- On the current trajectory, sustainable fuels will only supply a small percentage of aviation and shipping needs.
- Favorable government policies are needed to increase the production and adoption of sustainable fuels in both sectors.
- Stronger and more streamlined regulatory frameworks should also be put in place.
The international and country-level responses to three key underlying issues will primarily determine the future pace of SAF and SMF (sustainable marine fuels) adoption, says an article published in World Economic Forum.
GHG emissions reduction
Six years after COP21 and with recent lockdowns across many parts of the world putting brakes on anthropogenic activities, efforts towards reducing greenhouse gas emissions to secure the future of the planet have moved beyond country-level actions based on their National Determined Contributions (NDCs) to two key sectors: aviation and shipping.
These were excluded from the original ambit of the COP21 mandates because of their international nature.
Carbon fuel replacement
In both sectors, the imperative is carbon fuel replacement, either by non-carbon or lower-carbon alternatives; if neither of those is attainable immediately at desired levels of performance, scale and cost, then at least by local-carbon alternatives that minimize the emissions of moving large volumes of fuels from the point of production to the point of use.
Overlaying effective sustainability criteria on emerging and future fuels, and minimizing additional capital outlays by leveraging existing infrastructure, are equally important.
Sustainable aviation fuel (SAF)
In 2019, the International Civil Aviation Organization reported that commercial production of sustainable aviation fuel (SAF) reached an average of 6.45 million liters per year (2016-2018), and estimated that up to 6.5 million metric tons (8 billion liters) per year of SAF production capacity may be available by 2032.
Comparing these numbers with the wider global aviation fuel market, estimated at 215 million tons in 2020 and projected to reach about 400 million tons by 2026, we see that even a decade from now the penetration of SAF will still be in single-digit percentages if things continue at the current pace. There is thus an urgent need to accelerate SAF adoption, as well as production.
Increases GHG Life cycle
Similarly, with the implementation of IMO 2020 standards for marine fuels – which pushed down the sulfur content of heavy fuel oil (bunker fuel) for ships to less than a seventh of the norm previously – there are positive steps towards climate mitigation in this sector. However, low-sulfur marine fuels are not necessarily low-carbon fuels; in fact, the deep desulphurization required in petroleum refineries to deliver IMO-compliant fuel marginally increases the life-cycle greenhouse gas (GHG) emissions of shipping in the short term.
The international and country-level responses to three key underlying issues will primarily determine the future pace of SAF and SMF (sustainable marine fuels) adoption:
1. Economics
The sheer economies of scale of existing petroleum refineries and crude oil global trade as compared to biorefineries and bio-feedstock global trade put emerging fuels at a disadvantage from both capital efficiency and input-cost standpoints. To level this playing field, non-crude renewable carbon feedstocks need policy support. That will enable robust, abundant supply chains and bring down the costs of SAF and SMF in the medium term.
2. Defining sustainable fuel
Unambiguous, widely accepted definitions of sustainability are equally important. One can argue that fossil-based aviation and marine fuels themselves have varying levels of real life-cycle greenhouse gas emissions, depending on which crude oils are used, exactly how these are processed and over how many miles the raw materials and products of these supply chains are moved, and by what means of transport. There is merit in exploring ways to reduce these elements of net emissions, too, as fossil fuels will remain the majority component of aviation and marine fuels for the foreseeable future.
3. Regulation
Agile national yet globally collaborative regulatory frameworks are the final, critical component. Convergence towards a common understanding of sustainability parameters and the cost of carbon emissions is long overdue.
Excellent recent development in this direction is CORSIA Eligible Fuels (CEF)’s categorization, which lays out clearly the boundary conditions for alternate aviation fuels that can participate in the aviation carbon marketplace. Waste-based feedstocks – such as waste plastics or industrially emitted gases like carbon monoxide – that might not be renewable but can be recycled to reduce the need for greater fossil fuel extraction and processing must be brought into the pool of acceptable alternate fuels.
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Source: Weforum
