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Bangkok Post
Bangkok Post
Business

Airlines set the stage for green jet fuel

Aircraft operated by Thai Airways International on the tarmac at Suvarnabhumi airport. The flag carrier wants sustainable aviation fuel to make up 5% of its overall fuel consumption by 2030. 

The International Air Transport Association (IATA) recommends public financing and diversifying production sources for sustainable aviation fuel (SAF) as strategies to achieve net zero emissions by 2050.

Thai carriers are hopeful regarding government support for the production of SAF.

Marie Owens Thomsen, senior vice-president for sustainability and chief economist at IATA, said the current production level of SAF is minuscule compared with global aviation demand.

IATA estimates that SAF could contribute up to 62% of the carbon emission reductions targeted by the aviation industry by 2050.

However, the production rate in 2022 remained limited at only 240 billion tonnes per year, or 0.1% of the jet fuel produced worldwide, which means the industry has to scale up production if it wants to pursue this goal, she said.

At present, the price of SAF is three times higher than jet fuel.

Ms Owens Thomsen said the industry requires at least US$5 trillion, or $180 billion per year, for the transition over the next 28 years.

This budget is quite similar to investments in solar and wind energy, and one-third of the amount spent on fossil fuel-based projects, she said.

The challenge is to encourage policymakers to initiate investment through public financing projects to mitigate risks during the early stages for private investors who would like to follow, said Ms Owens Thomsen.

In later stages, the private sector should lead the production, comprising roughly two-thirds of output.

IATA also called for diversifying SAF production pathways across every region.

In the next five years, more than 85% of SAF will likely be produced from hydrotreated esters and fatty acids (HEFA), which is the least scalable source to meet net zero demand. It is also highly dependent on limited feedstock availability, said Hemant Mistry, director for energy transition at IATA.

Other options include the alcohol-to-jet process and the Fischer-Tropsch process, made from the third generation of feedstocks, such as food waste and municipal solid waste.

These two options have more availability globally and are more scalable than the second generation of feedstocks such as waste fats, oils and greases used in the production of HEFA, he said.

More than 130 projects involving 85 producers across 30 countries have been announced to produce an estimated capacity of 55 million tonnes of renewable energy, including SAF and sustainable fuels such as renewable diesel.

If these projects are funded, the production base will be more diverse than it is now, with new development in every region, including South America and the Middle East, according to IATA.

At present, Singapore's Neste is the sole manufacturer in Asia capable of producing 1 million tonnes of SAF annually.

In five years, more projects are expected in Asia-Pacific, including in China, Japan and Thailand, said the trade association.

BSGF, a joint venture between Bangchak Corporation, BBGI (the biotechnology arm of Bangchak) and Thanachok Oil Light, hopes to produce a million litres of SAF per day from the fourth quarter of 2024.

Chai Eamsiri, chief executive of Thai Airways International, said the airline aims to use SAF for 5% of its overall fuel consumption by 2030.

In addition to its cooperation with Bangchak, Thai Airways is partnering with PTT Global Chemical on SAF studies and development.

Mr Chai said the Thai government or an organisation such as the Civil Aviation Authority of Thailand, the country's aviation regulator, should be responsible for setting sustainability and SAF targets for the whole industry, studying the production capabilities of fuel providers and demand from airlines. Carriers should not be solely responsible for trying to achieve carbon reduction goals, he said.

For example, by requiring all Thai carriers to have SAF account for 5% of their fuel consumption by 2030 would allow the needed amount of renewable fuel to be calculated, enabling development of sufficient feedstock resources and capabilities in terms of refinery facilities, said Mr Chai.

He also recommended a policy that requires all airlines to use an equal amount of SAF, as it is more costly than jet fuel.

This policy would prevent a competitive disadvantage where only one airline is committed to accessing SAF, said Mr Chai.

Puttipong Prasarttong-Osoth, president of Bangkok Airways, said the airline has begun to hold discussions with Thai Oil on the development of SAF.

He said the government should incentivise production to create more available supplies, which could help to reduce the cost of producing SAF.

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