Types of sustainable aviation fuels

Sustainable aviation fuels (SAFs) are alternative fuels that can be blended with kerosene to reduce the life cycle emissions of jet fuel. SAFs are divided into biofuels and e-fuels, each with varying degrees of sustainability. Biofuels are derived from biological sources like crops or waste, while e-fuels are produced using renewable electricity and carbon capture. The compatibility of SAFs with current aircraft makes them a viable immediate solution to reduce aviation’s environmental impact.

Emissions from SAFs

SAFs emit CO₂ at point of use, necessitating a life cycle analysis to understand their overall climate impact. The reduction in greenhouse gas emissions depends on the feedstock and production pathway, with potential reductions ranging from 27% to 98%. SAFs can significantly reduce particulate matter emissions, benefiting air quality. The ICAO has established a methodology to assess the life cycle emissions of SAFs, providing over 80 values for different feedstocks.

The role of airlines

Airlines play a crucial role in adopting SAFs to achieve net-zero emissions. Many airlines have committed to using SAFs, with agreements covering billions of litres by 2030. Airlines can support SAF scale-up by entering offtake agreements, using book-and-claim systems, and participating in alliances like SABA and IATA. These efforts help secure funding for SAF projects and ensure a competitive, sustainable aviation market.

International fuel initiatives

Several international initiatives aim to harmonise regulations for SAF adoption. ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the Global Framework for Sustainable Aviation Fuels are key measures promoting SAF development and deployment. These initiatives provide clarity and consistency for stakeholders, driving global action towards sustainable aviation.

Insights for investors engaging on high integrity fuel uptake

Investors can accelerate the transition to high-integrity SAFs by clarifying the types of SAFs they support and prioritising sustainable options. Investment in e-fuels, green hydrogen, and renewable energy infrastructure is essential. Investors should encourage portfolio companies to disclose their decarbonisation plans, including SAF feedstocks and pathways. Active participation in policy development and advocacy for robust standards will ensure a just transition and long-term sustainability in aviation.

Recommendations

Investors should focus on SAFs that genuinely reduce emissions, supporting scalable, high-integrity options like e-fuels. They should fund early-stage projects, research and development, and engage with companies to enhance transparency. By contributing to policy and regulatory frameworks, investors can influence the aviation sector’s shift to net-zero. Emphasising environmental and social considerations will ensure the aviation fuel transition aligns with broader sustainability goals.

This structured summary integrates key quantitative and qualitative evidence from the report, providing actionable recommendations for finance professionals to support sustainable aviation fuels.