Every drop of SAF (Sustainable Aviation Fuel) produced has been purchased and used this year, in which its production has reached an all-time high. This is confirmed by a report on sustainable fuel for airplanes, published by the International Air Transport Association (IATA).
The SAF is, for the moment, the only way that the airline sector can follow to meet the decarbonization objectives that have been set for this sector for the year 2050. But while airlines and aircraft manufacturers are putting all their efforts In reaching the goal, the production of this sustainable fuel is not going at the pace that airlines need, as their international employers' association has warned, and this despite the fact that 2023 was a record year in SAF production and demand.
Production reached more than 600 million liters, double the 300 million liters produced in 2022. The forecast is that by 2024 it will triple to reach 1,875 million liters. If the forecasts are met, the SAF would only provide 0.53% of aviation fuel needs and 6% of renewable fuel capacity. At least 43 airlines have already committed to using some 16.25 billion liters (13Mt) of SAF by 2030, with more deals being announced regularly.
“But even with that impressive growth, SAF as a share of all renewable fuel production will only grow from 3% this year to 6% in 2024. This allocation limits the supply of SAF and keeps prices for this fuel high. Aviation needs 25% to 30% of renewable fuel production capacity dedicated to SAF to achieve net zero carbon emissions by 2050. Until those levels are achieved, we will continue to miss enormous opportunities to advance the decarbonization of the sector,” warns the IATA report.
According to its CEO, Willie Walsh, it will be government policy that will make the difference. “Governments want aviation to be net zero emissions by 2050. Having set a target, they now need to take policy measures to achieve the necessary exponential increase in SAF production,” claims Walsh.
Estimates suggest that more than 78 billion liters of renewable fuels will be produced by 2029, but their allocation to SAF is minimal, given producers' doubts that aviation will offer sustained long-term demand. From IATA they assure that the sector will need 17,500 million liters of SAF to meet the objectives
Still, “Only 3% of global oil and gas budgets are invested in SAF production, when profit margins are much higher in this sector than in the aviation sector, which will reach a margin of benefit of 2.7% in 2024,” IATA chief economist Marie Owens Thomsen said at a press event Wednesday in Geneva.
In 2023, airlines spent an extra $756 million on their fuel bill due to their commitment to the SAF and according to Thomsen they are in a position to invest up to $2.4 billion in 2024. “But not all of the investment should be made by the airline sector,” he warned. Owens. For this reason, IATA requests the direct involvement of governments to provide incentives through direct aid and regulations for energy companies so that production can satisfy demand around the world.
