The aviation industry is a hard-to-abate sector, contributing between 2.5 per cent and 3 per cent of global carbon dioxide (CO2) emissions. Decarbonisation can be achieved by adopting three environmentally friendly fuels: Sustainable aviation fuel (SAF), hydrogen and electric power. Among these, SAF is the most promising due to several advantages. It is compatible with existing engines without modifications, can power long-distance flights unlike electric options and offers reduced greenhouse gas emissions over its life cycle.
The aviation industry consumed approximately 0.5 million tonnes of SAF in 2023, at a cost of $2,500 per tonne, which is double the amount produced in 2022 (0.25 million tonnes), according to IATA Annual Review 2024. These are promising numbers, but a lot more needs to be achieved. This consumption represents 0.2 per cent of the global jet fuel use. The price per unit of SAF is 2.8 times higher than that of conventional aviation fuel, resulting in an additional $756 million in fuel expenses for the industry in 2023.
SAF is typically estimated to be about 3-5 times more expensive than traditional jet fuel, primarily due to limited production facilities and guaranteed demand driven by mandated policy targets. Costs are expected to decrease over the coming decades as technologies advance and the industry achieves economies of scale. Additionally, long-term costs will be partially offset by more fuel-efficient aircraft designs and revenue from carbon reduction savings.
Approximately 80 per cent of the SAF projected to be produced in the next five years is expected to be derived from hydrogenated fatty acids (HEFA), which use feedstocks like cooking oils and animal fats, both of which have limited supply. Moreover, most of this feedstock is being used for biodiesel production. Promoting research and development in the other eight approved technology pathways could open up access to more plentiful and cost-effective feedstocks, such as agricultural residues, dedicated energy crops, algae and municipal solid waste. One advantage of this surcharge is that it distributes the cost burden evenly among all users. Secondly, subsidies for investments or loan guarantees for SAF production facilities could be introduced to lower capital expenditure costs.
More than any other industry, aviation enables us to travel and connect globally. But it’s also among the biggest contributors to global warming—currently estimated to account for 2.5 per cent of human-caused CO2 emissions and 5 per cent of all emissions of greenhouse gases (GHGs).
As the world battles to limit the effects of global warming, aviation is on the front line. With demand for travel continuing to rise in the wake of the pandemic, urgent action is needed to reduce GHG emissions from aircraft so we can fly more sustainably.
While it’s a tough challenge, there’s already been significant progress. Today’s aircraft emit 80 per cent less CO2 per seat than planes in the 1950s. And global commercial aviation is assessed to have improved its average fuel efficiency by 2 per cent a year between 2009 and 2016.
Currently being blended with fossil kerosene, SAFs have a capacity to reduce emissions that varies with the feedstock used and the transition pathway. Today, their full potential is still far from being realised: less than 1 per cent of aviation fuels used in Europe are SAFs, with demand muted by their higher cost and the upfront capital expenditure they require.
Long-haul routes see the biggest markup per flight, at 6 per cent in 2038 (compared with 2 per cent for short-haul) on the IEA Net Zero pathway. And low-cost carriers (LCC) experience a cost markup around twice that of full-service network carriers (FSNCs).
Currently, both supply and demand for SAF are concentrated in developed economies. To meet rising demand for air travel in emerging and developing economies, technical assistance and capacity building will be required to accelerate the availability and use of SAF. This assistance may allow these economies to expand their SAF industries by utilising domestic natural resources, such as biomass.
Adoption of global sustainability standards may improve transparency in SAF environmental claims. This could provide a clear and consistent foundation for evaluating and verifying SAF’s sustainability, which is critical for investors, consumers and regulatory agencies.
Because different countries or organizations have different criteria and guidelines, harmonization may aid in the development of a unified set of standards that can be universally recognized and applied. This will aid in avoiding confusion, streamlining certification processes and facilitating international trade in SAF. Producers of the fuel can improve their access to international markets by adhering to globally recognized standards.
While the aviation industry currently accounts for less than 1 per cent of India’s total emissions, it is one of the fastest-growing economic sector. India is the world’s third largest aviation market.
