At IATA conference, doubts about sustainable fuel goals

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The airline industry has committed to achieving net-zero emissions by 2050
The airline industry has committed to achieving net-zero emissions by 2050 Photo Credit: Cubrazol/Shutterstock

DUBAI -- In November, the United Nations' aviation arm set a goal of reducing aviation emissions 5% globally by 2030, largely through the use of sustainable aviation fuel (SAF).

But as they convened here last week for the IATA Annual General Meeting, airline industry leaders were dubious about whether that target of the International Civil Aviation Organization (ICAO) could be met. 

"When we look at where SAF is being produced, it's very clear to us it won't be achieved in some parts of the world," IATA director general Willie Walsh said during the three-day event. 

As an example, he noted that in South America there currently isn't any SAF being produced. 

The airline industry has committed to achieving net-zero emissions by 2050, with IATA estimating that SAF will be responsible for 65% of that carbon reduction. The ICAO, too, has adopted the net-zero 2050 goal.

But in Dubai, Walsh emphasized that IATA never aligned behind the interim 2030 goal. 

"We didn't push for 5% by 2030 because we don't believe that we can achieve 5% by 2030," he said. 

This year, global SAF production will triple to 500 million gallons, according to IATA's latest estimate. However, that figure would still amount to just 0.5% of the aviation industry's fuel needs.

Last week, IATA released a downward revision of its 2030 SAF production estimate. The trade group had earlier projected that announced projects would enable production to increase by a factor of more than 40 by 2030 compared to this year. But an appraisal of those projects led IATA to reduce that capacity forecast by 19%. 

Currently, 140 projects with the capability to produce renewable aircraft fuel are slated to be online by 2030. 
To achieve the ICAO's 2030 goal, IATA said, SAF would need to account for 27% of renewable fuel production capacity globally. Right now, it accounts for just 3%, with other technologies, such as renewable diesel, being produced in much higher volumes.

Fuel producers called out

That dynamic sparked conflict at the IATA meeting. The trade group's ire is often aimed at governments, which it says need to do more to invest in SAF and to incentivize production. But IATA also accuses fuel producers of dropping the ball.

In one pointed moment during a panel that featured representatives from the Finnish energy company Neste and the French petroleum producer TotalEnergies, Walsh called out TotalEnergies, noting that its net profit of $23.2 billion last year was close to the $27.4 billion profit realized by the entire airline industry. Producers like TotalEnergies, he said, need to step up their commitment to SAF. 

The remark sparked a sharp retort from Louise Tricoire, TotalEnergies' head of aviation fuels, who said the company is spending hundreds of millions on SAF this year as part of a $5 billion overall investment in renewable fuels. 

"I don't agree that we aren't doing enough for SAF," Tricoire said. "We are doing a lot."

Underlying the challenges of scaling SAF production is the fuel's cost. Airlines are currently paying between two and five times as much for SAF as they are for conventional jet fuel, according to IATA. 

Airlines like Qantas can't stomach paying a 400% premium for green fuel, said Andrew Parker, the carrier's chief sustainability officer, during a panel. 

Indeed, passing today's SAF costs along to consumers would put an end to the affordable flying that the public has grown used to, said Vik Krishnan, an aviation-focused partner for the consulting firm McKinsey. 

But, he explained, jet fuel accounts for less than 10% of the portfolios of major energy producers, trailing well behind road transport fuels. 

"The oil companies are thinking, 'I'll worry about this after I'm done worrying about when cars are going to electrify,'" Krishnan said. "They're thinking, 'SAF is great, but it's priority 10 on my list.'"

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