Aviation faces capital and infrastructure challenges for future fuels
Leadership Insights newsletter story
The aviation industry is encountering familiar challenges in its decarbonisation transition as the sector seeks to cut its greenhouse gas (GHG) emissions to net zero.
The International Civil Aviation Organization (ICAO) set an aspirational goal in 2022 of reaching net-zero carbon emissions from international aviation by 2050. While the maritime industry is expected to pursue a multi-fuel path to its own net-zero 2050 target, sustainable aviation fuels (SAFs) play a dominant role in forecasts of aviation’s trajectory.
SAFs are non-fossil alternatives to kerosene jet fuel, including biofuels and e-fuels. According to Sustainable Aviation’s Net Zero Carbon Road-Map, 39% of the emissions abatement in UK aviation by 2050 will be attributable to SAFs. The next largest contributor, fleet upgrades with future aircraft types including those powered by hydrogen and electricity, accounts for 16%.
Feedstock availability will be a critical factor in meeting the need for biofuels in aviation and shipping, with the International Energy Agency (IEA) stating that realising growth in SAFs in the medium term will hinge on feedstock diversification and enlargement through land productivity and residue collection.
Adam Tozzi, Head of Underwriting Global Tasks and Processes, Aviation at Allianz Global Corporate & Specialty (AGCS), told ICS Leadership Insights: “The biggest hurdles for the adoption of SAF are not regulatory, instead they are within the production and supply chains. Additionally, the necessary capital expenditure needed for SAF infrastructure is not forthcoming outside of the major hubs.”
Alongside developing more efficient engines, Original Equipment Manufacturers (OEMs) such as GE Aerospace and Rolls Royce are focused on assessing the compatibility of existing engines with SAFs, evaluating any technical issues arising from using equipment with 100% SAFs and sharing results under a working group for the International Aerospace Environmental Group (IAEG).
The effort mirrors that underway in the maritime industry, where individual trials of 100% biofuel and various biofuel blends have been carried out for marine engines, and guidance for their use has been issued by propulsion machinery non-profit CIMAC.
Major hurdles ahead
Brandon Fried, Executive Director of the US Airforwarders Association said among the “significant challenges” in adopting SAF are “regulatory inconsistencies across countries, from production to transportation”, that hinder smooth operations.
Tozzi pointed to the ReFuelEU Aviation regulation, US Sustainable Skies Act and UK SAF mandate as regulatory support for SAF. As shipping awaits the final details of the International Maritime Organization’s (IMO) GHG mid-term measures, set to be agreed next year, aviation demonstrates the challenges that remain once regulation is in place.
Looking at a national level, Vineet Malhotra, Director of Kale Logistics Solutions, a Mumbai-based digital logistics provider for the air cargo sector, noted that progress with Indian airlines, while slow, is being driven by government’s targets for all domestic commercial flights to achieve 1% of flights to run on SAF by 2025. This would require around 140 million litres of SAF production per year.
Kale Logistics Solutions has worked closely with a number of national airlines and Malhotra shared insights into their moves with SAF. GMR Airports India, he told ICS Leadership Insights, has forged “strategic alliances” to push forward production of SAF in the country. Meanwhile Delhi Airport is focused on creating the necessary infrastructure, “setting the stage” for other airports including GMR Hyderabad and Goa International airports to adopt SAF.
Malhotra stressed the process requires “meticulous planning” to address critical issues including selecting the most suitable biomass feedstock for SAF production.
As yet, “only a few” airports in India have a consistent supply of SAF, said Malhotra, noting similar issues other country’s face of limited production as well as the cost of distribution and transportation. Availability of blending facilities and quality control at airports are also challenges. Furthermore, there remains uncertainty around the role of airports and the necessary infrastructure for the transition, “adding further woes”, he explained.
However, he is confident that, for India at least, supply woes will be limited, noting it currently has the capacity to produce double its projected requirements to meet government targets.
Supply limitations
In Europe, when it comes to quality, the European Union Aviation Safety Agency (EASA) plays an active role in the monitoring and facilitating SAF adoption. Its 2022 report showed SAF accounted for 0.05% of aviation fuel use in the bloc, with a 2% target for 2025.
A spokesperson for EASA told ICS Leadership Insights that fuel suppliers are mandated to achieve a 2% of SAFS in EU airports by 2025. Despite the fact that global SAF production has doubled from 300 million litres in 2022 to 600 litres in 2023, with production projected to triple this year, this still accounts for only 0.53% of global aviation fuel needs, they explained.
In line with the figures quoted by EASA, Fried also stressed that a key challenge to widespread adoption was limited supply. Painting a picture of shipping’s own possible future challenges with new fuels, he explained that inadequate infrastructure for the handling and storage of SAF further complicates matters.
He added that safety concerns for the fuel include potential differences in properties when compared to traditional jet fuel that require “careful consideration and specialised handling procedures”. While international safety standards like ASTM D7566 exist for SAF, Malhotra said “the adoption and enforcement of these standards can differ by country”.
Additionally, the higher cost of SAF compared to conventional fuel presents an economic barrier to widespread adoption, said Fried.
Warning signs
Maritime should pay close attention to the ongoing challenges of the adoption of SAF, with many of the issues currently being experienced, and resolved, by airlines, governments and airports, as well as fuel producers, likely to echo that of maritime’s future fuels trajectory.
Maritime leaders should also note the potential competition that airlines may pose for sourcing shipping’s own alternative fuels – as SAF is not the only option. While not yet on a wide scale, start-ups and established OEMs alike are also investigating the potential of zero-emissions fuels like hydrogen and battery power as a means of propelling aircraft.
The tight weight and space limits onboard an aircraft and the power requirements of flight necessitate high power density from energy sources. However, these alternatives are not yet taking off, with firms like hydrogen fuel cell developer Universal Hydrogen, shutting its doors just a year after it launched in 2023 when it failed to attract new investors.
“Perhaps we couldn’t convince the world that hydrogen, and not just SAF, are necessary for the future of aviation,” said Universal Hydrogen co-founder Jon Gordon.