What are Sustainable Aviation Fuels (SAFs)?
These are alternative fuels that can be blended with kerosene to potentially reduce the life cycle emissions of jet fuel. Broadly speaking, SAFs can be categorised into one of two groups, which are fuels of a biological origin (or biofuels), and fuels of a non-biological origin (commonly referred to as e-fuels, synthetic or power-to-liquid fuels).
The role of airlines
One way in which airlines can support the early scale up of high integrity SAF supply such as e-fuels by using floating market indexed pricing mechanisms and the ‘book-and-claim’ system to support voluntary uplifts. Book-and-claim facilitates the purchasing of SAF by decoupling the physical fuel location and the environmental benefit, to facilitate and promote more efficient use of SAF volumes and their GHG emission reductions.
Airlines can also enter into offtake agreements to enable projects to raise equity and access debt funding, so developers can quickly scale. Memorandum of Understandings (MoUs) are another avenue and indications of interest, though they are less valuable for developers.
There are a number of alliances in place to support this, explore these alliances in the report below.
Charting a greener course: The role of SAFs in the net-zero transition
Interested in the key differences between the various kinds of SAFs and how their unique production processed influence the integrity of these fuels? Check out this value packed infographic linked below. We’ve also summarised a few key insights for investors involved in this space.
Insights for investors
To particularly accelerate and facilitate increased uptake of high integrity SAFs, and deter the use of low integrity SAFs, investors are invited to consider the following insights, alongside promoting other decarbonisation strategies for the air transport sector
- Investors and the aviation industry can clarify and differentiate between the several types of SAFs in the fuel transition that they invest in, to better clarify the trajectory of various alternative fuels categorised as ‘SAFs’.
- Institutional investors can consider opportunities to support e-fuels expansion as one pathway to transition aviation fuels to a net-zero trajectory.
- In their corporate engagement processes, investors can ask portfolio companies to increase disclosure on how they intend to decarbonise aviation, such as clarifying the types of feedstocks and production pathways they are using, or plan to use.
- Investors can contribute to policy developments and emerging regulations on the fuels transition.
- Investors can consider the just, equitable and environmental implications of the aviation sectors’ fuel transition in relation to long term decarbonisation.
- As well as the fuel transition, it is important for investors to engage with other decarbonisation levers involved in the long term pathway to move the aviation sector to net-zero.
Explore the complete report
This new SAF explainer, created in collaboration with PRI, sheds light on the various types of alternative aviation fuels and how they differ in terms of both production and emissions. We’ve also included key insights for investors engaging companies on these emerging fuels and new technologies in the space.
