By Ron Bousso

LONDON (Reuters) – Royal Dutch Shell (LON:) plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world’s airlines to reduce greenhouse gas emissions.

Due to lack of alternatives to jet-powered engines, the aviation sector is one of most challenging to address.

Shell, the largest international oil trader, stated that it plans to produce two million tonnes sustainable aviation fuel (SAF), by 2025. This is a tenfold increase on today’s global total output.

SAF, which is made up of waste cooking oils, plant fats and animal fats could help reduce aviation’s emissions by as much as 80%, Shell claimed.

Shell currently supplies SAF from Neste (Finnish refiner), but it stated Monday that green jet fuel can be mixed with regular aviation fuel without the need for changing plane engines. Shell hopes to sell 10% of global aviation fuel by 2030.

SAF is less than 0.1% today’s global aviation fuel consumption, which was around 330m tonnes in 2019. Investment bank Jefferies (NYSE) stated.

The market growth is difficult due to several obstacles, including the high cost of SAF (which can be up to 8x more expensive than regular jet fuel) and limited supply of feedstock.

Shell stated that it hopes others will follow the example of Shell.

Anna Mascolo from Shell Aviation said that she expected other companies to follow her lead and build on it by creating their own production facilities.

According to the United States, it intends to decrease aircraft greenhouse gas emissions by 20 percent by 2020. This will be achieved by significant increases in SAF consumption.

Graphic – Global aviation emissions: https://graphics.reuters.com/SHELL-AVIATION/dwvkrdawmpm/chart.png

NEW PRODUCTION

Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.

Shell is planning to construct a biofuels plant in Rotterdam, which will have a capacity of 820,000 tonnes per year. SAF will account for more than half. It is anticipated that the plant will begin production by 2024.

Shell, Deloitte and a joint report about the decarbonization of aviation called on the industry to reduce its carbon emissions to zero net by 2050.

International Air Transport Association represents most international airlines and aims to cut emissions by half.

It is possible to reduce carbon emissions by using lower-carbon fuels, and compensating the remainder with carbon credits.

Shell is currently developing synthetic aviation fuel using hydrogen and recycled carbon.

Mascolo declared that sustainability in aviation fuels, be they bio- or synthetic, is still the best solution.