By Staff Correspondent
Investments in the manufacture of e-fuels inside the European Economic Area (EEA) still lack ambition, despite the critical role that Sustainable Aviation Fuels (SAF) play in attaining climate-neutral aviation. The two-day conference on April 24 and 25, organised by Bodø Municipality, Energi i Nord (North Energy Cluster), Deutsche Aircraft (a German aircraft OEM), and BLU (Bodø Lufthavnutvikling), aimed at discussing ways to increase the capacity of producing e-fuel with important players in the energy and aviation sectors.
By 2050, the ReFuelEU Aviation legislation wants to see 70% SAF in Europe’s fuel mix, with e-kerosene making up 35% of the total.
Transport & Environment has monitored the growth of the European market for e-kerosene. Fifty e-kerosene initiatives have been found in the EEA so far, with 30 of them being large-scale industrial operations and 20 being smaller experimental projects, according to the most recent count by the NGO.
The purpose of this meeting was to address the commercial challenges in scaling up SAF and e-fuel production capacity, as the necessary capacity is not yet in place to satisfy the blending requirements specified in the RefuelEU legislation. Important public sector, airport, SAF producers, financiers, and airline players attended the events.
“The European e-kerosene market is showing signs of growth, but it’s worth mentioning that no major projects have made it to final investment decisions (FID) just yet, and a lot of projects are still in the feasibility study phase,” noted Marte van der Graaf, Aviation Policy Officer at Transport & Environment.
“According to Jan-Hendrik Petersen, Managing Director of 360 Asset Finance, a basic, rough estimate indicates that by 2050, aircraft would require about 350 billion liters of SAF if the 70% SAF ReFuelEU blending requirement is applied to the world’s diesel fuel consumption. About 2,800 factories with a combined annual capacity of 100,000 metric tonnes are involved in this process. As things stand, we’d need to construct 110 plants a year, each costing around USD 1 billion.
According to Bent-Joacim Bentzen, Deputy Minister for Transportation in Norway, “Air transport is central to national and international connectivity and the transition to more environmentally friendly aviation, including increased use of SAF, is not only desirable but necessary to contribute to national and international climate goals.” A similar sentiment was expressed by Bentzen. To ease this change, a joint forum has been set up by the Norwegian Ministry of Transport, Avinor, the Civil Aviation Authority, the trade union (LO), and the association representing enterprises (NHO). In addition, the National Transport Plan 2025–2036 has allocated 1 billion NOK to emphasize the development of environmentally friendly aircraft practices. Important as well is the blending requirement for SAF, in which Norway has been a pioneer. It is obvious that this is only the beginning of a difficult path for us. But we still think Northern Norway may be a game-changer when it comes to decarbonizing aviation through its maturing e-fuel generation.
The discourse centered on the imperative for increased accessibility to SAF financing. Investors continue to be uninterested in risk-return profiles due to their perceived complexity and inadequate risk mitigation tools. This assertion is particularly valid in the case of e-kerosene, a substance that provides substantial greenhouse gas emission reductions and scalability, but presents greater risks for investors on account of its delayed maturation relative to alternative SAF pathways.
“We need to get real with ourselves and realize that we aren’t going to be able to scale Sustainable Aviation Fuels in time to get society to approve of aviation,” said Ulrike Ziegler, Impact on Sustainable Aviation’s president of the board. “At the conference, we spoke about the main challenges, such as the uncertain and complicated legislative environment, the lack of concrete long-term offtake agreements, and the need of having sufficient risk mitigation and funding tools to back innovative e-fuel initiatives. The industry must increase passenger education to gain their support, in addition to ensuring that relevant supply chain players, including lawmakers, work together to create risk mitigation strategies.
Several SAF manufacturers also displayed potential e-fuel initiatives during the conference. One of these was Norsk e-Fuel, which is constructing a 50 million-liter facility in Mosjøen and plans to start full-scale production after 2026.
“The early involvement of value-chain partners and local stakeholders is crucial for the success of e-fuel projects,” noted Ida Larsen, Head of R&D at Norsk e-Fuel. “The offtake agreement with Norwegian Air Shuttle and their investment in our company is a clear indication of our progress in advancing the project.”
Northern Norway, according to Regina Pouzolz, Director of Sustainability at Deutsche Aircraft, “could see considerably higher blend ratios, making the region an ideal place for pioneering near-climate-neutral regional aviation,” despite the fact that SAF will be in short supply worldwide for some time. “If you are interested in learning how our dynamic and productive partnership is changing regional aviation, we invite you to the ILA Future Lab at ILA Berlin on 5 June 2024.”
