Sustainable Aviation Fuel (SAF) is a rare commodity and 3 to 4 times more expensive than conventional Jet A-1 kerosene. However, those who stock up on significant volumes of the fuel now not only reduce the greenhouse gas emissions of their aircraft but also secure competitive advantages in SAF's upcoming distribution battle. The Franco-Dutch airline has proactively acted accordingly.
Air France-KLM has inked major contracts with Neste and DG Fuels, thus securing a supply of 1.6 million tons of SAF. Its step is in line with the Group’s aim to successively substitute Jet A-1 with SAF, reaching 10% by 2030. First deliveries resulting from the new deal are expected in 2023, and more, similar contracts are to come, the Air France-KLM Group has announced in a release.
However, how much of the now purchased SAF fuel will be allocated to the group’s freighter fleet is currently not known. A company speaker told CargoForwarder Global that "no information is
currently available about the distribution between the various airlines and subsidiaries" [of the AF-KLM-MP Group].
Customers benefit from SAF booking, despite higher costs
These secured 1.6 million tons will avoid 4.7 million tons CO2 emissions between 2023 and 2036, compared to fossil fuel, the airline maintains.
Of this total amount, Finland-based Neste committed to supplying 1 million tons between 2023 and 2030, while Washington-headquartered DG Fuels accounts for 600,000 tons to be delivered from 2027
to 2036.
The airline does not say whether the comparatively more expensive fuel will lead to a hike in passengers' ticket prices. For the cargo sector, it is likely that an increasing number of shippers
and their freight forwarders will book SAF allotments in order to reduce their own environmental footprint.
SAF demand is swiftly rising
Prior to the AF-KLM announcement, both SAF providers struck other important deals helping to accelerate SAF production. SAF is a vital resource needed for aviation to reach its sustainability
goals. On 06SEP22, the U.S. developer DG Fuels signed an agreement with Delta Air Lines for the supply of 385 million gallons. Only weeks before, in June 2022, United Airlines and its corporate
venture firm, United Airlines Ventures, committed to purchasing at least 300 million gallons of SAF over 20 years from the same provider. It followed a contract with Neste to buy up to 52.5
million gallons of SAF for United flights ex Amsterdam (AMS) and potentially other airports, too.
SAF-plus trajectory
In its release, AF-KLM outlines that discussions are currently underway to add more suppliers to its list with the aim of gradually establishing a diversified network capable of meeting global
SAF supply demand. At the same time, the carrier emphasizes that its SAF efforts are embedded in a broader decarbonization trajectory which includes fleet renewal and eco-piloting.
“The contracts we have signed embody our long-term commitment to the development of SAF production capabilities around the world, to the benefit of the industry as a whole,” commented
Benjamin Smith, CEO of Air France-KLM.
SAF comes from selected sources
A statement driven by the awareness that “decarbonization is the biggest challenge the aviation industry has ever faced.” In view of this historic threat, “Air France-KLM is
activating all available levers to reduce its environmental impact,” the executive assures.
And against the backdrop of the food or fuel debate, the airline emphasizes that it has established a strict sourcing policy. This principle commits the carrier to only purchase SAF which does
not compete with human food or animal feed supply, and that does not stem from palm oil.
Heiner Siegmund
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