1 December 2021

GreenAir News

Reporting on aviation and the environment

Major US corporates join buyers’ alliance to drive demand and investment for high-quality SAF

A group of America’s most prominent companies have become founder members of a partnership set up to drive investment in high-quality sustainable aviation fuel (SAF). The Sustainable Aviation Buyers Alliance (SABA) is an initiative of RMI and Environmental Defense Fund (EDF), with founding members Boeing, Boston Consulting Group, Deloitte, JPMorgan Chase, Microsoft, Netflix and Salesforce. A significant portion of the members’ carbon footprint results from business travel and by purchasing SAF, these corporations will be able to access the GHG reductions associated with SAF to directly mitigate their travel carbon footprint. SABA aims to create an aggregated demand for SAF, sending a potentially strong market signal for SAF which it expects will boost development of SAF production and investment into the sector, reports Susan van Dyk. According to RMI’s Adam Klauber, demand created by SABA could amount to 2 billion gallons of SAF by 2025, a significant volume based on current SAF production, which is less than 0.01% of current jet fuel demand.

SABA says its mission is to accelerate the path to net zero aviation through high-quality SAF, catalysing new SAF production and technological innovation and supporting member engagement in SAF policy-making. It has set out three objectives:

  • Expand the SAF investment opportunity by establishing an environmentally rigorous, transparent SAF certificate system, and develop an approach to aggregate member demand to incentivise new SAF supply;
  • Provide education and policy support to members; and
  • Assess emerging SAF technologies and address barriers to scale and cost reduction.

Even during the best of times, airlines operate on slim margins and have a limited ability to pay high premiums for SAF, which can range from three to six times higher than conventional jet fuel, although a number of major airlines have offtake agreements in place with potential SAF producers to narrow the price gap. Long-term development and commercialisation of SAF will require policy intervention to create a market demand and bridge the gap.

In the absence of such policies, SAF use may be limited to airlines willing to pay the price premium, funded through increased ticket prices or other mechanisms that may affect airline competitiveness. SABA’s members, on the other hand, could more readily pay a premium for SAF, said Adam Klauber, Senior Technical Advisor at RMI (formerly Rocky Mountain Institute), who leads its sustainable aviation team.

According to SABA Secretariat lead Kim Carnahan, Director of Disruption Technologies at ENGIE Impact and former US Chief Negotiator for Climate Change, “A large, growing number of companies have committed to ambitious climate goals and are focusing on driving reductions within their value chain.”

Added Microsoft’s Carbon Program Manager, Elizabeth Willmott: “We have a bold commitment to become carbon negative by 2030 and this requires us to create innovative new solutions and partnerships. As a corporate buyer and vocal supporter of high-quality SAF, we’re pleased to join together with companies leading on climate action to support SABA’s mission to decarbonise aviation and ultimately increase SAF production and adoption.”

Many corporations indirectly contribute to aviation emissions through business travel. The Boston Consulting Group, for example, indicate that business travel constitutes about 80% of the company’s carbon footprint. As they are not direct users of jet fuel, they cannot directly use SAF to mitigate these emissions, but Environmental Attribute Certificates (EACs), or SAF certificates, can be used to reduce this climate impact. Indirect emitters are willing to pay the premium but cannot take ownership of the fuel and EACs allow them to access the reductions within their value chain.

“SABA adds momentum to existing airline-company partnerships that support the purchase of sustainable aviation fuels,” said Kelley Kizzier, Vice President of the Global Climate programme at EDF. “SABA will build on the work of these early movers, many of whom seek a more scalable, standardised approach, by establishing a SAF certificate system with robust environmental criteria. Working with sustainability certification schemes, this system will verify and track emission reductions from SAF so that companies, organisations and even individual travellers can achieve their ambitious climate goals.”

Similar to a book-and-claim system, the environmental attributes of SAF will be decoupled from the physical fuel and tracked as SAF certificates using digital markers. The SAF certificate system includes:

  • a lifecycle assessment approach;
  • sustainability criteria; and
  • a tracking and verification approach to create a SAF traceability system and a SAF certificate registry system, established alongside approved sustainability certification schemes under ICAO’s Carbon Offsetting and Reduction Scheme (CORSIA).

The registry system will be designed to be publicly available and transparent, holding the SAF certificates purchased by companies and document retirement of certificates.

“SABA builds off the foundational SAF sustainability work under ICAO and the ‘Corporate Demand’ approach developed with the World Economic Forum’s Clean Skies for Tomorrow,” said Klauber.

A commonly used method of climate mitigation is the purchase of carbon offsets and this forms the basis of CORSIA. However, other studies, including a recent report from the Energy & Climate Intelligence Unit and Oxford Net Zero, argue offsets do not always provide fully additional effort, and reliance on them may present risks to effective mitigation. A clear conclusion from the report is that offsetting cannot be a substitute for significant emissions cuts. Net zero pledges can play a central role in guiding the ongoing emissions reductions needed to deliver the Paris goals, it says, but adds “analysis shows that these commitments vary hugely in their quality”.

SABA members, in contrast, have used Science Based Targets (SBT), an initiative to drive ambitious climate action in the private sector, which espouses a mitigation hierarchy that prioritises eliminating sources of emissions within the value chain. According to SBT, carbon offsets can only be used as a last resort. SBT helps companies set targets for reducing their carbon footprint and uses a scientific basis to verify targets in accordance with the Paris Agreement. The purchase of SAF and acquiring of SAF certificates therefore reduces the climate impact within the aviation sector where emissions are created.

The SAF market is nascent with significant challenges and current availability of SAF is limited. SABA will contract with SAF producers to purchase SAF certificates through RFPs, the first to be issued in Q1 of 2022. Using a 10-12 month lead time for delivery of SAF certificates will enable SAF producers to ramp up production and allow a broader group to SAF producers to participate as only two SAF producers can currently supply commercial volumes of fuel. This will support the creation of new and additional SAF supply capacity and send increased revenue to fuel suppliers, as well as enhance price transparency and competition in the SAF market.

Founding members will be limited to 12 corporations but according to Carnahan, SABA is planning to open up to broader membership after an official launch at COP26 in November. With a large membership, the aggregated demand for SAF could have a significant impact on SAF development and commercialisation, believes the alliance.

Scott Corwin, Deloitte US Leader for Sustainability and Climate Change, said: “Efforts such as SABA are important to harnessing the power of the market to set in motion and sustain the innovations needed to create a zero-carbon future.”

Fellow SABA member Dr Emma Stewart, Sustainability Officer at Netflix, added: “It’s impossible to stabilise the climate without decarbonising aviation emissions. Air travel plays an important role in how Netflix entertains the world – we can’t produce films, TV series and nature documentaries without it. We’re co-founding SABA to build a future where climate-friendly air travel is possible and invite other companies to join the charge.”

Said Carnahan: “This is just the beginning for SABA. We will announce additional founding companies soon.”

Photo: Alaska Airlines