The aviation industry is targeting Net Zero by 2050 with much of the decarbonisation coming from using sustainable aviation fuel (SAF).
Most SAF comes from used cooking oil and similar products but while waiting for audience members to arrive, stream moderator Steve Townes, Vice Chairman of ACL Airshop, which was sponsoring the Sustainability stream again, shared a video of an interesting British proposal, poo-powered flight (no, really).
The video was a presentation by James Hygate, CEO of Firefly Green Fuels, who studied Zoology at university in the ‘90s and there was a class on climate change, which really concerned him.
After graduating, he did the obvious thing of setting up a mini-refinery in the garage of his parents’ house, converting waste cooking oil into fuel.
He joked this is normal for Stroud, Gloucestershire but maybe not for the rest of the world.
This was around 2002 and attracting a lot of interest, which, 20 years later, has resulted in the company supplying equipment to more than 80 countries and offsetting millions of tons of carbon.
Realising that waste oil from sources such as fish and chip shops was too limited, Hygate realised he needed other feedstock so a fuel was developed from aquaculture waste.
For transport modes such as aviation, fossil fuels are the only practical fuel so a low-carbon alternative is the only practical option.
There are ambitious targets but scaling up production is near-impossible so Hygate looked at sewage, as we all produce plenty of it so there is the feedstock.
Developing a process to utilise this plentiful feedstock called hydrothermal liquefaction, it replicates activity in the earth’s crust which produces crude oil by putting the feedstock in a machine that works like a pressure cooker, breaking it down into a product that can be refined like petroleum.
The first demonstration plant should be opening in the UK soon. A study by Cranfield University found carbon was cut by 92% compared to fossil fuels. Treatment plants are often near airports so transportation would be minimal.
An investment opportunity
Using Danger Zone by Kenny Loggins as his soundtrack to start his presentation, Townes said that by 2050, when 65% of Net Zero will come from SAF, more than 10 billion people will be flying every year, according to industry estimates.
To achieve that, 185,000 Olympic-sized swimming pools worth of SAF will be needed a year, which needs a lot of money so Townes said the capital markets need to get out their chequebooks because this is a big business opportunity.
Some entrepreneurs start working because of personal desires, with Townes highlighting Dr Jennifer Holmgren whose inspiration to start LanzaJet was the love of coffee from her native Colombia and the knowledge that climate change was destroying the coffee crops in the mountains.
Her desire was to save Colombian coffee has resulted in money being raised and the first pilot plant in Louisiana.
Townes admitted that these plants cost well over $100 million but if you can leverage it by 50% with long-term capital like government development bonds, infrastructure and private equity investors, this could be a good investment.
Townes praised other projects such as Firefly, which is scaling up production, and World Energy which three weeks earlier announced it had raised $5 billion to ramp up production.
Consulting universities and engineers, the questions were about feedstock, people, locations and money.
Townes estimates it will require $3-4 trillion to hit the Net Zero target and over 3,000 SAF plants will have to be constructed.
It is time to get started, with Townes telling the audience, “People are getting excited about this, the number one supplier of gasifiers have volunteered to provide a free gasifier for the first plant if they stick a shovel in the ground and gets started. The CEO of that company said it’s time to get started, will this help? It’s a very expensive, multi-million dollar donation just to get started.”
Looking in South Carolina and other southern states, there is potential with Townes highlighting 11 vacant papermills in South Carolina in perfect locations to be repurposed into refineries.
South Carolina and its neighbours have large sources of pine trees and other feedstocks, and they have a large concentration of aviation companies.
Combining the aviation companies, transport links and pipelines, which criss-cross the states, the southeast states are perfectly placed for SAF production, believes Townes.
Using pine trees and other sustainable sources and placing the plants in economically-depressed areas of South Carolina, thousands of jobs can be created and estimates from financial experts who manage multi-billion dollar pension funds estimate that the IRR would be at least 30%, which Townes said was the lowest estimate of three experts.
Asking audience members if they would make a $10,000 investment on a 35 year project which would pay back the initial capital in around three years and was guaranteed to make at least $3,000 a year after that, Townes said yes, saying, “If this gets started in my state, I will write a personal, multi-million dollar cheque to be part of that.”
Destination sustainable
Sustainability – Can We Get There? Was the name of Marie Owens Thomsen’s presentation and is a question many are asking about sustainability commitments.
The Senior Vice President Sustainability & Chief Economist at IATA asked whether this was possible and presented figures to put matters into perspective.
In 2023, CO2 emissions hit a record 37.4 gigatons combined with 59 gigatons of greenhouse gas emissions.
Aviation contributed 0.78 gigatons of CO2, 2% of the total, while the transportation sector as a whole is responsible for 23% of CO2 emissions.
In the transportation sector, aviation contributes to 9.8% of CO2 emissions, behind shipping at 11.1% and 73.8% for road transport, with Owens Thomsen telling the audience that they should look at their car usage.
One of Owens Thomsen's complaints about the sustainability debate is choices are too binary with people thinking it can only be one option or the other, saying that we need to use all the levers available if the industry wants a chance of achieving Net Zero by 2050.
She added that nearer to 2050, perhaps the industry can be more selective depending on technological progress.
SAF will be key to achieving Net Zero and companies such as airlines and forwarders are signing partnerships to use it.
In 2023, 500,000 tons of SAF was produced but this will need to be ramped up by a factor of 1,000 to 500 million tons to cater for expected demand in 2050.
She said there is a misconception that SAF is available, pointing out it represented 0.2% of jet fuel consumption.
Asking whether production can be ramped up, Owens Thomsen said yes it can but it needs money.
The oil and gas industry spends negligible amounts of money on renewables, with figures from the International Energy Agency saying that of the $20 billion invested in 2022, 3% of total spending was on renewables and 1% was total green energy investment.
The figures showed how dividends have surged in recent years, Owens Thomsen said, “It is clear, beyond any kind of doubt, that the traditional oil and gas industry is not interested. They are saying loudly and clearly that they are not interested.”
Refineries produce different kinds of products and aviation represents 8% of refinery output.
In comparison, middle distillates such as diesel represent over 33% so aviation is not that important for the refining industry.
Sharing more figures from the International Energy Agency, Owens Thomsen said the agency estimates the world needs around $400 billion of investment annually into fossil fuels, because we still need them to meet energy needs.
In 2023, the industry invested $800 billion, with Owens Thomsen saying, “There is a huge over-investment and I would dare to call this spare cash floating around. It is not floating around because it is going to the oil and gas industry but if it didn’t, there would be ample cash to finance our energy transition. We just need about $150 billion per year, with 19% we could finance our own energy transition.”
Ending her presentation, Owens Thomsen said it is challenging but can be done. She said, “It might sound daunting getting to Net Zero in 2050 but I think it is doable, the money is out there, we just somehow have to get the investment proposition to look as attractive in renewable energy as it does in fossil fuels.”