New investment funds Clear Sky and SAFFA target sustainable aviation financing

Two new global investment funds focused on sustainable aviation – one backed by Airbus, the other by Boeing – have announced their first projects as concerns deepen across the air transport sector about a lack of capital to develop new fuels, infrastructure and technologies. Clear Sky has been launched by a team of aviation and finance executives to accelerate a range of projects that help cut aviation emissions. Clear Sky’s first commitment is a co-investment with Boeing in UK-based startup Firefly Green Fuels, which plans to convert sewage waste feedstock into SAF. A second consortium of seven prominent aviation and finance groups has established the Sustainable Aviation Fuel Financing Alliance (SAFFA), focused purely on speeding up production of SAF. Led by Airbus, SAFFA has invested in US-based Crysalis Biosciences, which has purchased a decommissioned ethanol plant in Illinois and converted it to produce low carbon intensity SAF and biochemicals.  

Clear Sky has been developed by six partners  – Krishnan Narayanan, a former partner and regional leader at PWC Strategy&, with broad experience in sustainability and new technologies; Simon Talling-Smith, a former CCO of Qatar Airways and EVP at British Airways, and a specialist in innovative technologies; Glenn Morgan, a former CTO of International Airlines Group (IAG) and founder of its Hangar 51 innovation programme; Robert Boyle, a former Chief Strategy Officer at IAG;  Kurt Stache, a former CMO of American Airlines; and Julia Sattel, a former president of travel technology group Amadeus and VP Strategic Marketing at Toshiba.

Its multi-strand investment strategy covers sustainable aviation fuel, carbon removal systems, alternative propulsion technologies, innovative ground operations and materials recycling.

“Our analysis showed sustainable aviation was highly underpenetrated when it came to capital, particularly alternative investment capital,” said Clear Sky founding partner Narayanan. “By various estimates, up to $5 trillion of capital will be required over the next three decades for aviation to get to net zero. So there’s clearly more capital required, but it needs to be invested in the right things in the right way by the right experts. And I think generalist funds generally struggle to do that. Hopefully by having a bunch of aviation experts act as a catalyst we can achieve both of those things.”

Together with Boeing, with which it has formed a broader partnership to invest in sustainable aviation and related sectors, Clear Sky announced during the recent Farnborough Airshow that it will support Firefly Green Fuels in transforming sewage waste feedstock through hydrothermal liquefaction, a process which uses heat and high pressure to convert waste into biocrude oil and biochar, a powdery product which can be used as fertiliser. The companies claim that SAF produced through this process could reduce lifecycle CO2 emissions by over 90%.

“SAF offers the greatest opportunity to decarbonise aviation, and the industry’s collective challenge of bringing it to scale globally requires new sustainable pathways,” said Boeing’s Chief Sustainability Officer, Brian Moran. “Clear Sky combines many years of investment expertise with knowledge on aviation’s decarbonisation challenges. Firefly’s technology holds transformative potential as the SAF feedstock – sewage waste – is accessible in all regions of the globe.”

Firefly CEO James Hygate said his company was clearing the way to “cost competitive and globally available fuel” in a market where demand for SAF well outstrips supply. “With the support of Clear Sky and Boeing, we are propelling toward our goal of commercial production in the UK by 2029,” he said, “and rapid replication across the globe.”

Clear Sky’s Narayanan welcomed the partnership with Boeing – “undoubtedly a leader in advancing aviation’s decarbonisation journey” – and signalled more projects would be announced.

Coinciding with the Firefly deal, travel technology group Amadeus also signed a letter of intent to invest in the debut fund from Clear Sky. “The journey toward sustainability in the travel industry is one we must undertake together,” said Decius Valmorbida, President of Travel, Amadeus.  

Airbus is leading the new SAFFA investment fund with big-name partners Air France-KLM Group, Associated Energy Group, BNP Paribas, financial services and capital group Burnham Sterling, Mitsubishi HC Capital and Australia’s Qantas Group. The companies, which collectively have committed approximately $200 million, partnered with Burnham Sterling Asset Management to establish the alliance, which aims to accelerate SAF production and provide members with priority access to the fuel. 

SAFFA’s first investment is in technology company Crysalis Biosciences, which is focused on renewing US chemical production infrastructure with new fuel and chemical technologies. Crysalis recently acquired and upgraded the Monarch facility, a decommissioned ethanol plant in Sauget, Illinois, and has just secured environmental approvals to produce low carbon intensity SAF and biochemicals.

“Each partner brings experience and financial expertise to the fund with the ambition to accelerate the availability of SAF by investing mainly in technologically mature SAF-producing projects using, for instance, waste-based feedstocks,” said Airbus. “Investments will be diversified across various SAF production pathways and also by region.

“Each partner may then enter into priority contracts to secure SAF offtakes from the various projects SAFFA will invest in for its allocated volumes. SAFFA is focusing on SAF that is eligible for RefuelEU Aviation or CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) certification.” 

Photo: Krishnan Narayanan (Clear Sky), Brian Moran (Boeing) and James Hygate (Firefly) sign investment agreement

Tony Harrington

Correspondent

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