Sustainable aviation fuel for ASEAN (part 2): SAF credit to pave the way to environmental positive ambitions
· 17 min read
The need to address aviation's environmental effect and work towards reaching net-zero emissions is growing along with the demand for air travel. A viable approach to lowering carbon emissions in the aviation sector is Sustainable Aviation Fuel (SAF). It can drastically reduce greenhouse gas emissions and is a drop-in replacement for standard jet fuel. The introduction of SAF credits is crucial to advancing future net-zero goals in the regional aviation industry. SAF credits offer a market-based method to encourage the creation and consumption of sustainable aviation fuel. By encouraging the adoption of SAF through credits, ASEAN can hasten the transition to a more ecologically conscious and sustainable aviation industry, ultimately aiding in efforts to mitigate global climate change.
Sustainable aviation fuel (SAF) is a low-carbon, renewable substitute for conventional jet fuel derived from biomass, waste products, or other sustainable feedstocks. Governments and organisations all across the world have set up SAF credits or certification programmes to encourage the creation and usage of SAF. SAF credits are units of renewable energy or carbon emissions reduction that may be purchased and sold to assist the development of SAF and lessen the carbon footprint of the aviation sector.
The demand for air travel is expected to triple in the ASEAN region by 2040, making it one of the fastest-growing economies in the world. However, this expansion also entails a rise in carbon emissions, making the implementation of SAF an essential tactic to lessen aviation's negative environmental effects. SAF credits can encourage the creation and use of SAF in ASEAN nations, which will lessen the region's aviation sector's carbon impact.
SAF technology was first developed in the 1970s, but considerable research and development efforts weren't done until the early 2000s. Using a 50/50 mixture of SAF and conventional jet fuel, the first commercial flight powered by SAF took off in 2008. SAF technology has come a long way since then, and is now a competitive alternative to conventional jet fuel.
The high expense of SAF in comparison to conventional jet fuel is one of the main obstacles to its manufacture and deployment. However, production has scaled up in response to the rising demand for SAF, and prices are anticipated to drop. In 2020, 4.5 million gallons of SAF were produced in the United States alone, an increase of 68% from 2019.
Government initiatives, private sector investment, and stakeholder cooperation have fuelled the growth of SAF production and adoption. For instance, the Clean Skies for Tomorrow Coalition (CST was established in 2019), a group of 60 businesses committed to accelerating the adoption of SAF, has promised to power 10% of all aviation worldwide with SAF by 2030 and to facilitate the transition to net-zero flying by 2050. ASEAN nations have also taken action to encourage SAF production and use. One such initiative is Indonesia's Biojet Fuel Mandate, which mandates that by 2025, all domestic airlines utilise a minimum of 2% biojet fuel on domestic flights.
The expansion of the ASEAN aviation sector offers both a chance and a problem for reducing environmental effects. SAF credits can encourage the development and implementation of SAF, which can assist in lowering the carbon footprint of the local aviation sector. Government regulations, corporate sector investment, stakeholder collaborations, and ASEAN countries' initiatives to encourage SAF production and adoption are what are driving the growth in SAF production and adoption globally. SAF is anticipated to replace conventional jet fuel in the ASEAN region and beyond as production increases and costs fall down.
The aviation business has a large impact on greenhouse gas emissions, which are a major environmental concern. In 2019, the aviation sector contributed 2% of the world's carbon dioxide emissions, and if no action is taken, this is expected to rise to 3% by the year 2050, according to the International Air Transport Association (IATA).
The ASEAN area, which has one of the world's fastest-growing aviation sectors, is severely affected by aviation emissions' effects on the environment. Increased emissions have resulted from the region's large increase in air passenger travel. According to projections, by 2040, the ASEAN region would have contributed 10% of all aviation emissions, up from 5% in 2019.
Reducing the carbon footprint of the ASEAN aviation industry is possible to a great extent using sustainable aviation fuel. A variety of feedstocks, including non-food crops, agricultural leftovers, and municipal garbage, can be used to create SAF. When compared to conventional jet fuel, the usage of SAF can reduce greenhouse gas emissions by up to 80%. It can also be used in existing infrastructure and aircraft.
To encourage the use of SAF in the aviation sector, a number of initiatives have been launched in the ASEAN region. The Philippines Department of Energy, for instance, published recommendations for the use of SAF in commercial aviation in 2021. The guidelines are intended to promote the use of SAF in order to lessen the carbon footprint of the Philippine aviation sector.
In addition, a coalition of 60 businesses called Clean Skies for Tomorrow pledged in 2021 to utilise 10% sustainable aviation fuel by 2030. Singapore Airlines, Cathay Pacific Airways, Malaysia Airlines, and other businesses that operate in the ASEAN region are part of the coalition. The ASEAN region's SAF adoption will be aided by this commitment, which will also assist the aviation sector's carbon footprint decrease.
Significant potential exists for the ASEAN aviation sector to reduce its carbon footprint through the use of sustainable aviation fuel. In the ASEAN region, which has one of the world's fastest-growing aviation sectors, the effect of aviation emissions on the environment is particularly significant. It will be essential to decrease the carbon footprint of the ASEAN aviation industry to encourage the use of SAF in the area through programmes like the Clean Skies for Tomorrow Coalition and the Philippine Department of Energy guidelines.
As the aviation sector attempts to lower its carbon impact, the use of sustainable aviation fuel (SAF) has grown more crucial. Used cooking oil, agricultural waste, and algae are just a few examples of the sustainable feedstocks used to make SAF, a type of biofuel. As opposed to traditional jet fuel, SAF can reduce greenhouse gas emissions by up to 80%, making it a practical option for lowering aviation's carbon footprint. However, there are a number of obstacles to the adoption of SAF credit that must be overcome before it can be widely used.
The restricted supply and higher prices of SAF are two of the greatest issues with the implementation of SAF credit. The cost of generating SAF is higher than that of conventional jet fuel, and production is currently restricted. The International Energy Agency estimates that manufacturing SAF costs 2-4 times more than producing conventional jet fuel. This is due to SAF's smaller production scale and costlier feedstock requirements compared to traditional jet fuel.
Governments, businesses, and stakeholders must collaborate to develop a sustainable supply chain for SAF in order to overcome this obstacle. Building collaborations with feedstock suppliers, investing in R&D, and developing a market for SAF are all necessary for the creation of a sustainable supply chain. Through tax credits, subsidies, and rules that require the use of SAF, governments can also encourage the production and use of SAF.
Infrastructure and supply chain issues are two other issues that come with the introduction of SAF credit. There is currently a lack of accessibility to the infrastructure needed for the manufacture, delivery, and distribution of SAF. Its use is constrained by the absence of infrastructure in some areas, which makes it difficult for airlines to access SAF.
Governments, businesses, and other stakeholders must invest in the infrastructure needed for the manufacture, distribution, and transportation of SAF in order to address this issue. To bring SAF to airports, new refineries, pipelines, and storage facilities must be built. To enable a smooth transition to SAF, cooperation between airports, airlines, and fuel suppliers is also required.
Government assistance and laws are also necessary for SAF credit adoption. Governments can encourage the use of SAF by offering financial incentives such as tax breaks, financial aid, and grants for R&D. By establishing goals and regulations for the aviation sector to follow, governments can also compel the adoption of SAF.
The Indonesian government, for instance, set a goal for airlines in 2018 to utilise 2% of SAF by 2025. Additionally, the government offered tax breaks to businesses that make and utilise SAF. Malaysia introduced the Green Technology Financing Scheme in 2020, which offers funding to businesses like SAF that create green technology.
Through the CAAS-SIA-Temasek pilot project, the Singaporean government has demonstrated strong support for Sustainable Aviation Fuel (SAF). To create and show the viability of SAF credits in the aviation sector, Temasek Holdings, Singapore Airlines (SIA), and the Civil Aviation Authority of Singapore (CAAS) have joined forces. In order to allow airlines to offset their carbon emissions and promote the use of SAF, this pilot effort intends to create a reliable and transparent market mechanism for SAF credits.
This development has multiple implications for ASEAN aviation. In the first place, it highlights Singapore's dedication to environmental protection and sustainability in the aviation industry. Singapore, a significant centre for international aviation in Southeast Asia, actively supports SAF credits, setting a positive example for other ASEAN nations and encouraging the implementation of sustainable practises in the local aviation sector.
A regional SAF ecosystem is developed as a result of the CAAS-SIA-Temasek pilot project, which is the second benefit. It promotes airline investment in SAF in the ASEAN area and helps the expansion of SAF supply chains by establishing a transparent market system for SAF credits. This pilot project may serve as a springboard for other ASEAN nations to investigate related initiatives and partnerships, boosting regional cooperation in the promotion of sustainable aviation.
The aviation industry needs to consider the use sustainable aviation fuel credits if it is to reduce its carbon footprint. SAF credit adoption, however, has a number of difficulties that must be overcome before being widely adopted. Governments, businesses, and other stakeholders must collaborate to build a sustainable supply chain for SAF, invest in the production and distribution infrastructure needed, and support its adoption through financial incentives and legal framework. SAF can contribute to the development of a more sustainable aviation industry and a reduction in aviation's carbon emissions with the correct backing and funding.
For the continued development of ASEAN aviation, Singapore’s backing of SAF credits through the CAAS-SIA-Temasek pilot initiative is extremely important. It highlights Singapore's dedication to sustainability, encourages regional cooperation, and encourages the use of environmentally friendly aviation fuels. This result opens the door for more SAF adoption and helps the ASEAN aviation sector's overall decarbonization efforts.
The Sustainable Aviation Fuel (SAF) Credit is gaining momentum and mindshare as a means of encouraging the usage of SAF and quickening the transition to a more environmentally friendly aviation sector. Although adopting SAF has its obstacles, there are also potential benefits that could make it desirable for both governments and airlines to invest in.
The large reduction in greenhouse gas emissions compared to conventional jet fuel is one of the main advantages of using SAF. SAF is a key instrument for helping the aviation sector meet its environmental objectives because it can cut carbon dioxide emissions by up to 80% when compared to regular jet fuel. The aviation sector has pledged, according to the International Air Transport Association (IATA), to cut CO2 emissions by 50% from 2005 levels by 2050. The utilisation of SAF will be essential in order to meet this challenging goal.
In terms of SAF adoption, ASEAN nations have made progress. For instance, Singapore has the audacious goal of requiring sustainable aviation fuel on every flight leaving Changi Airport by the year 2030. In order to provide SAF to Thai Airways, Thai Airways' Neste and AirBP (a division of BP), recently (in August 2020) partnered. Since June 2022, Kuala Lumpur International Airport's operating airlines have access to SAF thanks to Malaysia's state oil firm, Petronas, which has also entered the SAF production market. These illustrations show how SAF is becoming a subject of increasing interest in the ASEAN area.
The aviation sector and associated industries can profit economically from SAF. Airlines can gain from price stability and hedging options even if the initial cost of SAF is often higher than that of conventional jet fuel. Because it is influenced by changes in the price of crude oil globally and by geopolitical events, jet fuel prices are notoriously unstable. Contrarily, SAF can offer airlines a more steady supply and price of fuel, allowing them to better control their costs and increase their bottom line.
The development of SAF has the potential to boost economic growth and add new jobs in the biofuels industry. The expansion of the biofuels sector could present fresh chances for economic development in ASEAN, as several nations are attempting to diversify their economies. A prudent investment in sustainable technologies, the deployment of SAF can also assist airlines in achieving their Corporate Social Responsibility (CSR) objectives.
SAF adoption on a large scale has the potential to give airlines a competitive edge and global recognition. Consumers are becoming more and more concerned about the effects of aviation on the environment, and they may have a more favourable opinion of airlines that show a commitment to sustainability. Adopting SAF can boost an airline's reputation and competitiveness because it allows them to stand out from rivals and position themselves as industry leaders in sustainability.
Governments can gain from encouraging SAF adoption because it will improve their standing abroad and show that they are committed to sustainability. Additionally, the expansion of the biofuels business may spur job growth and economic expansion, both of which may have a favourable domino impact on other economic sectors.
Therefore, it is widely acknowledged that adopting the Sustainable Aviation Fuel Credit can have a positive impact on the environment as well as the aviation sector. SAF adoption has its obstacles, no doubt, but it also has its potential benefits, which can make it a viable investment for both airlines and governments. Airlines can reduce their carbon footprint, boost their financial performance, and stand out from the competition by adopting SAF, while governments can show their commitment to sustainability and foster economic growth.
Although SAF credits and greater usage of Sustainable Aviation Fuel (SAF) are important milestones towards lowering emissions in the ASEAN aviation industry, they cannot be the only programmes to drive the sector to net zero. A complex strategy combining several technologies and tactics is needed to achieve net-zero emissions. The following are some explanations as to why SAF credits and SAF alone might not be enough:
To reach net zero or low emissions in the ASEAN airline industry, several current and future technologies can play a significant role:
While the adoption of SAF and SAF credits are essential steps in the decarbonization of the ASEAN airline sector, they should be complemented by a number of complementary technologies and tactics. Among the present and upcoming technologies that can assist the industry in achieving net zero or low emissions are electric aircraft, sustainable energy sources, hydrogen fuel cells, sophisticated air traffic management, and carbon offsetting and removal programmes. To realise the ambitious aim of a sustainable and carbon-neutral aviation sector in ASEAN and beyond, a thorough and integrated approach is necessary.
It is obvious that the implementation of a sustainable aviation fuel credit in ASEAN has the potential to have a big influence on the carbon emissions of the aviation sector and the sustainability of the environment as a whole. SAF has the potential to revolutionise the sector, and its implementation might result in reduced emissions, financial gains, and global recognition.
The introduction of SAF credits is not without its difficulties, including greater costs and limited availability as well as issues with infrastructure and supply chains. However, the potential benefits outweigh these difficulties by a wide margin. While SAF and SAF credits are not the only option for the ASEAN airline industry's transition to low/zero missions, they are a first step in developing new opportunities and processes, and incorporating innovative solutions in support of a shared goal—net zero by 2050.
The aviation sector cannot implement SAF all by itself. By offering incentives, putting laws and regulations into place, investing in R&D, and implementing policies and regulations, the governments of the ASEAN nations must encourage the adoption of SAF. The market for SAF may expand more quickly as a result of this support, which may also lower production costs and boost SAF availability.
As more airlines commit to utilising SAF in their operations, the future of SAF in ASEAN is bright. However, the governments and industry players will need to make sizable investments and provide support if the ASEAN nations are to achieve their net-zero goals.
Governments can speed up the implementation of SAF and reduce carbon emissions from the aviation sector over the next few years by providing the required incentives and support. This will support the global effort to battle climate change and assist ASEAN nations in achieving their objectives for environmental sustainability.
For the future of the aviation industry and the region's environmental sustainability, ASEAN must embrace a sustainable aviation fuel credit. To guarantee a better and greener future for the ASEAN aviation sector, we must take immediate action to assist the adoption of SAF.
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