 2030 and the industry's
goal of "net zero" emissions by 2050 relies on SAF accounting
for 65% of fuel.
    The corporate sector interest could build momentum for the
SAF industry to scale up given businesses account for around 20%
of air travel globally and 30% in Europe, said Denise Auclair,
corporate travel campaign manager at European non-governmental
organisation Transport & Environment.
    Only a limited number of airlines like Finnair  FIA1S.HE 
and Scandinavia's SAS  SAS.ST  allow individual customers such
as leisure travellers to pay for SAF to reduce flight emissions.
    'GREEN PREMIUM'
    Buying SAF is more costly than purchasing emissions offsets
but experts say it can play a key role in reducing travel
emissions alongside switches to video-conferencing and cleaner
alternatives like rail.
    Companies are paying a "green premium" when they purchase
SAF given it costs around three to five times more than
conventional jet fuel, said Sami Jauhiainen, vice president APAC
at Neste's renewable aviation business, the world's largest,
which offers a corporate buying programme.
    "They contract with us, they pay for the cost premium of
sustainable aviation fuel over the conventional jet fuel, and
then enable us to deliver sustainable aviation fuel for our
partner airlines to consume," he said. "And then we can support
the end customer with relevant reporting and documentation that
they need to recognise the benefits."
    Companies are able to contract directly with airlines,
travel agencies like American Express Global Business Travel
(Amex GBT)  GBTG.N  and fuel providers like Neste as they look
to claim SAF credits and avoid pitfalls like double claiming.
    Double claiming issues will become increasingly acute as
more countries mandate a certain percentage of SAF blended in
all aviation fuel, according to a World Economic Forum (WEF)
white paper on SAF accounting and reporting guidelines released
in October. France already has a 1% requirement, while the
European Union will mandate 2% from 2025.
    Amex GBT worked with Shell  SHEL.L  and Accenture  ACN.F  to
create a block chain-based platform to ensure that certificates
purchased by corporate customers are non-fungible in the biggest
pilot of book and claim to date.
    "This platform allows you to buy SAF and use any airline
you'd like," Amex GBT Chief Commercial Officer Drew Crawley
said. 
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carbon targets     urn:newsml:reuters.com:*:nL8N32W5Q9
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 (Reporting by Jamie Freed; Editing by Stephen Coates)
 ((Jamie.Freed@thomsonreuters.com;))