July 25, 2024

Q&A: Scaling up SAF

As Aon is confirmed as the pilot customer for a new SAF initiative from American Express GBT, Shell and Accenture, we check in with GBT’s Vice President Global Sustainability, Nora Lovell Marchant

Despite being widely regarded as one of the key solutions to decarbonising air travel, why is SAF still only responsible for approximately 0.1% of jet fuel? 

Until now, SAF development has been slow due to a combination of several closely interconnected factors – the high cost of production, low demand, low supply and the high price – but we are entering a new stage of breakthrough innovations for SAF. Although it is still more expensive compared to conventional jet fuel, research suggests that market parity of SAF can be reached in the early 2030s if you can factor in rising carbon taxes, new governmental subsidies, and decreasing production costs from scaling up the technology. If all these things come together, SAF will be a viable and powerful solution, but this relies on many parties playing their part. 

So, what exactly do we need to happen to ensure SAF can make a difference? 

We need long-term, stable government policy to support SAF development and continued investment in research and development to improve efficiency and find new, more commercially viable ways to produce SAF. We need the supply chain to scale up production and airlines and corporates to commit to buying SAF. No single party can solve this problem alone – not an airline, or an alliance, or a fuel producer. Decarbonisation of the aviation sector requires full value chain collaboration amongst fuel producers, suppliers, airlines, and, of course, our corporate customers to drive demand. This collaborative approach was one of the drivers behind our involvement in Avelia and our alliance with Shell, Accenture and EWF. This pilot with our partners serves as the quintessential example of value chain collaboration and sees companies at opposite ends of the spectrum coming together for an innovative industry solution. 

What role can the corporate travel sector play? 

With millions of trips taking place every year, the business travel sector is an influential part of the aviation value chain and is interlinked in the sector’s efforts to reduce emissions. It has the collective scale and commercial influence to encourage investment into the production and supply of sustainable fuels and technologies needed to reduce emissions from flight. Scaling the widespread adoption of SAF will take decades but the urgency of climate change means we all need to invest in SAF immediately to accelerate progress. Corporates can also play a significant role in lobbying governments and policy makers for change. In our view, the greatest opportunity for scaling SAF is public-private partnership. 

How will Avelia help to scale up SAF? 

Avelia brings technology and digital capabilities to the aviation industry. It complements existing airline SAF programmes, giving them access to additional SAF supply and corporate demand that they may not be able to access directly. It also gives airlines and corporates the possibility to come together more efficiently to share the SAF premium. Airlines will gain access to a large new customer base willing to share SAF’s on-going price premium, drawing on our 19,000 customers from 140 countries, including thousands of SMEs. Meanwhile, corporates looking to reduce emissions from their business travel will have improved access to SAF.  

Among fears about green-washing, how can corporates be confident about the credibility of a platform like Avelia? 

One of the key differentiators of this solution is the use of blockchain technology, which allows secure allocation of environmental attributes to corporations and airlines where SAF has been delivered into the fuel network. It is hosted on a public blockchain system, where the code is available for any third party to review, ensuring transparency and trustworthiness of the dataset. This data security and credibility is key to reaching consensus that SAF book and claim is a valid mechanism for decarbonising the aviation industry, preventing double-counting. 

This is vital as an industry-accepted carbon accounting mechanism is required to ensure demand for a co-investment model grows sufficiently to structurally scale up SAF supply. This will in turn attract others that want to continue sharing the benefits and costs of SAF over the long-term to create more affordable solutions to tackle emissions from flight. 

There’s been a lot of talk about collaboration, but is that realistic? Won’t there always be an element of competition, with everyone wanting to be the first and to do it their way?

Collaboration is essential or SAF simply won’t happen and the chicken-egg dilemma with prohibitively high costs preventing both supply and demand from ramping will continue.  With fuel as a quarter or more of airline operating costs, airlines cannot presently afford to pay up to 10 times more for SAF.  Therefore, the entire aviation value chain must come together to share in the green premium and spread the cost of SAF. We hope that all industry actors join our pilot because we believe it is the most attractive and compelling (or we would not have embarked upon this journey) but the market for SAF is so small and so nascent, really in a pre-commercial state, so we welcome alternative and innovative business models, especially if competition results in lower cost SAF, because that is ultimately the goal for the industry.

If it’s all about collaboration and everyone pulling together, will Shell and Accenture be working with other TMCs to develop similar schemes or work directly with corporates? Or is Avelia exclusively with GBT? 

It’s an extremely supply constrained market so at the outset Amex GBT clients will have preferential access to SAF. But the goal of Avelia is to become an industry solution and we would welcome all corporates and even other TMCs to join in scaling SAF.

You have one client for the pilot but are your other clients showing interest? How easy do you think it will be to persuade them?

We cannot predict or overpromise but we are fairly confident the pilot will be oversubscribed, given that SAF is limited in supply and the attractiveness of our model. GBT has 19,000 customers globally and a robust pipeline of clients interested in SAF, ranging from SMEs to global multinational corporations operating in every corner of the world in every industry vertical including without limitation: the big four consulting firms, bulge bracket banks, top tier law firms, asset managers and investment funds, bio pharmaceutical companies, telecommunications providers, silicon valley technology giants, manufacturing companies – and of course airlines. Names will be publicly announced upon official signature of relevant contracts, as we cannot prematurely disclosure such information. To date, we can confirm that Shell Corporate Travel, Accenture, and Amex GBT are the platform’s first customers, with engagement from Microsoft, and Aon has just been announced this week.  


For more on SAF, see our beginner’s guide