- Enough sustainable feedstock supplies, such as municipal waste, agricultural residues and cooking oil waste, exist to reach production levels of 500 million tons of Sustainable Aviation Fuel (SAF) annually, meeting the projected jet fuel demand of all aviation by 2030.
- Planned production capacity investments will, however, only yield 4 million tons annually by 2030 – approximately 1% of global jet fuel demand for 2030 – requiring the urgent stimulation of a viable SAF ecosystem to reach 2030 decarbonization targets.
- Hybrid-electric and hydrogen-powered aircraft could help the industry reach the next efficiency target, but development and deployment at scale could take 10 to 20 years.
- The Cleans Skies for Tomorrow (CST) initiative is working on a pilot project for the creation of a SAF sector in India and plans to replicate this process in other markets.
The Sustainable Aviation Fuels as a Pathway to Net-Zero Aviation Report shows that a transition to carbon-neutral flying is possible, with SAF the most promising decarbonization option in the near term.
There are enough sustainable, renewable feedstocks to fuel all aviation using SAF by 2030. Scaling up SAF production to meet the net-zero ambition, however, depends on several new technology routes and significant multistakeholder collaboration. The main challenge will be developing appropriate commercial, financing, incentives and regulatory mechanisms.
SAF as a feasible route to net-zero aviation
In 2019, aviation accounted for 3% of human-made carbon emissions. Hybrid-electric and hydrogen-powered aircraft could help the industry reach the next efficiency target, but development and deployment at scale could take 10 to 20 years and the technology will initially be limited to smaller, shorter-range aircraft.
Furthermore, in 2019, fewer than 200,000 metric tons of SAF were produced globally, a tiny fraction of the roughly 300 million tons of jet fuel used by commercial airlines.
More positively, SAF has already fuelled more than one-quarter of a million commercial flights and is compatible with existing aircraft and fuelling infrastructure.
Even following the challenge to aviation during the COVID-19 pandemic, members of the CST coalition are continuing their commitment to drive energy transition in aviation towards the goal of net-zero aviation.
An economic opportunity for developing markets
Aviation delivers significant benefits globally, not least to developing markets, from where a sizeable portion of global aviation demand is expected to come. The current crisis may also present an opportunity for countries with low renewable power prices and ready access to feedstock. If these countries act now, they can benefit from energy transition in aviation and become global SAF production hubs.
“The structural changes happening in the industry are an opportunity to rebuild and transition towards a low-carbon future and meet the sustainability demands of its consumers,” said Christoph Wolff, Head of Mobility Industries at the World Economic Forum.
To this end, the CST initiative is working on a pilot project to create a SAF sector in India and plans to replicate this process in other markets that have the necessary conditions to foster a valuable SAF industry.
Building scale is key to improving cost
This report, written in collaboration with McKinsey & Company, shows that despite feedstock availability and even if all currently announced SAF projects are completed, capacity will only increase to approximately 4 million tons annually, which equates to approximately 1% of global jet fuel demand in 2030.
Currently, SAF is more than double the cost of conventional fuel. As further innovations and efficiencies of scale in production are achieved, prices will drop.
“We see the classic Catch-22 problem as in other energy transition discussions. Insufficient scale drives per unit costs high and high costs keep demand low. Some structural solutions could break this impasse – B2B contracts, prioritized aviation and airport fee structures etc. that will give fuel producers the required support to invest in production capacity,” said Daniel Riefer, Associate Partner, McKinsey & Company.
Investments can accelerate promising new technologies
Fuels produced from used cooking oil and other lipids will contribute most to developing capacity in the short term. New technologies take time to mature and develop, but investment decisions, including building larger demonstration plants, are needed now.
Power-to-liquid fuels can contribute the most to SAF capacity, but will only prove effective after 2030 under current development plans. Fuels made from CO2 and green electricity will require financial support for their technology to mature and will need access to renewable electricity.
There is no silver bullet for net-zero aviation. No single feedstock will be practical in every geography or yield enough SAF to meet all demand. Even as costs fall, SAF will have higher production costs than fossil fuels, though a rising carbon price may enable parity in the 2030s.
While the report demonstrates that enough feedstocks are available globally to make SAF economically viable and scalable, several factors are required. These include supportive regulatory frameworks, measures to stimulate demand from corporate and private customers, and innovative ways to finance the transition. The CST coalition is debating how to meet these challenges and help aviation earn its right to keep growing.
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Carbon offsets ... may be beneficial and airlines are on board with market-based measures such as CORSIA, which may advance global reforestation. Reforestation offsetting schemes can cost as little as $5 per metric ton of CO2 captured, but increasing demand could lead to significant cost increases over time and there remain significant risks and questions over their long-term effectiveness. Other offsetting projects include resource recovery, such as capturing methane from landfills. Geological sequestration may be the most effective option currently available, but it is expensive and is still a nascent technology.
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HEFA (Hydroprocessed Esters and Fatty Acid synthetic paraffinic kerosenes - SAFs) will likely remain the most efficient pathway through 2030. It is the most cost competitive since the proven technology requires relatively little capital investment – the main barrier is the cost of feedstock, a commodity with no big cost-reduction potential. Production costs depend mostly on the cost of feedstock, which today ranges from about $600 to $950 per metric ton. Including the cost of used cooking oil, solar-based hydrogen and operating and capital expenses, which should all decline in the years ahead, total production costs per metric ton of SAF could decrease from around $1,400 today to around $1,100 by 2050 in constant dollars, compared to a steady cost of fossil jet fuel of about $620. Due to falling production costs and availability of sustainable feedstock, by 2030, HEFA produced anywhere in the world could cover 100% of European jet fuel demand at less than 1,500 USD/t.
In this pathway today, capex represents more than 80% of production costs when using municipal solid waste as feedstock. This waste is priced at zero today, given the value associated with removing it from urban waste streams. Overall production costs per metric ton should decline from around $1,900 per metric ton today to $1,600 in 2030 and $1,400 in 2050, a 24% decline even assuming that demand for MSW rises until it has a cost. There are significant benefits to using municipal solid waste as a feedstock. First, solid waste presents growing challenges in urban areas around the world, where land is scarce and residents are concerned that landfill may release methane, CO2 and noxious odours into the air and pollutants into waterways and aquifers. The UK government, for example, is raising landfill taxes to £95 per metric ton (about $123 per metric ton), resulting in MSW having an effectively negative cost as a feedstock.
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Gasification of forestry residues and other cellulosics require smaller capital investments but feedstock costs can vary from $33-$220 per metric ton depending on the region. Production costs per metric ton could fall from about $2,100 today to $1,800 in 2030 and $1,550 in 2050. Adding carbon capture to production could reduce lifecycle GHG emissions to even more than 100% – meaning a negative rate of lifecycle emissions – at a relatively low incremental cost. This process would add about 6% to the cost of fuel. In a typical plant with FT reaction, for example, removing and capturing a share of the CO2 from syngas is already a process requirement to reduce the size and cost of the FT process step and increase yield.
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In the AtJ (Alcohol-to-Jet synthetic paraffinic kerosene) pathway, feedstock costs vary in the same range of $33-$220 per metric ton, driven mainly by the cost of ethanol. Ethanol production costs should fall by about 1% per year and capital expenses by about 35% until 2030 and continue to decline about 1% per year thereafter, lowering SAF production costs per metric ton from about $2,400 today to $1,800 in 2030 and $1,600 by 2050. The cheapest feedstock could be the biogenic part of municipal waste, depending on gate fees, local policies and which cover crops are the most expensive.
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In PtL (Plant-to-Jet synthetic paraffinic kerosene) pathways, operating and input factor costs represent 80%-90% of production costs today, depending on the specific production process. While reverse-water-gas-shift has very high hydrogen costs based on electricity and capex, co-electrolysis incurs comparable electricity costs directly. These costs vary greatly by power source and region but should fall significantly. The cost of a megawatt hour of solar power is likely to decline from $59 today to $33 in 2030 and $18 in 2050. Hydrogen created by solar power costs $7.30 per kilo today but could fall to $3.20 by 2030 and $1.70 by 2050.
Likewise, industrial CO2 feedstock needed for all PtL routes now costs about $80 per metric ton but the price could drop to around $65 by 2030. Given these declines in processing and feedstock costs, SAF production expenses in these pathways should fall from more than $3,800 per metric ton today to under $2,000 by 2030 and just $1,300 by 2050.
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Read the full report here.
Clean Skies for Tomorrow
The World Economic Forum’s CST initiative, established in 2019, is a mechanism for leaders throughout aviation’s value chain to facilitate the transition to net-zero aviation by mid-century. In partnership with ambitious senior leadership throughout industry, government and civil society, this public-private partnership is driving a shift to zero-emissions aviation through SAF and other clean propulsion technologies.
The Green Horizon Summit (9-11 November) and Race to Zero Dialogues (10-12 November) are hosted by the World Economic Forum. They bring together leaders from business, government and civil society to ensure the post-COVID recovery is sustainable and inclusive. The events will hopefully spur greater climate action on industry, transport and oceans as well as drive green finance. Check out more on our events page..
Press release dated 11 November 2020
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