^_Q&A
FUELLING DEMAND

BTN Europe: As part of the wider business, how significant is Shell aviation’s SAF production? And what methods and materials are you using?

Jan Toschka: Shell is transforming refinery assets to produce SAF and accelerating the use of a range of different technology pathways to create SAF molecules. For example, we are building one of Europe’s largest biofuels facilities at our Shell Energy and Chemicals Park Rotterdam. With 820,000 tonnes a year production capacity, it will produce sustainable aviation fuel (SAF) and renewable diesel made from waste from 2024.

We have also completed the upgrading of our facility in Singapore this year to enable SAF blending in the burgeoning Asia Pacific region. We are already supplying sustainable aviation fuels to customers in Europe, Asia, and the US. We aim to supply a significant share of SAF through our own production and by working with others.

We are also investing in promising technologies to accelerate other production pathways. For example, we have invested in LanzaJet, a leading sustainable fuels technology company and sustainable fuels producer, with its Alcohol to Jet technology. And together with Vattenfall, SAS and Lanzatech we are investigating the production of synthetic SAF using the LanzaJet 'Alcohol to Jet' technology in Sweden.

Investing in a range of pathways, from hydrotreated esters and fatty acids (HEFA) and alcohol-to-jet, to Fischer-Tropsch and power-to-liquids, will be crucial to scaling SAF supply and providing the volumes required to decarbonise aviation.

BTN Europe: Where’s demand for SAF coming from: airlines, airports, companies, air passengers...?

Jan Toschka: Demand for SAF is increasingly coming from across the ecosystem, which is an important development because it will take the efforts of every player who works in or benefits from the aviation industry to work together to decarbonise flight.

According to estimates from the Air Transport Action Group, roughly between 5,000 – 7,000 production facilities may be required to produce sufficient SAF to make aviation net-zero by 2050. To finance these, up to $1.45 trillion worth of investment over the next 30 years will be needed to decarbonise the majority of the fuel used in aviation by 2050. That’s almost $50 billion annually, so it’s clear from the scale of the challenge that no one company holds the key.

Succeeding in scaling SAF and decarbonising aviation will require action from everyone from fuel providers to airports and airlines, to business travellers and passengers, without forgetting support from the finance industry and policymakers.

Airlines and airports will need SAF to reduce their Scope 1 and 3 emissions respectively and to make their operations sustainable. Companies also need to reduce emissions from flying to meet their net-zero targets. There’s also a role for individual passengers to look at their own carbon footprint and choose to fly with airlines that are reducing their carbon emissions, for example through using SAF.

To support this, Shell is working to collaborate, to supply and to invest, all with the aspiration of offering SAF as a significant part of our fuels’ portfolio. Our ambition is for 10 per cent of global aviation fuel customer purchases to be SAF by 2030.

BTN Europe: What are the environmental gains delivered by SAF?

Jan Toschka: Neat SAF can reduce lifecycle emissions by up to 80 per cent compared to conventional fuel. As a drop-in fuel it’s already fully compatible with existing airport refuelling infrastructure and aircraft fleets. We cannot let perfect be the enemy of good – SAF is the best lever we have to decarbonise aviation now and over the next 30 years. It allows us to make the progress required to make net-zero aviation a reality by 2050.                 

BTN Europe: We often hear that not all SAFs are good. Some, depending on source materials or production methods, have their own environmental impact. Enlighten us.

Jan Toschka: Of course, it’s important that we ensure SAF feedstocks are sustainable. We have robust sustainability criteria for our biofuel feedstocks, and we fully support the adoption of international sustainability standards for agricultural practices. All biofeedstocks that Shell purchases are covered by sustainability clauses supply contracts, providing a base level of assurance for all feedstock regardless of origin or voluntary sustainability standard certification.

BTN Europe: You have a number of strategic agreements in place with airlines, airports and other players in the aviation ecosystem – tell us more.

Jan Toschka: We are working with a number of partners and stakeholders on further opportunities for SAF supply and use. Most recently, we signed a non-binding MoU with Lufthansa Group, where the total volume of SAF supplied over seven years could reach up to 594 million gallons. If a definitive agreement is reached, this would be our largest SAF commitment to date.

Earlier this year, we also announced that Shell has become the first supplier of SAF to customers in Singapore, marking a significant milestone for the decarbonisation of aviation in the Asia-Pacific region.

Another significant agreement from the past year was our collaboration with Accenture, Amex GBT and Energy Web Foundation to launch Avelia [see below].

Shell is also proud to be a founding member of the World Economic Forum’s Clean Skies for Tomorrow Coalition, which works on projects to make SAF more widely available. We are also delighted to be a member of the UK government's Jet Zero Council.

BTN Europe: Tell us more about that the Avelia book-and-claim platform for corporates. How has this been received to date?

Jan Toschka: Avelia is one of the largest SAF book-and-claim pilots at launch, offering one million gallons of SAF – enough to power nearly 15,000 individual business traveller flights from London to New York. Developed by Shell and Accenture, with the support of the Energy Web Foundation (EWF), Avelia includes Amex GBT’s world-leading travel management services to aggregate global business demand for SAF. A stronger demand signal would help to increase SAF supply and use, which in turn can help accelerate the aviation industry’s pathway towards net-zero emissions.

Avelia aims to jumpstart the SAF market at scale by enabling business travellers and airlines to share the cost of SAF while each receiving respective credit for the associated carbon reductions. This scalable co-investment model that sits at the heart of Avelia is a crucial step to scaling supply. 

In a nutshell, book-and-claim allows airlines and companies to pay for SAF, and claim the environmental benefits, even if SAF is not available at their departure airport. SAF will instead be fed into another aircraft in an airport where available.

The partners of Avelia passionately believe that this is the solution the industry has been calling for. It is the platform that can really drive acceptance of book-and-claim as a mechanism to claim emissions reduction with unprecedented scalability. We’re inviting like-minded companies to join us to drive real change in decarbonisation of the aviation industry, working together towards gaining and accelerating this acceptance.

We’re pleased that Avelia has been well received throughout the industry, and has sparked positive conversations with business customers. Aon recently joined Avelia as a corporate customer and we expect that we’ll be able to make announcements of further business customers and airlines soon.

BTN Europe: Right now SAF is expensive compared to traditional aviation fuels and supply is limited. How is that going to change?

Jan Toschka: Despite the positive steps taken on increasing the use and availability of SAF, today’s commercial SAF production is only a fraction of total jet fuel consumption.

The SAF supply chain faces a 'chicken and egg' problem with supply and demand; costs will come down if production scales up – thanks to learning curve effects and economies of scale – but fuel providers are lacking a strong demand signal to increase production and demand is low due to the high price premium. Currently, SAF is two to eight times more expensive than conventional fuel. It is therefore essential to close this cost gap so that demand for SAF can drive increases in production volumes.

While new capacity is set to come online over the next five years, considerably more is required to achieve significant reductions in emissions. The solution is to scale up SAF, which is exactly what Shell is working to do, notably through our Avelia programme.

BTN Europe: Is SAF the answer to decarbonising aviation or is it part of a wider solution?

Jan Toschka: The aviation industry will need to use multiple levers to meet its net-zero emissions targets for 2050 and beyond, of which SAF is a key solution. Offsets will be particularly important during the time it takes to fully develop other ways to decarbonise the sector. In the future, new technologies such as battery electric and hydrogen-fuelled aircraft have the potential for certain applications and uses, particularly for smaller aircraft over short to medium-haul flights.

But the real need is now; there is an urgent need to decarbonise our sector. This leaves SAF as the only viable, in-sector option for reducing emissions in the short-to-medium term. SAF offers significant potential for decarbonisation without the need to modify existing infrastructure, and neat SAF can reduce lifecycle emissions by up to 80 per cent compared to conventional jet fuel.

Although different measures will have different timelines for greatest impact, all viable solutions must be deployed between now and 2050. There is an opportunity that SAF becomes a substantial part of the overall aviation jet fuel supply chain by 2050 – and this is what we must aim for.

BTN Europe: How can global companies leverage their buying power and influence to advance investment, development and supply of SAF?  

Jan Toschka: Currently, the SAF market is fragmented, and insufficient demand can prevent investment, expansion and increased supply. Business travel is uniquely positioned to play a key role in creating a stronger demand and helping de-risk investment in production and new SAF technologies. This is because business travel forms a more concentrated segment than leisure passengers and the average business travel booking produces 4.3 times more revenue than a typical leisure booking. Such concentration creates an opportunity to focus decarbonisation efforts on a relatively small number of customers who could form a critical mass in support of decarbonisation.

By bringing corporations and airlines together via Amex GBT’s leading business travel service, which includes 40 of the top 100 companies by travel spend, Avelia pools demand for SAF. This provides Shell and other SAF suppliers with the certainty and scale required to accelerate investment in production, thereby increasing supply. The spotlight is now shining on businesses that have emissions from corporate travel and so there is an urgency for them to secure a sustainable solution to allow them to continue to have access to the benefits of travel.