Delta, JetBlue and United boost sustainable aviation fuel
The pandemic travel stay has given airlines the opportunity to refocus their sustainability initiatives. Several rounds of government largesse have helped the industry stay afloat before travel begins to return earlier this year.
Now, as travelers return to the skies, the race is on to accelerate the sustainable aviation fuel (SAF) market.
In late September, Delta Airlines signed an estimated $ 1 billion deal with Aemetis, a renewable fuels company, for 250 million gallons of SAF to be delivered over the next decade.
A day before Delta’s proclamation in September, JetBlue announced an estimated $ 1 billion deal with SG Preston, a bioenergy developer, to bring SAF’s largest offering to New York airports for commercial flights. The deal marked JetBlue’s largest single jet fuel contract to date. The deal, according to Robin Hayes, CEO of JetBlue, puts JetBlue ahead of schedule to achieve a 10% SAF target by 2030.
It doesn’t stop there. United Airlines signed earlier in September to purchase 1.5 billion gallons of SAF over 20 years – billed as the largest SAF deal in history – as part of a deal with Honeywell and cleantech firm Alder Fuels.
In the short run, SAF comes at a high cost, but as production increases and more [federal] incentives are introduced, this price should fall.
In addition to their individual efforts, these airlines and others are flying in formation to support the SAF cause: Along with 30 aviation executives, Delta and United joined the Mission Possible Partnership last week as part of a initiative that sets an ambitious path for phasing out fuel by 2050. The goal is to achieve 10% SAF by 2030 – a goal that requires an estimated annual investment of $ 300 billion, according to the coalition.
The SAF flight path
Many experts and leaders in the airline industry see SAF as the primary path to sustainable aviation, even though it will be years before planes can fly exclusively on this type of fuel.
And the pressure is mounting to find another flight path. Before COVID-19, airlines contributed about 2% of anthropogenic carbon emissions, and aviation is believed to be responsible for 12% of carbon emissions from all sources of transportation.
“There are no electric planes on the horizon, so the reality is that planes will burn fuel for a long time,” Jeremy Baines, president of Neste US, told me. On its website, Neste describes itself as the largest producer of renewable diesel and sustainable aviation fuel. “The choice then becomes, are we burning fossil fuels or are we burning renewable fuels? And we really can’t wait to answer that,” Baines said.
Neste, which works with both Delta and JetBlue, among other airlines, predicts it will produce 515 million gallons of SAF by the end of 2023. (For context, the aviation industry has used more of 18.27 billion gallons of total jet fuel in 2019.) The company says its blend – developed using substances such as agricultural waste and animal fat – can reduce greenhouse gas emissions by up to at 80% compared to jet fuel derived from fossil fossils.
Colloquially referred to as “drop-in” fuel, Neste’s MY sustainable aviation fuel can be used directly in airplanes without any structural modification to the vehicle. “We use the same infrastructure at airports, it goes into the same fuel tank, the same engine, and has an immediate impact the moment you use it,” Baines said.
The biofuels giant’s 2020 deal with JetBlue allowed the airline to become the first major US airline to claim carbon neutrality on domestic flights through carbon offsets and emission reductions. “We see SAF as the most promising way to directly and quickly reduce emissions from your boats,” said Sara Bogdan, Head of Sustainability and ESG at JetBlue. “But we are also working to improve the energy efficiency of our land vehicles and to increase our volume of offsets.”
However, it takes years to fill an aircraft tank entirely with SAF. The fuel technology itself is viable, but SAF represents less than 1% of the fuel available in the market. It also costs four to five times the amount of Jet A-1, or conventional airplane fuel. Although it would be possible to supply an aircraft with 50 percent of each fuel, these days SAF contributes a tiny amount per tank due to market limitations.
But even though the fuel tanks only contain 1-2% of the SAF, Baines said it can still make a difference as the total volume of non-renewable fuel decreases. This progress mentality is what companies like Delta and JetBlue are proud of.
“Our actions really say to our consumers, ‘Hey, we’re doing something right now that should give you confidence to fly sustainably with us,’” said Amelia DeLuca, Managing Director of Sustainability at Delta. The airline, according to DeLuca and the Delta marketing team, is currently the only carbon neutral airline globally. Delta directly reduces its emissions through investments in carbon offset projects aimed at fighting deforestation.
The government factor
While the energy-intensive airline industry may not be a sustainability priority, a radical change is already underway. “I would risk Delta and JetBlue to do some of the largest voluntary carbon offsets in the world,” Bogdan said. The two companies’ billion-dollar SAF deals have bolstered capital and equity goals, as well as their shared belief that, over time, the cost of producing SAF will become cheaper.
“Yes, in the short term, SAF has a high cost, but as production increases and more [federal] incentives are introduced, this price should go down, ”she said.
“Policymakers need to come forward to make the whole industry more sustainable,” Baines added. “It means smart policies, government incentives, and fuel targets that the whole industry can follow.”
In June, a group of US senators introduced the Sustainable Skies Act, which aims to facilitate and promote the transition to sustainable aviation fuel. The legislation, which major airlines have applauded, would create a tax credit starting at $ 1.50 per gallon for “blenders that provide sustainable aviation fuel with a demonstrated 50% or more reduction in emissions. greenhouse gas compared to standard jet fuel “.
For Bogdan, incentive programs can help make SAF more affordable for airlines and their customers. The additional government support also acts to minimize risks for investors who support sustainability initiatives and the development of sustainable fuels.
The bill, ideally, could help close the gap between rising fuel costs and the price that customers pay for airline tickets. Producers will be encouraged to do more SAF, and airlines will be encouraged to use more SAF – which can ultimately make customers feel as if they too can make an impact on sustainable travel.
“Airlines are under great pressure from customers,” said Sarah Green-Vieux, impact manager of Kindred, an ESG management consulting firm. “Customers are now focusing more on the environmental practices of the organizations where they spend their money, and this external pressure can cause a company to change or develop a policy response. “
Multinational giant Deloitte, which has engaged with SAF on the buyer’s side, is one example.
Along with RMI, Microsoft, JPMorgan Chase, Boeing and others, Deloitte is a founding member of the Sustainable Aviation Buyers Alliance (SABA). The priority of the coalition is the development of SAF and the development of policies related to SAF through business action.
“Low-carbon aviation is really important to us,” said Lisa Newman-Wise, Senior Director and Chief Sustainability and Climate Staff at Deloitte. “Travel is a significant part of Deloitte’s carbon footprint, which is why [coalition] is one way we aim to reduce employee emissions. “