AI Root Barron's
Why the Aerospace Industry Wants More SAF
June 15, 2021
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  • Aerospace-engine giants General Electric and Safran laid out plans to dramatically cut carbon emissions for commercial air travel on Monday. The pair unveiled new engine designs and even talked about developing technologies to use hydrogen gas as fuel in planes. The biggest potential cut to carbon emissions however, for the industry might come from sustainable aviation fuel, or SAF. The problem is, no one can get enough of it.

    SAF is a little like ethanol for planes, and its use has the potential to cut aviation’s carbon footprint by as much as 80%. New engine designs, for comparison, can only cut the carbon footprint by 20% by being more efficient at burning conventional fuel. SAF gains can be substantial.

    The reason SAF has a lower carbon footprint is because it doesn’t originate from fossil fuels such as oil or natural gas. Instead it’s derived from waste oils or wood waste.

    Wood or biomass-based fuels have a lower carbon footprint because of a kind of circular effect. When the fuel is burned it released carbon dioxide, the greenhouse gas blamed for global climate change. But when wood and grasses grow back, they remove carbon dioxide from the atmosphere.

    American consumers are familiar with a biomass-based fuel they pump every day. Ethanol makes up as much as 10% of the blend in U.S. gasoline and, in America, ethanol comes mainly by converting the sugars from corn.

    About one third of the U.S. corn crop goes into ethanol production. The U.S. is the largest corn producer in the world, and it’s hard to get enough plants to supply all the needs of the auto industry.

    The global aviation industry is doing even worse. “SAF makes up 0.1% of all aviation fuel used,” John Slattery, president and CEO of General Electric’s (ticker: GE) GE Aviation unit, tells Barron’s. He believes governments will have to start to focus on SAF as a policy to ensure supply.

    Even though SAF isn’t widely available, airlines, aircraft assemblers, jet-engine makers, and oil companies plan to use it to reduce the aviation industry’s carbon footprint.

    GE and Safran, for instance, will ensure that their engine technology can run on any fuel. That shouldn’t be a challenge, but it requires testing and certification. It should be noted that SAF is, essentially, chemically equivalent to regular jet fuel.

      Boeing (BA) is working to make sure its aircraft are certified to fly on 100% SAF by 2030. Delta Air Lines (DAL) says plans to use 10% SAF by 2030. And BP (BP.London) calls itself one of the leading marketers of SAF. BP wants to wants to have 20% SAF market share by 2030.

    Those are some big goals. Production will have to ramp dramatically. Pre-pandemic, global jet-fuel demand amounted to about 8 million barrels a day, and roughly 8,000 barrels of SAF were being used. SAF production will have to rise roughly 50% a year for a decade to reach some of the industry’s goals.