International airways physique urges oil sector to take a position extra in sustainable aviation gasoline.
The oil and gasoline sector and different gasoline producers have to beef up efforts to supply greener aviation gasoline to assist airways to chop carbon emissions, the chief economist of world aviation business physique IATA mentioned.
Aviation accounts for an estimated 2-3% of world carbon emissions and isn’t a straightforward business to decarbonise in contrast with different types of transport akin to highway journey.
Sustainable aviation gasoline might scale back aviation emissions by as much as 80% and is seen as the important thing inexperienced resolution for the sector.
But it surely makes up solely 0.2% of world jet gasoline use, or about 500,000 metric tons of manufacturing, which is decrease than the aviation business anticipated, primarily based on IATA figures. It additionally prices between three to 5 instances greater than conventional jet gasoline.
Solely 3% of world oil and gasoline capital budgets are invested into SAF manufacturing, whereas revenue margins are a lot increased within the sector than in aviation, which is ready to achieve a 2.7% revenue margin in 2024, IATA chief economist Marie Owens Thomsen advised a media occasion in Geneva.
Marie Owens Thomsen, IATA Chief Economist mentioned:
This clearly has to vary.
By 2050, 500 million metric tons of SAF will probably be wanted to satisfy environmental targets, whereas by 2030, 63 million metric tons of SAF is ready to be in manufacturing, primarily based on an IATA forecast.
That funding burden can’t fall to airways alone, IATA mentioned.
Owens Thomsen estimated that airways might spend as much as $2.4 billion in 2024 on prime of their common prices to safe SAF.
Dozens of airways have signed uptake agreements with SAF producers world wide as strain rises in Europe to satisfy regulatory necessities that come into pressure in 2025.
OVERSUPPLY CONCERNS ARE ‘NONSENSE’
SAF producers have complained that they lack certainty by way of how a lot gasoline to supply and that they might face oversupply points within the coming years.
In November a Neste (NESTE.HE) government mentioned the oil refining firm might have extra SAF manufacturing capability by 2028 and requires extra certainty about long-term demand to justify funding after that time.
Willie Walsh, IATA head mentioned:
That is nonsense from Neste
“Each drop of SAF that’s produced has been used and will probably be used.”
Thomsen additionally mentioned the SAF market must develop into extra international in order that manufacturing can meet demand the world over, not simply in areas the place SAF vegetation are positioned.
A Neste spokesperson mentioned that regulatory help is vital to create the required “demand certainty”.
“With SAF demand being international simply as Neste’s prospects and provide capabilities (are), we is not going to have extra capability … We’re all aligned on the significance of coverage help,” the spokesperson added.
International airways physique urges oil sector to take a position extra in sustainable gasoline, Geneva, December 7, 2023
