Key Takeaways
The head of Australia’s Qantas Airlines said flying may become so expensive because of net-zero policies, such as the use of sustainable aviation fuel (SAF), that it may become a luxury that only the privileged few can access.
SAF is 3 to 5 times more expensive than jet fuel, which is the most expensive component of flying.
Europe and the UK are ratcheting up requirements for using SAF.
Europe’s Airbus is designing aircraft with features, such as extra-long wings that fold to fit in existing airport gates, to maximize the efficiency of SAF.
The CEO of Qantas Airlines, Vanessa Hudson, said that flying may become so expensive that it would only be available for the privileged under a “net zero” policy requiring sustainable aviation fuel (SAF). SAF’s higher “clean fuel” costs threaten to put airfares out of reach of the masses. SAF costs three to five times as much as kerosene and is currently the only realistic path to achieving the aviation industry’s net-zero carbon emissions target by 2050. Fuel is the costliest input in air transportation operations. SAF is most commonly produced from cooking oil obtained in Asia.
Britain has issued a mandate for carriers to use at least 10% SAF by 2030 —one of the most stringent requirements in the world. The EU target is lower — 6% SAF by 2030. Airbus is planning to fly its future planes on SAF, adding an expensive “green premium” to air fares. Last year, SAF made up less than 1% of industry-wide fuel consumption due to its high price and low production. SAF is estimated to reduce life-cycle carbon dioxide emissions by around 80% compared with traditional jet fuel.
UK Requirement
The UK SAF mandate sets targets for aviation fuel suppliers to provide increasing amounts of SAF from 2025 to 2040. In 2025, 2% of the jet fuel supplied in the UK must be SAF, increasing linearly to 10% in 2030 and 22% in 2040. The UK government has a price guarantee mechanism to help increase SAF production and encourage the development of a large-scale refinery in the UK.
The mandate is being enforced by a tradable certificate plan for aviation fuel suppliers. Suppliers receive a certificate proportional to the amount of greenhouse gas emissions reduction they achieved in the previous year, which can be used to meet the mandate. Excess certificates can be sold to other suppliers who may need additional certificates. The mandate program also contains a buy-out mechanism that allows suppliers to discharge their obligations if they cannot secure a supply of SAF by imports or domestic production. The program also sets a maximum price for the certificates to prevent excessive costs from being passed on to consumers.
The UK currently has only one SAF production facility, owned by Phillips 66. It is located in Yorkshire and co-processes waste oils. The refinery is expected to produce approximately 50 million liters of SAF this year. Eight more SAF production facilities have been announced. However, experts have expressed doubts about whether production can be scaled up quickly enough to meet the UK’s aggressive schedule.
Airbus Plans
By the end of 2025, all Airbus customers can receive their aircraft with SAF anywhere, free of charge. In 2024, 75% of the 766 Airbus aircraft deliveries used a SAF fuel blend. Recently, Airbus has been increasing the percentage of SAF used in its internal operations to 16%, including in business travel, delivery flights, and transportation of aircraft parts between different production sites. Airbus has signed agreements with SAF providers like TotalEnergies, who have been providing SAF for aircraft deliveries in Toulouse since 2016. TotalEnergies supplies more than half of the SAF that Airbus needs in Europe.
Airbus also recently unveiled a blueprint for a new generation of narrow-body planes capable of running off 100% SAF. Current plans for the aircraft, to be introduced after 2035, feature composite wings that are much longer and narrower than existing models. The supersized wings create more lift, reduce drag, and lower fuel burn. Their increased length means that the wings will need to fold in order to use existing airport gates. Airbus also confirmed that it had shelved studies for a jet engine-powered plane that would burn hydrogen instead of kerosene.
Conclusion
Europe is moving along with its net-zero plans for 2050, including its targets for sustainable aviation fuel. SAF is three to five times more expensive than jet fuel and could make flying so expensive that only a privileged few will be able to fly in the future unless technology and demand can produce SAF to be competitive with current aviation fuels. Airbus is changing the design of its planes to make them more aerodynamic and able to use 100% SAF more economically. The design will be introduced after 2035. Airbus currently uses 16% SAF for its internal operations and delivers Airbus planes with an SAF blend to 75% of its customers. The UK currently requires 2% SAF in its jet fuel and mandates 10% by 2030. The EU’s requirement by 2030 is less than 6%. Europe continues to layer costs upon its citizenry to comply with the UN’s Paris Accords, even when it means pricing much of its population out of the convenience of modern transportation.
