ANALYSIS • SAF DEMAND
C-suite execs in the SAF driving seat
Senior executives are driving demand for SAF because they realise it represents more than simply fuel. Words: Fayaz Hussain
Signature offers SAF at 33 locations worldwide and it recently crossed the 50m mark in terms of blended SAF gallons pumped.
ANALYSIS
C-suite execs in the SAF driving seat
Senior executives are driving demand for SAF because they realise it represents more than simply fuel. Words: Fayaz Hussain
SAF DEMAND
Signature offers SAF at 33 locations worldwide and it recently crossed the 50m mark in terms of blended SAF gallons pumped.
THE PUSH for sustainability comes from the top. When a billion-dollar company wants to decarbonise, the decision is rarely taken by its middle management, it is initiated by C-suite executives as part of the company’s broader ESG (environment, governance and social) strategy.
Something similar is happening in business aviation. More corporates who own and charter private jets are looking to reduce their emissions from flights with operators, setting their own decarbonisation goals. While senior leadership may not make the final purchase decisions, many are coming to see sustainable aviation fuel (SAF) as the major lever to decarbonise their businesses.
“The decision to buy SAF is not at the same level as the decision to buy jet fuel,” says Beatrice Batty, senior director, Environmental and Sustainability Programs at Signature Aviation. “We learned very early that the decision to buy SAF was at a different point of the customer decision-making chain. So, it’s not the line pilot. It’s not a dispatcher. The decision to buy SAF is coming from the C-suite or the sustainability programme within that organisation.”
This hierarchical change in decision making shows how SAF is increasingly seen as more than just fuel. “The decision to buy SAF is about decarbonising and meeting the company’s sustainability goals,” Batty continues. “What you’re getting out of it is a different value proposition. You’re getting a decarbonisation event, not just fuel.”
Signature Aviation operates the world’s largest network of private aviation terminals, touching more business jets globally than any other organisation. This gives them unparalleled insight into the realities of SAF adoption within the business aviation community. It offers SAF at 33 locations worldwide and it recently crossed the 50m mark in terms of blended SAF gallons pumped.
“We, along with many other organisations, have signed on to be net zero by 2050, and to help the aviation industry get to that same goal of decarbonisation,” Batty tells CJI. “And of course, most people who work with SAF understand that the studies have shown that 60% of the way to do that [achieve net zero] is through SAF.”
The company has partnered with multiple suppliers, including Neste and Valero, with offtake agreements with Shell and others in Europe.
“Our goal when it comes to obtaining SAF is to get product that meets the customer need geographically,” Batty notes. “The product our customers are looking for in the EU is different, or might be different, from SAF required in the United States. So, part of our process is to work with suppliers who can bring the appropriate product to market. It must have sustainability information and have been audited whether by ISCC [the International Sustainability and Carbon Certification] or RSB [Roundtable on Sustainable Biomaterials], to make sure the feedstock is appropriate for the geographic region.”
Signature began offering SAF in 2020, blending the green molecules into its Jet A supply chain. By 2023, it had brought 10m SAF gallons to market before tripling it to 30m by 2024.
This trajectory tells a compelling story of SAF adoption in business aviation. However, Batty says this growth comes from a very concentrated base and should not be seen as a widespread adoption in the industry.
“We have a small number of customers that are using a lot of SAF,” she explains. “The bulk of our purchases are coming from few customers committing to a large amount of SAF to decarbonise their own flight department.” Despite all this growth in the past three years, SAF sales still make up only a small percentage in Signature’s total jet fuel sales.
So, what lies behind this lack of adoption? Signature Aviation says it has identified three main barriers. The most important is the cost of SAF. Although, SAF is sold at a premium compared with fossil jet fuel, the actual cost impact is often misjudged, according to the company.
BEATRICE BATTY – SIGNATURE AVIATION
Beatrice is a senior director for environmental and sustainability programmes at Signature Aviation and has 30 plus years of expertise in sustainability, SAF and aviation fuels.
Signature has offtake agreement with refiner Neste who is the leading SAF producer in the world.
“The cost of SAF is not three times the cost of jet fuel in its blended form,” Batty clarifies. “Something to remember is that the regulatory bodies do not allow SAF to be used in an aircraft blended more than 50%. SAF must be blended with fossil jet fuel and recertified as jet fuel. The average blend we’re seeing is somewhere between 30% and 40% globally. When you take that higher cost of the SAF and you blend it with the standard cost of jet fuel, the actual cost comes down. So, it’s not even double the cost of jet fuel today, it’s less than that. But it is still considerably more.”
The other major barrier Signature highlights is the lack of knowledge and understanding about SAF and the concept of book and claim.
“The largest portion of our customers who are considering using SAF or dipping their toe in the water almost always say: ‘I’m making sure it is safe for my aircraft,’” highlights Batty. Or they complain their flight plans include airports where SAF is unavailable or they do not understand the book and claim system.
The third barrier Signature highlights is the lack of availability for SAF. “If they don’t land at an airport that has SAF, they have to understand book and claim as a legitimate option to decarbonise aviation using SAF,” explains Batty.
The situation is compounded by the geographic disparities in adoption which are dictated by regulatory frameworks and SAF availability.
“The higher adoption now is in the United States,” says Batty. “Part of that is there’s more product available in the United States than there has been available in Europe and the UK.”
While fuelling with SAF is purely voluntary in the US, it is mandatory in the EU and UK. Regulatory complexity creates an additional layer of challenge. The Emissions Trading System (ETS) in both EU and UK create a competing sustainability requirement that complicates SAF purchasing decisions for operators in the region.
“By 2023, Signature had brought 10m SAF gallons to market before tripling it to 30m by 2024.”
Signature has partnered with multiple suppliers, including Neste and Valero, with offtake agreements with Shell and others in Europe.
Signature has partnered with multiple suppliers, including Neste and Valero, with offtake agreements with Shell and others in Europe.
“By 2023, Signature had brought 10m SAF gallons to market before tripling it to 30m by 2024.”
“In both the UK and in the EU, they have the ETS obligation for certain operators,” Batty explains. “So, there’s already a process and a cost to reducing the carbon footprint of the aircraft for larger operators. Then, there’s the question: ‘If I already have to pay for my ETS application, SAF is also more expensive, where do I want to put those dollars?’”
Despite all the challenges, business aviation still emerges as a key enabler for SAF demand. Estimates show that the SAF usage in business aviation accounted for as much as 12% of the total SAF consumed worldwide.
“Business aviation accounts for a figure in the double digits of the amount of SAF produced globally, as opposed to less than one percent of jet fuel,” notes Batty. So, the sector is clearly punching above its weight in terms of SAF demand.
This higher adoption of SAF by business aviation is a consequence of how aviation fuel affects different business models. For commercial airlines, the cost of fuel represents a major chunk of their cost of goods sold impacting pricing and competitiveness. On the other hand, for business aviation, the cost is seen as an operating expense for a business tool.
“For an airline, the decision to use SAF has a major impact on your cost of goods sold,” Batty agrees. “For the average flight department in business aviation it’s a cost of operations.”
The opportunity for higher SAF adoption in business aviation is further bolstered by the nature of the customer base it caters to. “Every Fortune 500 company that has a flight department also has sustainability goals, just like Signature Aviation does,” Batty notes. “They’re looking at meeting sustainability goals across multiple different areas of their operation.”
The trend for setting more stringent sustainability goals will only increase, according to Signature. Sharing her insights on what to expect, Batty concedes that for SAF to become more widespread, the path forward requires coordinated efforts.
“There is no silver bullet to this,” she admits. “But, if there was a silver bullet, it would be if the cost of SAF was on parity to the cost of jet fuel. That’s not going to happen anytime soon.” So, to reach these goals, the SAF industry needs investment in production capacity, improved logistics infrastructure and continued education about the benefits and practicalities of SAF adoption.
Although cost, information gaps and lack of widespread availability could continue to slow the adoption of SAF, business aviation’s early leadership shows commitment and willingness to change. The challenge now is for decision makers to learn how to circumvent these challenges and help SAF deliver its full potential as a decarbonisation tool for business aviation.
SAF Survey Audience Votes
Corporate Jet Investor recently surveyed 100 business jet users including owners and corporate travellers to discover their willingness to use SAF.
4AIR aims to make book and claim transparent
Turning SAF challenges into opportunies is the mission of Kennedy Ricci, president of 4AIR and his team.
THE REGULATORY complexity surrounding the use of sustainable aviation fuel (SAF) can seem like a minefield. But for Kennedy Ricci, president of 4AIR it’s not a challenge – it’s an opportunity. Ricci founded 4AIR to make those opportunities available to the business aviation industry.
He positioned the company at the intersection of SAF tracking, regulatory compliance requirements and the complex book and claim mechanism to help business aviation meet its sustainability goals.
“We saw something that was never going to go away,” Ricci says of the regulatory requirements for SAF. “It was going to be a big source of additional fuel volumes on the market and one that was probably going to get more complex,” he tells CJI. Unravelling this complexity for business aviation has become 4AIR’s specialty. The company recently hit a significant milestone of 10m blended gallons tracked through its Assure SAF registry platform.
The book and claim mechanism enables business aviation operators to meet their sustainability commitments beyond the limits of physical SAF availability. It has become a crucial lever for the sector to decarbonise. Under the mechanism, an operator can purchase SAF certificates representing a specific volume of SAF produced and injected into the fuel supply system, even if that fuel is physically consumed by another aircraft at a different location.
The environmental benefits and emission reductions associated with that SAF volume can then be claimed by the certificate purchaser for their sustainability reporting, while ensuring no double counting occurs. SAF availability remains a key barrier to higher SAF adoption, according to Ricci. Operators can only achieve SAF blends of 30-40% through the physical uplift of green molecules. Operators who want to do more have to look to book and claim.
“Book and claim has played a very key role in upping those specific operators’ commitments above what they can get physically,” Ricci notes. “Using Assure as a tool to facilitate that gives them robust knowledge that the fuel went into business aviation, that it came from a certified source and helps them understand what incentives or mandates might have been claimed along the way.”
The company’s tracking and transparency aims to solve key criticisms of the book and claim mechanism – the risk of double counting and concerns regarding fuel’s environmental integrity. 4AIR says its approach to tracking fuel focuses on ensuring a clear chain of custody documents. Ricci highlights: “There are almost 30 data points behind each batch of fuel that you need to have tracked resulting in pages and pages of documentation.”
KENNEDY RICCI, 4AIR
Kennedy Ricci is the president and founder of 4AIR. With a background in business aviation, Ricci launched 4AIR to promote transparency and accessibility in sustainability for aviation.
“...it gives them the robust knowledge that the fuel went into business aviation and that it came from a certified source.”
While transparency is crucial, the regulatory landscape that led to the creation of 4AIR continues to evolve. Different regions around the world have developed specialised rules for SAF incentives, mandates and reporting requirements. “Europe wants to be more aggressive and each state’s [nation is] going to have their own focus,” says Ricci. “Long-term, I think what we see is probably different feedstocks and different pathways getting some specialisation for the regions that they’re in.”
This variety leads to both challenges and opportunities. The SAF production landscape is going to be dictated by feedstock availability. Regions rich in biomass will house biofuel pathways while those with renewable energy potential will see more e-fuels and power-to-liquid production sites. This adds another layer of complexity in the tracking chain of custody and, therefore, integrity. For operators navigating this landscape, a robust tracking mechanism like 4AIR becomes essential, argues Ricci.
4AIR has a diverse client base ranging from large operators delivering on compliance requirements to corporates tracking fuel and FBOs streamlining their accounting processes. “We need to have documentation associated with each gallon of that fuel and appropriately track it through an entire supply chain,” says Ricci.
In addition to business aviation, 4AIR also provides services to commercial aviation. This shows how processes and solutions designed and tested in the more agile business aviation sector can serve as launchpad for scaling them into wider aviation industry. However, Ricci laments the lack of broader adoption of SAF especially as a result of lack of guidance from ESG reporting guidelines with each applying their own approach. But he says this can be changed with standardisation and regulatory acceptance.
“We need some authority standard on how we’re going to account for it under scope i, ii and iii, under GHG Protocols or how to account with SBTi [Science Based Targets initiative] goals,” he says. “That uncertainty of how that will be accepted is where we’re still seeing some hold back from new customers.”
