How to successfully scale up Sustainable Aviation Fuel solutions

Expanding the use of sustainable aviation fuel (SAF) is currently facing the classic ‘chicken and egg’ challenge. Over 370,000 flights have used SAF since 2016, but it still accounts for only about 0.01% of the jet fuel market. That’s because the cost remains far too high, which keeps demand far too low. Producers need capital to invest in new production capacity and reach a scale that competes with existing fossil fuels. Most shippers are unwilling or unable to pay the price premiums necessary to fund these investments.

Here's the thing: we need SAF right now because there are few real alternatives. Limiting global warming to well below 2°C, as outlined in the Paris Agreement, and increasing ambitions to limit it to 1.5°C compared to pre-industrial times, requires every industry to decarbonize. Transportation is one industry that is falling behind. Battery technology is not ready for long-distance commercial flights, which cause most air transport emissions. And hydrogen power is not mature enough to replace jet engines in larger aircraft. SAF is simply the best option we have to scale up sustainable aviation fuel solutions and reduce air transport emissions.

Pooling resources for sustainable aviation

How can we solve this problem? How do we create demand and spawn supply? The answer is by joining forces with like-minded companies and organizations. 

One example is the Clean Skies for Tomorrow Coalition (CST), led by the World Economic Forum (WEF). CST brings together stakeholders across and beyond the aviation value chain to align on a transition to SAF and ultimately achieve carbon-neutral flying. We’re a proud supporter of the coalition and signatory the CST’s 2030 Ambition Statement. One important project is developing a workable solution to create a voluntary market for SAF that will unlock new revenue and accelerate SAF production. In 2021, the WEF, in collaboration with PwC Netherlands and RMI, released a white paper introducing a “sustainable aviation fuel certificate” (also “SAF certificate” or “SAFc”) as such a solution. We believe this is a game changer.

To test the SAFc concept, we joined United Airlines’ Eco-Skies Alliance in 2021, which utilizes a ‘book and claim’ system (more on that below) to help fund the purchase of SAF. In early 2022, we started a three-year cooperation with Air France KLM Martinair Cargo to purchase 33 million liters of sustainable aviation fuel. And recently, in one of the largest SAF deals to date, we launched a strategic collaboration with bp and Neste to buy more than 800 million liters through 2026.

How do sustainable aviation fuel certificates work?

SAFc is modeled after energy attribute certificates (EACs), which helped enable the power of markets to drive change and accelerate demand for renewable energy. Energy consumers can’t control the source of the energy piped into their homes. The same goes for people who purchase passenger seats or air cargo services: they have no control over the fuel pumped into the aircraft that takes them on vacation or carries their goods to market. Corporations and individuals can purchase sustainable aviation fuel certificates to achieve their climate goals while simultaneously funding the ramp-up of SAF production.

So, how exactly do sustainable aviation fuel certificates work? Fuel producers generate an SAFc for each metric ton of SAF produced from sustainable feedstock. They sell the physical fuel and the virtual energy attributes as SAFc. Aircraft operators receive the fuel and claim the value of the direct emissions reduction (Scope 1). Air transport customers can buy the value of the indirect emissions reduction (Scope 3). All this will lead to more investment in SAFs and ultimately scale up sustainable aviation fuel solutions.

What is ‘book and claim’?

A sustainable aviation fuel certificate is a virtual solution to a physical problem. It’s nearly impossible to track the journey of SAFs from production to the airplane – and creating a separate, end-to-end supply chain for SAFs would be an extremely costly logistical nightmare. 

‘Book and claim’ is a digital system used to track and transfer the emissions reductions from sustainable fuels across the value chain. By buying and selling SAFc, companies can own SAF attributes without physically tracing the fuel through the supply chain. The system gives everyone in the industry, regardless of location or size, access to the market. DHL Global Forwarding first piloted the system with select customers before making it available to all in February 2022. 

Collaborating with committed partners to drive demand for SAF

To take advantage of this game-changing model, we must work with partners across the aviation value chain. It is the only way to stimulate the changes needed to create an SAF marketplace – to drive up the demand for and, in turn, the supply of sustainable aviation fuel.