The airline industry’s dirty secret: Clean jet fuel failures – Yahoo Finance

 

Report on the Aviation Industry’s Faltering Progress Towards Sustainable Development Goals

An analysis of the global aviation sector’s transition to Sustainable Aviation Fuel (SAF) reveals a significant disconnect between public commitments and tangible progress. This failure critically undermines the industry’s contribution to several United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), SDG 13 (Climate Action), and SDG 17 (Partnerships for the Goals).

Challenges to Climate Action and Clean Energy Adoption (SDG 13 & SDG 7)

The aviation industry, responsible for 2.5% of global carbon emissions, has set a target of net-zero emissions by 2050. Achieving this goal, a key component of global efforts under SDG 13, is heavily reliant on the widespread adoption of SAF. However, current production and utilization rates fall dramatically short of the required scale.

Discrepancy Between Targets and Production

• The International Air Transport Association (IATA) forecasts SAF will constitute just 0.7% of total jet fuel in the current year.
• Meeting the 2050 net-zero target requires a more than 300-fold increase in SAF production, from current levels to 118 billion gallons annually.
• The industry’s interim goal of a 10% SAF blend by 2030 appears increasingly unattainable given the current trajectory.

Barriers to Affordable and Clean Energy (SDG 7)

The transition is hampered by fundamental economic and technological challenges that prevent SAF from being a viable, large-scale clean energy source for aviation.

• Cost Prohibitive: SAF costs three to five times more than conventional jet fuel, creating limited demand from airlines at current prices.
• Feedstock Constraints: The majority of existing SAF production relies on the Hydroprocessed Esters and Fatty Acids (HEFA) process, which uses feedstocks like used cooking oil and animal fats. The limited availability of these raw materials severely constrains scalability.
• Technological Immaturity: Projections for emissions reductions often depend on unproven technologies or early-stage projects managed by startups with no record of commercial production.

Failures in Sustainable Infrastructure and Innovation (SDG 9)

The development of a robust and resilient infrastructure for SAF production, a core tenet of SDG 9, has been plagued by systemic failures, project abandonments, and a lack of sustained investment.

Analysis of SAF Project Viability

A comprehensive review of 165 SAF projects announced by airlines over the past 12 years reveals a pattern of failure:

• Only 36 projects have materialized in any form.
• 23 projects have been officially abandoned.
• 27 projects are significantly delayed or on indefinite hold.
• 31 projects have yet to produce any fuel.
• A further 44 projects have no public updates since their initial announcement.

Even if all pending projects were to reach maximum potential, they would only generate approximately 10% of the SAF volume needed for the 2050 net-zero target.

Case Study: The Collapse of World Energy’s Paramount Refinery

The closure of World Energy’s Paramount, California refinery exemplifies the sector’s fragility. Once a flagship SAF production facility, its failure highlights critical weaknesses in the industry’s approach.

• The plant, which supplied major carriers like United Airlines and JetBlue, ceased operations in April.
• United Airlines terminated its fuel purchase contract, a partnership once hailed as an industry model.
• A planned $2 billion expansion of the site was cancelled after partner Air Products withdrew, citing challenging commercial conditions.
• World Energy’s plans for a second plant in Houston have also stalled due to a lack of firm industry commitment.

Erosion of Partnerships and Responsible Production (SDG 17 & SDG 12)

Progress towards the SDGs is contingent on effective collaboration. The SAF sector, however, is characterized by a breakdown in partnerships (SDG 17) and a failure to establish responsible production and consumption patterns (SDG 12).

Fragmented Commitments and Misaligned Stakeholders

A cycle of blame persists between stakeholders. Airline industry representatives state the oil industry is not producing enough SAF, while oil company executives argue there is insufficient demand from airlines to justify investment. SAF producers report that airlines often make bold public announcements that are not backed by the firm, long-term financial commitments necessary to secure funding and de-risk large-scale infrastructure projects.

Case Studies in Failed Ventures

• SGP BioEnergy: A pledge to build the world’s largest SAF facility in Panama has been delayed to 2027 due to waning airline interest. The company may pivot to producing renewable diesel for the shipping and trucking industries, which have shown more serious commitment.
• SG Preston: The company filed for bankruptcy in 2022 after failing to construct any of its five planned North American SAF plants, despite securing 10-year purchase agreements with JetBlue and Qantas.
• Velocys: Despite a 15-year partnership with IAG (parent of British Airways) and government grants, the British startup has failed to bring any of its projects to commercial production. A key project in Immingham, UK, intended to supply British Airways last year, remains an empty field.

Conclusion: Regulatory Pressures and an Uncertain Outlook

The aviation industry’s strategy of projecting imminent success in SAF production appears to be a tactic to bolster green credentials while deflecting calls for more stringent regulations. However, regulatory pressures are mounting, with new EU mandates requiring escalating SAF usage, which is estimated to cost airlines an additional $2.9 billion this year. The potential for political shifts to roll back green energy incentives in the United States adds further uncertainty. Without a fundamental shift towards genuine, collaborative, and financially-backed partnerships, the aviation sector’s path to decarbonization will remain a distant goal, severely compromising its ability to contribute meaningfully to the Sustainable Development Goals.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 7: Affordable and Clean Energy

• The article’s central theme is the aviation industry’s struggle to transition to Sustainable Aviation Fuel (SAF), a form of clean and renewable energy. It directly addresses the challenge of increasing the share of renewable energy in the transport sector. The high cost of SAF, noted as being “three to five times more than jet fuel,” highlights the “affordable” aspect of this goal.

SDG 8: Decent Work and Economic Growth

• The economic viability and growth of the green fuel industry are discussed. The closure of the World Energy refinery in Paramount, which resulted in “all 35 employees” being laid off, directly connects the transition to clean energy with employment and decent work.

SDG 9: Industry, Innovation, and Infrastructure

• The article focuses on the need for new infrastructure (SAF refineries) and innovation in production technologies (like HEFA and Fischer-Tropsch) to make the aviation industry more sustainable. The failure of projects, such as the stalled $2 billion expansion of the Paramount site and the delayed SGP BioEnergy plant in Panama, underscores the significant challenges in building this new green infrastructure.

SDG 12: Responsible Consumption and Production

• The production of SAF from sources like “used cooking oil, agricultural residues and other waste” is a clear example of promoting sustainable production patterns by turning waste into a valuable resource. The article discusses the airline industry’s consumption patterns and the need to shift towards cleaner fuels to be more responsible.

SDG 13: Climate Action

• The primary motivation for adopting SAF is to combat climate change. The article explicitly states that “Aviation accounts for 2.5% of global emissions of planet-warming gases” and discusses the industry’s goal of “net zero emissions by 2050” as a key climate action strategy. The EU’s mandates on SAF usage are a direct policy measure to mitigate climate change.

SDG 17: Partnerships for the Goals

• The article is a case study on the importance and challenges of multi-stakeholder partnerships. It details collaborations between private companies (United Airlines and World Energy), public-private partnerships (Velocys and the British government), and international cooperation (SGP BioEnergy and the government of Panama). The failures and stalls in these projects highlight the difficulties in creating effective partnerships to achieve sustainability goals.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article directly relates to this by discussing the airline industry’s goal to “switch to a blend of 10% SAF by the end of this decade” and the EU’s mandate for SAF to be “at least 2% of their fuel in 2025, climbing to 6% by 2030.”
   • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article details numerous attempts at such cooperation, including the SGP BioEnergy project in Panama and the challenges in securing investment for projects like the World Energy refinery expansion.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies. The entire article is about the aviation industry’s attempt to achieve this by building SAF plants and adopting new fuel technologies. The Reuters finding that only 36 of 165 announced projects have materialized shows the slow progress toward this target.

3. SDG 12: Responsible Consumption and Production

   • Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse. The use of “used cooking oil and animal fat from a local abattoir,” “garbage, wood chips, or flared gas” as feedstocks for SAF directly supports this target by reusing waste materials.

4. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article provides a clear example with the “new EU rules” that create “escalating mandates to use SAF on flights departing from EU airports,” which is a direct integration of climate measures into regional policy.

5. SDG 17: Partnerships for the Goals

   • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships. The article extensively documents these partnerships, such as the collaboration between World Energy and airlines like United and JetBlue, and the involvement of governments providing grants, like the “27 million pound ($37 million) grant” from the British government to Velocys. The widespread failure of these projects, as analyzed by Reuters, speaks to the challenge of making these partnerships “effective.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 7 (Affordable and Clean Energy)

   • Renewable energy share: The percentage of SAF in total jet fuel is a direct indicator. The article provides specific data points: “0.3% in 2024,” a forecast of “0.7% of total jet fuel this year,” and goals of “10% SAF by the end of this decade” and “70% by 2050” under EU rules.
   • Financial flows: The amount of investment in clean energy infrastructure is an indicator. The article mentions a “$2 billion expansion” for the Paramount site that was withdrawn and a “27 million pound ($37 million) grant” from the British government.

2. Indicators for SDG 9 (Industry, Innovation, and Infrastructure)

   • Proportion of industry value added from sustainable industries: The number of operational SAF facilities is an implied indicator. The Reuters analysis provides a clear metric: “only 36 [projects] have materialised” out of “165 SAF projects” announced.
   • CO2 emission per unit of value added: While not explicitly calculated, the article’s focus on reducing aviation’s “2.5% of global emissions” through SAF implies this is a key performance indicator for the industry’s sustainability.

3. Indicators for SDG 13 (Climate Action)

   • Number of countries with nationally determined contributions and long-term strategies: The EU’s SAF mandates and the industry’s “goal of net zero emissions by 2050” serve as indicators of strategies to address climate change.
   • Greenhouse gas emissions: The article mentions aviation’s contribution to global emissions, which is the baseline indicator that SAF is intended to reduce.

4. Indicators for SDG 17 (Partnerships for the Goals)

   • Number of multi-stakeholder partnerships: The Reuters database of “165 SAF projects” announced by airlines serves as a quantitative indicator of partnership formation. The analysis of their status (“23 have been abandoned, 27 are delayed or on indefinite hold”) is an indicator of their effectiveness.

5. Indicators for SDG 8 (Decent Work and Economic Growth)

   • Employment in specific sectors: The number of jobs created or lost in the green fuel sector is a direct indicator. The article provides a specific data point: “35 employees were laid off” at the Paramount refinery.

4. Table of SDGs, Targets, and Indicators

SDGs	Targets	Indicators Identified in Article
SDG 7: Affordable and Clean Energy	7.2: Increase share of renewable energy. 7.a: Promote investment in clean energy infrastructure.	– Percentage of SAF in total jet fuel (e.g., 0.7% this year, goal of 10% by 2030). – Investment amounts (e.g., withdrawn $2B expansion, £27M grant).
SDG 8: Decent Work and Economic Growth	8.5: Achieve full and productive employment and decent work for all.	– Number of jobs lost in the green fuel sector (e.g., 35 employees laid off).
SDG 9: Industry, Innovation, and Infrastructure	9.4: Upgrade infrastructure and retrofit industries to make them sustainable.	– Number of operational SAF facilities vs. announced (36 of 165). – Development of new technologies (HEFA, Fischer-Tropsch).
SDG 12: Responsible Consumption and Production	12.5: Substantially reduce waste generation through reuse.	– Use of waste materials as feedstock (used cooking oil, animal fat, garbage).
SDG 13: Climate Action	13.2: Integrate climate change measures into policies and strategies.	– National/regional mandates (EU rules: 2% SAF in 2025, 70% by 2050). – Industry-wide emission goals (net zero by 2050).
SDG 17: Partnerships for the Goals	17.17: Encourage and promote effective public-private and civil society partnerships.	– Number of partnerships/projects announced (165). – Success/failure rate of partnerships (23 abandoned, 27 delayed).

Source: finance.yahoo.com