Airlines and Energy Firms Clash Over Sustainable Aviation Fuel Supply

7 months ago Editor

At a recent summit, airlines and energy companies sparred over the limited availability of Sustainable Aviation Fuels (SAF), highlighting the challenge of meeting ambitious environmental goals amid surging demand.

Airlines and energy companies are at odds over the limited availability of Sustainable Aviation Fuels (SAF), as the aviation sector faces supply chain issues and pressure to meet environmental goals. The International Air Transport Association (IATA) summit ended with unresolved tensions, despite airlines’ commitment to achieving net-zero emissions by 2050 primarily through SAF. Currently, SAF supplies only cover 0.5% of fuel needs, causing friction at the summit attended by major energy firms, including France’s TotalEnergies.

IATA Director General Willie Walsh criticized energy companies for insufficient investment in SAF development, pointing out that TotalEnergies’ net earnings in 2023 were almost as high as the entire airline industry’s. In response, TotalEnergies’ senior vice-president Louise Tricoire defended the company’s investments in renewable energy, asserting their commitment to aiding the aviation industry’s environmental goals.

SAF production doubled in 2023 and is projected to triple in 2024, but its high cost, three times that of kerosene, poses a significant challenge. Airlines argue that these costs must be passed on to consumers and highlight the competition with other industries for renewable fuel. Government support is deemed essential to achieving the 5% lower emissions target by 2030, set last year, yet IATA has refrained from setting its own interim targets due to the lack of widespread government policies.

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Despite reaffirming the 2050 net-zero target, some senior delegates privately expressed doubts about the feasibility of this goal. The aviation industry faces the dual challenge of transitioning to greener fuels while meeting post-COVID demand, a task likened to performing “heart surgery while running a marathon” by Qantas Chief Sustainability Officer Andrew Parker.

Environmental groups in Europe emphasize that the industry’s growth exacerbates the challenge of meeting emission targets, especially with IATA predicting nearly $1 trillion in revenue for 2024. However, the demand for greater connectivity in regions like India, China, Latin America, and Africa contrasts with this view.

The summit in Dubai, attended by a record 1,700 delegates, underscores the global scale of the issue, with the next annual IATA meeting scheduled to take place in Delhi, further spotlighting the growing aviation powerhouse.