Supercharging sustainable aviation fuels for net zero

Decarbonising the aviation industry will play a significant role in helping global economies achieve their net-zero goals. The global aviation sector currently accounts for 2% of carbon emissions, but that figure is set to grow considerably over the next decade. Sustainable aviation fuels (SAFs), which can lower emissions significantly because they are derived from sustainable resources, are widely recognised as one of the main levers to reduce the sector’s emissions.

Some 325 million tons of SAF will be needed to reach net zero by 2050. That compares with production of only 240,000 tonnes in 2022, according to the IATA. The capacity to produce SAF is inadequate to meet the expected growth in demand or fulfil future regulatory targets for carbon emissions. It will take an estimated €1 trillion in capital expenditure simply to build new SAF refineries—a huge task for an industry currently stuck in a cycle of uncertainty and inertia.

How, then, can the aviation industry jump-start the investment, innovation and infrastructure required to meet SAF’s clear potential? In PwC Strategy&’s new report From feedstock to flight, we seek out the insights of industry representatives as well as two major SAF producers, Neste and Spark e-Fuels, to identify the current roadblocks and the solutions that will help overcome them.

The report puts forward five specific and immediate actions that the aviation industry can take to help accelerate SAF adoption and overcome the roadblocks.

Invest and prove that SAF production can be scaled along the entire value chain to the required commercial levels—up to five times the capacity of current facilities. Establishing additional demonstration facilities for all required steps along the value chain will be crucial to jump-start this process. Beyond demonstration facilities for SAF refining, these efforts should also include facilities for carbon capture technologies.

Diversify feedstock sourcing to ensure a more sustainable supply. This will require public–private partnerships and dialogue around international sustainability standards, even if the initial output is just guidance on which standards to apply to give investors and producers security.

Hedge through strategic collaborations, regulations, support schemes and long-term offtake agreements with companies that are willing to buy fixed quantities at fixed prices over a fixed period of time. Doing so will reduce the payback uncertainty for the initial high investment.

Clarify global regulations by aligning on clear goals so that airlines, investors and fuel producers know where and how quickly they need to invest. There needs to be a coordinated international approach—to both mandating and regulating SAF. Only quotas that are global (or as close to global as possible) can prevent the relocation of CO2 emissions to non-regulated regions.

Educate corporate customers about the benefits of SAF through comprehensive campaigns, cross-sector collaborations and partnerships. It will also be necessary to develop marketing, advertising and public relations campaigns—all of which can enhance the reputation of SAF outside the industry.

No single stakeholder group can overcome these roadblocks acting alone. Progress will require a concerted industry effort by all stakeholders—established and nascent, private and public. This will allow producers of SAF to realise healthy profits when they enter the market and new business models to evolve. That effort needs to start now to ensure the opportunity to scale and establish SAF as a viable low-carbon alternative isn’t lost.