Sustainable Aviation Fuels, or SAFs, are among the most important tools in the box for aviation to decarbonise and meet its net zero emissions goals. But challenges exist: supplier diversification, fuel availability, economy-wide cooperation and demand signalling are all needed to accelerate SAF up the production curve. But of all that, what are airlines’ priorities? We sat down with Josh Margul, JetBlue’s manager for sustainability and environmental, social & governance, for an in-depth discussion of the airline’s strategy and tactics as it decarbonises its operations.
“SAF is the most promising avenue for addressing aviation emissions in a meaningful and rapid way,” Margul tells us. “We’re focused on encouraging a diverse and competitive SAF market so the industry can reach the economies of scale necessary for SAF to reach wider availability.”
For its fleet of nearly 300 narrowbody aircraft, JetBlue is taking a multiple-supplier approach — inherently necessary at this point in the SAF production curve.
Its latest suppliers are Aemetis (125 million gallons of blended SAF to be delivered over ten years), AIR COMPANY (25 million gallons of AIRMADE SAF over five years), and Fidelis New Energy (at least 92 million gallons of blended SAF over five years).
“Through these existing and future SAF offtake agreements,” Margul says, “JetBlue seeks to build a diversified portfolio of future SAF suppliers and feedstocks while continuing to send the message that strong demand for SAF exists.”
With the barriers to entry in the SAF business high, infrastructure investment expensive, and in many ways SAF being something of a finite stopgap measure during the ecological transition to a low-carbon economy, sending these demand signals is crucial.
“Alongside our trade association Airlines for America, we advocate for policy incentives to help spur the SAF market and help achieve commercial production at scale, such as the 2022 Inflation Reduction Act, and California’s long-standing and successful LCFS [Low Carbon Fuel Standard],” Margul explains. “In the near term, we are looking forward to continuing to grow our relationships with our existing SAF suppliers and increasing our percentage of SAF usage. At the same time, we are excited to be pursuing new sources of immediate supply to help us bridge to mid-decade when we expect many of the larger announced projects to start coming online. How much of a bridge is needed to 2030 will ultimately depend on how the market continues to develop, and what level of policy support is available to both producers and airlines alike.”
Success will require economy-wide cooperation
Sustainable aviation fuel is already being produced commercially through a number of approved pathways, with more production routes being developed, studied, certified and put into operation all the time. Yet industrial, financial, investment and policy support is still needed to provide the industrial framework for what remains a fledgling market.
“SAF has a chicken and egg problem,” Margul says. “There is a very limited supply available, which keeps prices high. With high prices, there is suppressed demand or ability from airlines to buy more of it. This in turn sends a signal to the market — to prospective developers of SAF — that they might want to focus their efforts on something else, such as renewable diesel.”
This is very much not the kind of signal that aviation needs to be sending: rather, it needs to use its size and leverage to be a predictable, safe bet for investment. To do so, interventions are needed to reduce friction.
Margul flags three key upstream interventions at the government and industrial policy level that would improve SAF access and availability: subsidies, facilities grants, and feedstock generation programs.
“In practice, we know that direct subsidies for production, blending, or consumption, such as the RFS program, Blenders’ Tax Credit, or California LCFS, are the most effective,” Margul says. “There’s a reason why almost every drop of SAF in the US is loaded into planes in California. While California has a large jet fuel demand, we need to expand to other states.”
Facilities grants and programs for research and development, too, would enable diversification in feedstocks, growth in facility size, and production in more locations — with the latter particularly important for a geographically diversified industrial demand like aviation’s. In essence, an airline like JetBlue needs to be able to access SAF in Bozeman, Montana or Boise, Idaho — let alone Bridgetown, Barbados — as easily as in Boston, Massachusetts.
Moreover, Margul says, “Most SAF today is made through one process, called HEFA, and from feedstocks such as used cooking oil or tallow. There is enough to satisfy today’s demand, but not tomorrow’s. To complement the grant programs for production facilities, we would like to see an expansion of grant programs to support feedstock growth, aggregation, and logistics projects.”
Technology is helping to demonstrate demand for SAF and lower-carbon travel within aviation
The demand pipeline for sustainable aviation fuels is long, and at the other end from the point at which it intersects between supplier and airline is the point at which it intersects between airline and customer. Here, implementing new technology enabling customers — particularly corporations that need to report the emissions linked to their travel — to make lower-carbon decisions is critical.
“We believe that the right digital tools can help send a strong demand signal for SAF, which will in turn help accelerate additional investment and production,” Margul explains. “Today, our corporate customers who participate in the JetBlue Sustainable Travel Partners program can claim Scope 3 greenhouse gas reductions in their accounting.”
This program, introduced in 2022, includes the airline issuing customers SAF certificates, sustainable travel data and other emissions-reducing resources.
“But administering this program is challenging, requiring manual interventions at one or more stages,” Margul says. “In the next year or two, we expect a series of platforms to come online to help facilitate not just the record-keeping and accounting elements, but perhaps the commercial elements as well — creating a more accessible marketplace for our corporate and individual customers alike.”
Indeed, Margul notes, “Similar tools will soon be announced that will also allow our individual customers to join us in showing that the demand for more sustainable air travel options exists.”
Author: John Walton
Published 23rd March 2023
;
