EU infrastructure fund eyes African clean jet fuel projects

Sasol

28/08/2023 09:36

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      EU to weigh co-financing, guarantees of proposed plants
    

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      Africa has 'great potential' to produce SAF - EU official
    

  
    By Wendell Roelf
       CAPE TOWN, Aug 28 (Reuters) - The European Union is
scouting Africa to back clean jet fuel projects under its Global
Gateway infrastructure fund, an EU official said, ahead of an
anticipated boom in demand for environmentally sustainable air
travel. 
    The EU has pledged to dedicate half of its 300 billion euro 
($324 billion) infrastructure plan, seen as a rival to China's
Belt and Road Initiative, to Africa.
    The fund has already backed renewable plants, green hydrogen
initiatives, vaccines and education projects in Africa, and the
official said it was now looking into sustainable aviation fuel
(SAF).
    "In the context of the Global Gateway, the Commission is
currently looking into possible co-financing mechanisms and
guarantee instruments," said Stefan De Keersmaecker, a European
Commission spokesperson.
    "SAF production in the African continent has great
potential." 
    SAFs are low-carbon fuel alternatives for the aviation
industry and can be made from various crops among other
feedstock sources.
    The EU will launch a 4 million euro capacity-building
project by Dec. 31 to support SAF feasibility studies and
certification in 11 African countries and India.
    Following feasibility studies, selected projects could draw
funds from the Global Gateway, De Keersmaecker said.
    SAF SCRAMBLE
    The aviation industry contributes more than 2% of global
energy-related emissions, and the EU is mandating emissions
reduction targets that will require airlines to use more SAF.
    That will help create annual global demand of 450 billion
litres of SAF by 2050, according to the International Air
Transport Association, and has made Africa's vast swathes of
under-utilised agricultural land increasingly attractive. 
    There is currently no SAF production on the continent. And
establishing feedstock supply chains will be a challenge in
Africa where poor infrastructure, limited refining capacity and
inadequate regulations could delay projects and drive up costs,
analysts said.
    "The greatest way to reduce the cost of SAF in the African
continent and to have SAF that is produced sustainably is
through local manufacturing," Allan Kilavuka, chief executive at
Kenya Airways  KQNA.NR , said.
    Companies including Italy's Eni  ENI.MI , South Africa's
Sasol  SOLJ.J , Linde  LIN.DE  of Germany and Danish firm Topsoe
are nonetheless forging ahead with African SAF and biofuel
investments.
    Frankline Omondi, environmental manager at the African Civil
Aviation Commission, said the body wants SAF production to
launch in at least two African countries within a few years,
with potential for a third.
    South Africa, Kenya and Ethiopia are likely candidates, he
said.
    ($1 = 0.9249 euros)

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 (Reporting by Wendell Roelf; 
Additional reporting by Duncan Miriri in Nairobi
Editing by Promit Mukherjee, Joe Bavier and Mark Potter)
 ((wendell.roelf@thomsonreuters.com; +27 21 461 3523;))