EU SAF blending mandate proposals ambitious but feasible, says SkyNRG analysis report

An analysis by major sustainable aviation fuels (SAF) supplier SkyNRG of the European Commission’s ReFuelEU Aviation initiative, part of the ‘Fit for 55’ package of legislative proposals unveiled last week, shows around 300 SAF plants with an average production capacity of around 100,000 tonnes per year will be needed by 2050 to meet EU demand under the SAF blending mandate that underpins the initiative. With only 15 plants expected to be operational by 2027, over 10 plants will therefore be needed to be built in the EU each year thereafter to reach the 2050 requirement unless SAF is imported from outside the EU. However, in its assessment of targeted SAF volumes towards 2030, the scope of the ‘Fit for 55’ package, SkyNRG believes supply can match demand provided currently announced production capacity materialises and either additional production capacity is developed or SAF is imported. After 2030, fast deployment of new SAF technologies will be required up to 2050.

The ‘Fit for 55’ package is intended to help achieve an EU-wide GHG reduction target of 55% by 2030, compared to 1990 levels. The ReFuelEU Aviation proposal includes a 2% blending obligation on fuel suppliers for SAF in 2025, increasing to 5% in 2030 and then rising steeply to 32% by 2040 and 63% in 2050 (see article). A specific sub-mandate applies for e-kerosene (aviation e-fuels described by the Commission as synthetic aviation fuels), which starts with 0.7% in 2030, 8% by 2040 and increases to 28% by 2050. (See Figure 1 below.)

A few EU States have already implemented or are proposing a national blending mandate, with some more ambitious than the Commission’s proposal, which wishes to see EU-wide harmonisation. To meet both the EU-wide mandate and the additional volumes from national mandates, SkyNRG estimates this would require 3.5 million tonnes (Mt) of SAF in 2030, rising to 30 Mt in 2050. This compares with just 0.1 Mt of global SAF production in 2020.

“Our in-depth analysis, ‘A Market Outlook on Sustainable Aviation Fuel’, finds that while the proposed mandates are ambitious, they can be mostly fulfilled with EU production capacity,” said Tom Berg, SkyNRG’s Policy & Sustainability Manager. “To meet the targeted volumes until 2030, however, there will be a heavy reliance on waste oils as feedstock via both the HEFA and co-processing technology pathways. After 2030, technological developments are required fulfil the mandated volumes up to 2050.”

To achieve the rapid deployment of new SAF technologies and the required 300 SAF plants, Berg said: “All stakeholders will need to play their part to engage and address the challenges ahead – governments, investors, industry, and individual and corporate travellers.”

The report says that while up until 2027 the mandated amount of SAF in the EU can be fulfilled with European-based SAF production, this is provided currently announced renewable fuel capacity materialises. The increasing mandated SAF demand up to 2030 can be met with yet-to-be-announced SAF capacity, switching capacity from renewable diesel production or by importing SAF from outside the EU. Beyond 2030, new technologies such as gasification, alcohol-to-jet and power-to-liquids will have to be scaled up speedily but it is unlikely the targeted volumes can be met without structural imports of SAF or intermediate products needed for EU SAF production.

The assessment assumes EU countries adopting more ambitious mandates than those proposed stick to their decisions to create a national mandate ‘top-up’ and EU (excluding UK) jet fuel demand recovers to pre-Covid volumes in 2024, after which it remains constant at 47.4 Mt per year. Total anticipated mandated volumes for advanced biofuels and e-kerosene are 1 Mt in 2025, 3.5 Mt in 2030 and 30 Mt in 2050.

The majority of the announced plants until 2027 make use of waste oils and fats as feedstock, for which there is a tight European market and a reliance on the HVO/HEFA route until 2030. The implication of a substantial increase in imports carries both sustainability risks and heavy dependency on non-European countries in reaching short-term mandated volumes, cautions the report. Demand-side stimulation for SAF in other regions, for example the United States, will also increase demand for biomass and SAF volumes. On the other hand, a rapid electrification of road transport may increase available biomass and production capacity for SAF.

While the 2030 targets set out by the proposed EU mandate are still feasible, believes SkyNRG, it is the post-2030 targets that present a challenge, given the quadrupling of mandated volumes between 2030 and 2040 (see Figure 2 below). To assess the viability of meeting them, SkyNRG compared and built upon the analysis carried out by the Energy Transition Coalition under the World Economic Forum’s Clean Skies for Tomorrow initiative to develop a projection aligned with its own assumptions on a realistic growth scenario, rather than maximised EU production potential.

Due to constraints in the availability of renewable power for power-to-liquid (PtL) aviation fuels and restrictions on SAF obtainable from waste oils and fats, the major share of bio-advanced SAF will have to come from cellulosic waste and residue streams in the long run, using pathways such as gasification combined with Fischer-Tropsch (FT) and alcohol-to-jet (AtJ), says the SkyNRG report. It considers it unlikely that a large share of the EU renewable power supply would be allocated to e-kerosene production, with modelling elsewhere showing PtL SAF production consuming around 10% of the expected EU total by 2050. It acknowledges other studies foresee a more dominant role for PtL aviation fuels.

Although the ReFuelEU targets are ambitious, they are achievable “with the right set of enablers in place,” concludes the report, which include:

• Increased support for new conversion pathways to convert sustainable feedstocks beyond just waste oils and fats, such as AtJ, FT or PtL;
• Large-scale mobilisation of cellulosic feedstocks through new supply chains;
• Rapid renewable electricity deployment to produce PtL aviation fuels in a sustainable way;
• A solid, science-based sustainability framework to drive the transition; and
• Corporate climate commitments as important streams of revenue to bring new SAF capacity online.

SkyNRG says the analysis was conducted to inform its business strategy but the company was sharing the insights to enable other organisations to learn and potentially direct resources into growing the SAF industry, and intends updating the report every six months.

“We would like to invite all stakeholders, inside and outside the SAF supply chain, to provide us with your viewpoint and explore how to join forces to scale the SAF industry and decarbonise aviation,” commented the company.

The European Commission has opened an eight-week public feedback consultation on the ReFuelEU Aviation legislative proposals, which runs until 14 September 2021.

Top photo: SkyNRG