13 June 2024

GreenAir News

Reporting on aviation and the environment

Sustainable aviation fuel initiatives take off in five Asia-Pacific countries

The transition of Asia-Pacific markets to sustainable aviation fuel has just been boosted in five nations, with fresh developments in Australia, Singapore, Japan, Malaysia and Thailand. The Australian government, in its 2024 budget, has announced plans to fast-track support for a low-carbon liquid fuel sector, with a specific initial focus on SAF, while Singapore Airlines and its low-cost sibling Scoot have announced their first purchase of the fuel at Changi International Airport from the newly activated Neste Singapore refinery, currently the world’s largest single SAF production plant.  Two major collaborations have also been announced between Japanese and Malaysian partners, in which SAF produced in Malaysia will be supplied to Japan, to help meet that country’s 2030 mandate of 10% SAF usage. Another regional collaboration will see used cooking oil sourced from another Japanese company used to help produce SAF at a new refinery due to open in Thailand in the first half of 2025.

Following strong lobbying from the aviation and energy sectors, the Australian government has committed to supporting the production of low-carbon liquid fuels, including SAF, in the Net Zero strategy of the nation’s Future Made in Australia Plan.

Over the next decade, the government will invest A$1.7 billion ($1.14bn) to support the Australian Renewable Energy Agency in commercialising net zero innovations including low-carbon fuels. 

Additionally, over four years starting in 2024-25, the government will commit A$18.5 million ($12.4m) to develop a certification scheme for low-carbon fuels including SAF and renewable diesel by expanding the national Guarantee of Origin scheme, which is already being developed to track and verify emissions linked to the production in Australia of hydrogen and renewable electricity.

A further A$1.5 million ($1m) will be spent over two years to investigate costs and benefits of introducing mandates or other demand-side measures to drive up the use of low carbon liquid fuels. The government will also undertake a “targeted” consultation on production incentives to support local production of new fuels. 

“Two years ago in Australia, SAF was an acronym with barely a skerrick of interest,” said Andrew Parker, Chief Sustainability Officer of the Qantas Group, one of the strongest advocates of developing a local SAF sector and mandates to drive up demand.

“The commencement of this funding and related policy measures are significant first steps on our path to decarbonise aviation here,” said Parker. “A progressive universal SAF mandate remains the most essential policy lever we have to secure capital and technology and ensure consistency and maintain competitiveness with our major trading partners.”   

Airbus, another strong advocate of and investor in Australian SAF, welcomed the government’s initiatives. “They will help move SAF from plans today into planes tomorrow,” said Stephen Forshaw, the airframer’s chief representative in Australia, New Zealand and the Pacific. “The world is moving to scale up production of SAF with supply-side support by governments helping to derisk early projects. Australia’s announcements recognise this.”

At Singapore’s Changi International Airport, the first SAF produced locally by global refiner Neste will be supplied to SIA Group‘s two carriers, Singapore Airlines and its low-cost sibling Scoot.

The carriers’ parent company, Singapore Airlines Group, has agreed to buy 1,000 tonnes of neat SAF, which Neste will then blend and transfer into the airport’s fuel system, one batch in the second quarter of 2024, the other in the fourth. The SAF will be produced from recycled waste and residue raw materials.

“This supply of locally produced SAF to Changi Airport is a milestone in our journey of supporting the aviation industry and governments in the region to achieve their emissions reduction goals,” said Alexander Kueper, Neste’s VP, Renewable Aviation. “We are looking forward to expanding our cooperation with Singapore Airlines as well as supplying visiting carriers at Changi Airport.”

The airline’s Chief Sustainability Officer, Lee Wen Fen, said the deal was an important step towards a target of including 5% SAF in its total 2030 fuel use. As well, from this month, SIA will offer 1,000 SAF book-and-claim units (BCUs) for purchase by corporate travellers, shippers and freight forwarders to help compensate for their flight emissions. Each BCU will equate to 1 tonne of neat SAF and its associated carbon dioxide reduction benefit.

Three Japanese corporations have also entered new SAF deals, with two in Malaysia and one in Thailand.

Tokyo-based biotechnology company Euglena, which produces renewable fuels from used cooking oils and microalgae, has formed a new partnership with Malaysia’s national oil company Petronas to build and operate a commercial biofuels production plant in Malaysia. Euglena has also signed a Memorandum of Understanding with Japan Airport Terminal (JAT), which operates Tokyo’s Haneda Airport, to jointly develop a SAF supply chain to the airport, with the two also looking to commercialising and providing the fuel to airlines.

If the Japanese government’s mandate of 10% SAF usage by 2030 was applied to Haneda Airport’s total jet fuel consumption in 2022, the companies estimate the airport would require 220 million litres of SAF per year. Eugena and JAT claim they would be able to supply 50 million litres of SAF per year, or 23% of the total required.

Marubeni Corporation, another major Japanese industrialist, has just announced an MoU with InvestSarawak, a government agency in the Malaysian state of Sarawak, to study the feasibility of producing SAF from biomass resources in the region. No details of fuel volumes or production timeframes were disclosed.

Meanwhile, a third Japanese company, Sumitomo Corporation, has agreed to provide used cooking oil to Thailand’s Bangchak Group, which is developing a new SAF plant with capacity to produce 1 million litres of fuel per day, commencing in the second quarter of 2025. The UCO will supplement supplies collected by Bangchak through its 162 service stations in Thailand. In a separate deal, Sumitomo and Japan’s Cosmo Oil will buy SAF produced by Bangchak.

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