Huge increase in green fuel refineries needed in Europe to enable airlines to meet targets

Number of refineries in the EU will have to increase from a handful to 150 to meet demand, expert says

A line of British Airways planes at London City Airport. PA

A huge rise in the production of sustainable aviation fuel will be needed in the coming years to enable European and American airlines meet their ambitious climate targets, experts have said.

Leading industry voices from both sides of the Atlantic told London Climate Action Week that the rate of SAF production at present looks set to leave airlines scrambling for green fuels on the road to net zero.

Scaling up the rate at which SAF is produced is a multifaceted challenge facing the sector, said Maxime Molenaar, head of sales at Sky Energy.

The company, based in Amsterdam, works with airports, airlines, corporate customers and leisure travellers to bring more fossil fuel alternatives into the system.

Ms Molenaar made her comments during a session entitled “Scaling Sustainable Aviation – the Rapid Transformation Required to Decarbonise Air Travel and Transport and the Critical Role that SAF has to Play”.

“Today, less than 1 per cent of jet fuel [used around the world] is sustainable aviation fuel,” she told the audience at a panel discussion.

“By the end of next year, we will have a handful of SAF refineries in the EU … we expect that we’re going to see a demand of 40 million tonnes in 2050.

“Just to give you an idea, we would need about 150 additional refineries to get there which equates to around €250 billion in investment.

“So it’s not even doubling. It’s going from a handful to 150 additional refineries.”

The projected demand for SAF in Europe coupled with that of the US means the industry is facing a “very big challenge”, she added.

Carrie Harris, director of sustainability at British Airways, said the company has been looking into SAF for more than 15 years.

In March 2022, the international airline became the first in the world to use sustainable jet fuel produced on a commercial scale in the UK.

BA has committed to ensuring that 10 per cent of the fuel in its planes will be sustainable by 2030, Ms Harris said.

Today, SAF accounts for less than 1 per cent of the airline’s total fuel use, which Ms Harris said represents a “great start”.

She noted aviation’s “incredible challenge with climate change” but said that while people are more conscious of their carbon footprint and may choose to fly less frequently, air travel will continue to have a role in society.

“Our role, our focus is to try to decarbonise as fast as possible,” she said.

Ms Harris said SAF is a “crucial part” of BA’s road to achieving net zero and “potentially up to 60 per cent of our pathway to net zero” could come from eco-friendly fuels.

“The good thing is, it’s proven technology,” she continued. “When we started talking about this 15 years ago, it was theoretical. Now, it’s already in our supply chain.

“So we’re really excited to have been the first, and only airline currently, who is taking direct supply of UK-produced sustainable aviation fuel that’s made up in Humberside from processed and waste cooking oil. That comes through the pipeline into Heathrow operations.”

Earlier this year, the chief executive of BA's parent company said the UK is falling behind Europe and the US in developing eco-friendly aviation fuels because of government inaction.

British Airways through the years – in pictures

Brett Orlando, managing director of Bank of America, said there have been a “long list of carrots” dangled before the aviation industry when it comes to investment in SAF in the US.

He listed biofuel tax credits and federal Renewable Fuel Standard programme as examples. The programme created by the US Congress aims to reduce greenhouse gas emissions and expand the country’s renewable fuels sector while scaling back reliance on imported oil.

The incentives, he said, have been well received and add value to the production of each gallon of SAF. When added together, “they come very close to parity with conventional jet fuel” in terms of pricing, he said.

“That is what is incentivising a lot of the build out of production capacity in the US,” he said.

Mr Orlando said Europe was showing signs of adopting a more incentive-focused approach to SAF production.

“I think the EU is starting to take a page from the US book,” he said.

“They’ve now just recently announced that they’ve put about €2 billion aside on a first come, first serve basis offered out to airlines to help them basically pay the premium for that SAF. In the EU, it’s a combination of a lot of stick but some carrot now coming up.”

The EU in April agreed on a deal to set binding targets for airlines on the continent to ramp up their use of SAF in a bid to kick-start a market for green fuels and bring down the aviation sector’s carbon footprint.

Airlines will receive about €2 billion in funding from the EU carbon market to help them make the transition from fossil fuels to SAF.