(Photo: Pixabay)
Decarbonization is considered the biggest challenge to the sustainable development of the aviation industry. Unexpectedly, the supply of Sustainable Aviation Fuel (SAF) is below expectations, causing anxiety among airline executives.
Kristof Van Passel, head of procurement operations and development at Cathay Pacific, expressed his concerns during the Bloomberg New Energy Finance Summit (BloombergNEF) held last Wednesday (Jan. 31). He said that most airlines have committed to achieving a SAF consumption ratio of 10% by the end of 2030, but the estimated supply may not meet the demand, and the disparity could be as high as 30%-40%.
According to Bloomberg, the proportion consumption of SAF in Cathay Pacific's only 0.03% of its overall fuel consumption. Even when considering global airlines, this figure only increases to 0.1%, falling far from the target.
In addition to the supply shortage, SAF price is 2-3 times higher than conventional fuel, posing a significant challenge for the aviation industry. Van Passel mentioned that due to the cost is quite huge, airlines may incur losses in a few months.
Willie Walsh, Director General at the International Air Transport Association (IATA), in an interview with India's aviation magazine “SP's Airbuz”, stated that production in 2022 will more than triple the previous year. Despite the high prices, Airlines are still used every drop. Walsh mentioned, “the production in 2023 can only meet about 0.2% of the overall aviation industry's demand, with a cost of approximately USD 1 billion.”
IATA estimates that to achieve net-zero carbon emissions in the aviation industry by 2050, the annual production of SAF needs to reach 118.6 billion gallons. Based on the current investment, the annual production is expected to increase from the current 3.3 million gallons to 1.3 billion gallons by 2025.
