By: Patrick Edmond - Chief Commercial Officer,
So you want to change the world. You’re a startup Sustainable Aviation Fuel producer, You want to cut aviation emissions by making fuel from waste, or from crop byproducts, or from electricity and CO2. It’s interesting to note that most SAF is not being produced by the big oil companies, it’s being produced by new startups and challengers.
So as a new producer, of course you need to find customers: offtakers as they’re often called, like airlines or airport fuel suppliers.
But it’s not as simple as just shipping tankerloads of your SAF to the airline. Regular fossil jet fuel also contains some chemical impurities, molecules which are confusingly called aromatics even though in this case the name is nothing to do with their smell. These aromatics play an important role in aircraft engines, helping to maintain the seals between pipes.
SAF doesn’t contain these aromatics, which is why most aircraft engines can’t use 100% SAF: over time, without aromatics the engine seals would degrade. So the solution is that SAF is blended with regular fossil jet fuel. Technically, most SAF can be blended up to 50/50, but in practice the blend is usually lower, often much lower. For example, in the European Union at the moment there’s a Blending Mandate which specifies a 2% blend of SAF.
But irrespective of the percentage, this means that if you’re a SAF producer you can’t just pump your fuel directly into an aircraft’s tank, you have to get it blended. And the problem is that until now, pretty much all of the tanks and pumps and infrastructure needed to blend aviation fuel have been owned by legacy fuel suppliers and big oil companies, who aren’t particularly motivated to help new entrants, or who see an opportunity to make money from their stranglehold over the infrastructure.
So it’s encouraging to see some recent moves towards opening up access to SAF blending infrastructure, with new facilities announced in the UK, the US, and Australia. And there’s also innovative technology being developed to make smaller-scale blending possible.
If you’re a SAF producer, you’d like to reach global markets for your product. But if that means having to ship your fuel halfway round the world and paying high blending costs at the destination, it’s not so attractive. That’s a problem that the Book and Claim system can solve.
You’re producing two products which both have value: the physical fuel, that makes aircraft engines run, but also the verified emissions savings against fossil fuel on a lifecycle basis, and airlines and corporates are willing to pay for those savings.
Under Book and Claim, you can sell those two products separately to maximise your revenue: you get your fuel blended and loaded into planes locally, and meanwhile you sell the emissions savings (the so-called Scope 1 and Scope 3 Environmental Attributes) through a robust global accounting system that allocates each attribute to one buyer and retires it once, so it’s counted once, to customers who can be on the other side of the world. After all, it’s all one atmosphere: as long as the SAF is replacing fossil fuel, it doesn’t matter where in the world it’s used.
To reduce aviation emissions through increased SAF use, we need to focus more on the ways that that SAF and its emissions savings can actually get to the market. We have to make the whole supply chain work. That means giving SAF producers better access to blending, and it also means making more use of Book and Claim.
Ultimately, that’s how we’re going to change the world.
Originally published on LinkedIn
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