Airlines Secure Major SAF Deals to Meet Climate Goals

Global Airlines Ramp Up Sustainable Aviation Fuel Purchases

The aviation industry is making significant strides toward decarbonization as airlines worldwide announce major sustainable aviation fuel (SAF) purchase agreements. According to the International Air Transport Association (IATA), 67 airlines have publicly announced SAF commitments as of June 2024, with 88 total SAF agreements signed over the past two years - 65 of which are binding purchase agreements. This represents a dramatic acceleration in the industry's transition away from conventional jet fuel.

North American Airlines Lead the Charge

North American carriers are setting the pace for global SAF adoption. United Airlines leads with commitments for 2.9 billion gallons of SAF, followed by Delta with 910 million gallons, and American Airlines with 620 million gallons. Air Canada has secured 20.5 million gallons annually, while JetBlue has committed to 1 million gallons per year. These massive volumes signal a fundamental shift from experimental SAF usage to commercial-scale implementation.

'SAF is crucial for aviation decarbonization and we need government incentives to prioritize SAF production over renewable diesel,' emphasized Willie Walsh, IATA Director General, in a recent statement. 'The industry has made commitments, but we need production to match our ambitions.'

Production Challenges and Solutions

Despite growing demand, SAF production faces significant hurdles. IATA reports that SAF production reached just 1 million tonnes in 2024, doubling from 2023 but falling short of previous estimates of 1.5 million tonnes. This represents only 0.3% of global jet fuel production. Key production facilities in the US have delayed ramp-up to early 2025, creating a supply-demand imbalance.

The majority of current agreements (75 out of 88) involve bio-SAFs using Hydro-processed Esters and Fatty Acids (HEFA) technology, which relies on limited feedstocks like used cooking oil. Only 13 agreements are for e-fuel SAFs from Power-to-Liquid projects, which combine waste CO2 with clean hydrogen but remain expensive and under development.

'We're exploring more readily available feedstocks such as woody biomass and agricultural waste to produce lower-carbon jet fuel more sustainably,' explained Dr. Maria Chen, a sustainable fuels researcher at MIT. 'The industry needs to diversify beyond HEFA pathways to achieve meaningful scale.'

Corporate Demand Driving Market Growth

The Sustainable Aviation Buyers Alliance (SABA) recently announced historic agreements representing the largest-ever collection of SAF certificate purchases. Nearly 20 major corporations including AstraZeneca, Deloitte, JPMorgan Chase, Meta, and Netflix have committed to purchasing SAF certificates for approximately 50 million gallons of high-integrity SAF over five years, channeling close to $200 million into the SAF market.

This corporate demand helps lower barriers to entry and builds the SAF certificate market through innovative procurement models. The SAF purchased achieves an average 80% reduction in carbon intensity compared to conventional jet fuel, with sustainability certified by third parties.

Policy Support and Future Outlook

Government policies are playing a crucial role in bridging the cost gap between conventional jet fuel and SAF. The Illinois SAF Purchase Credit policy, for example, enabled United Airlines to secure up to 1 million gallons of SAF for Chicago O'Hare flights. Similarly, California's Low Carbon Fuel Standard (LCFS) credits provide financial incentives for SAF production and use.

Globally, 140 SAF production facilities are in development across 31 countries, with projected renewable fuel capacity of 51 million tonnes by 2030. However, to reach net zero by 2050, aviation needs 3,000-6,500 new renewable fuel plants requiring $128 billion in annual investment.

'The U.S. SAF Grand Challenge targets 3 billion gallons annually by 2030, while Canada's Clean Fuel Regulations require 1 billion liters by 2030,' noted aviation analyst James Peterson. 'We need federal blending mandates, extended tax incentives, and infrastructure retrofits to achieve these ambitious targets.'

Despite current challenges, the surge in airline SAF purchase agreements represents a turning point for aviation sustainability. As production scales up and costs decrease, sustainable aviation fuel is poised to become a mainstream energy commodity rather than a niche environmental product.