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Sustainable aviation fuel costs more but consumers willing to pay: IATA


The main problem with sustainable aviation fuel is volume, not airlines’ desire for it. Consumers will also be prepared to spend the additional costs involved in its use, according to the International Air Transport Association director general.

Willie Walsh spoke to SquawkBox Europe on Friday morning and stated that quantity was the key issue.

“We used about 100 million liters of sustainable aviation fuel in 2021 — that’s a very small amount compared to the total fuel required for the industry.”

Walsh claimed that airlines have ordered SAF in excess of 14 billion liters. He said, “I believe that it addresses the question of whether airlines buy the product.”

Walsh said that even though SAF’s price was twice as expensive than jet kerosene, this phenomenon was still occurring. When you factor in the cost of carbon, you’re looking at maybe … twice the price of kerosene.”

Although there is some demand for SAF it’s not easy to meet. The sector will be difficult to dominate.

IATA expects that SAF production will reach 7.9 Billion liters before 2025, which is just 2 % of overall fuel demand. According to the trade organization, production could reach 449 Billion Liters (or 65%) by the middle of this century.

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It has a significant environmental impact. The World Wildlife Fund describes it as one of the most rapidly-growing greenhouse gas sources driving climate change. According to the WWF, air travel is currently “the most carbon-intensive activity that an individual can engage in.”

Even though the European Union Aviation Safety Agency claims that there is “not one internationally accepted definition” for sustainable aviation fuels, the overriding idea behind them is that they can be used in order to lower an aircraft’s emission.

Aerial manufacturer is the most content-rich. AirbusSustainable aviation fuels are “made from renewable raw materials,” according to a statement by the author. The most popular feedstocks, according to experts, are those that are derived from or use cooking oils and animal fats.

Some people are worried that an increased use of SAF might lead to deforestation of important crops and a decrease in food production.

Walsh, for his part said that it was critical the industry didn’t use feedstocks competing with land or food production. “All of the regulations in relation to the … longer term development of sustainable aviation fuels will guarantee that that’s not the case.”

On the subject of cost, Walsh — the former CEO of International Airlines Group — acknowledged this would be something passed on to the traveling public.

“Sustainable fuels are about twice what you’re paying for … the traditional jet kerosene, so it does represent a significant hike in the airline industry’s cost base,” he said.

“Eventually, the consumers will be responsible for that. That’s too much to expect from the industry.”

This would become a long-term reality for consumers. This is a very important topic. He said that they would eventually be willing to make the payment.