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From a quick look at climate headlines, it’s hard to miss that the global aviation industry poses a knotty problem. Today, jet planes contribute around 2% of global emissions—a share which is expected to grow rapidly in the coming years. In response, activists have launched no-holds-barred campaigns to stop people from flying.
With all the attention around just how damaging the industry is to the environment, it may come as a surprise that the technology already exists to dramatically cut those emissions. It’s called sustainable aviation fuel (SAF). The problem is that it’s two to four times as expensive as regular fuel.
Because SAF is so expensive and bringing it to market is so complex, companies that normally face off as competitors are now collaborating to grow usage of the fuel. On Tuesday, United Airlines announced a doubling down in efforts to chip away at this problem. Eight new partners will join the company’s Sustainable Flight Fund, first launched in February, which invests in companies working to cut the industry’s carbon footprint. Significantly, the group now includes rival carriers JetBlue and Hawaiian Airlines as well as other companies in different places in the aviation value chain like Aramco Ventures (a maker of jet fuel) and the Boston Consulting Group (a big buyer of air travel).
“We're building a consortium of strategic companies around the world to change aviation, to decarbonize aviation,” says Michael Leskinen, president of United Airlines Ventures. “It's going to take a consortium.”
It’s a logic that companies, civil society, and even governments are increasingly pushing to accelerate the energy transition in some of the trickiest areas. Many of the technologies we need for a low-carbon economy already exist. Partnerships between companies—customers, competitors, and suppliers—help bring them to market much faster than they would otherwise.
Since the dawn of the jet age, airlines have relied on kerosene-based jet fuel to power planes. The fuel has a number of characteristics that make it desirable—from its viscosity to its cost—but it has one big disadvantage: it spews a lot of carbon. A single person’s emissions on a round trip flight from New York to London in business class can easily result in more than 3,000 pounds of carbon pollution, nearly equivalent to the annual emissions of the average person living in India.
SAF, on the other hand, is an umbrella term for lower-carbon fuel alternatives. And it can come from a range of sources, including algae, agricultural residue, and even trash, like recycled cooking oil. SAF can also refer to power-to-liquid technology where renewable energy is used to make hydrogen which then is combined with carbon to make a sustainable jet fuel.
Different types of SAF deliver different levels of emissions reduction. Indeed, research suggests that some crop-based fuel sources may deliver only limited emissions benefits when you consider indirect emissions from degrading land. At the other extreme, power-to-liquid technology could, in theory, make SAF a zero-carbon fuel source. But power-to-liquid SAF is not currently on the market at any scale and would require significant investment and development to become a reality. Other SAF sources fall at various points in between the extremes in terms of their emissions reduction potential.
Crucially for the industry, all types of SAF are “drop in” fuels that can be used in the existing plane engines and with much of the existing infrastructure. Other low-carbon aviation solutions—think of electric airplanes—would require a costly re-outfitting of aviation infrastructure across the globe, among other challenges.
There’s just one big problem: SAF costs far more than conventional jet fuel. Right now, available SAF costs two to four times as much as conventional jet fuel. And there simply isn’t enough of it produced to make a meaningful dent in airline emissions. Just 0.1% of aviation fuel today is a SAF product, according to data from the International Energy Agency. Any airline, fuel blender, or airport that jumps headlong into sustainable aviation fuel would raise the costs for customers and risk losing competitive advantage.
That’s where efforts like the Sustainable Flight Fund aim to help. United’s announcement brings the size of the fund to $200 million, but Leskinen acknowledges that the dollar amount is less important than the nature of the collaboration. The investment partner companies meet regularly to discuss SAF companies in the pipeline, each bringing expertise from their area of the value chain. The collaboration also gives the other partners the opportunity to invest individually, which can quickly increase how much funding a given portfolio company receives.
And, beyond equity investments, the consortium provides quick access to commercial agreements that help the new companies take off. In addition to investing in a business, United might, for example, agree to purchase its SAF, offering the company a reliable source of revenue as it looks for other investors.
Many activists, however, take issue with SAF and brand it as a fig leaf for the industry’s giant environmental footprint. After all, the aviation industry will remain a significant source of carbon emissions for the next several decades even in the most optimistic scenarios. And, of course, United is marketing its sustainability commitments today—in its in-flight entertainment and on posters in the airport—even while SAF currently provides only a tiny fraction of its fuel.
But that’s not to say the effort isn’t meaningful. Much discussion about innovation to tackle climate change centers around how to advance future, far-off technologies. In the case of aviation, think of hydrogen airplanes or perhaps even replacements to aviation like Elon Musk’s fantastical hyperloop. Partnerships aimed at actually deploying existing technologies can also represent an important innovation. And United’s fund is far from alone. The Clean Energy Buyers Association represents dozens of big companies looking to purchase clean energy and facilitates companies working together to make it easy. The First Movers Coalition connects companies that can make low-carbon products—think of steel and cement—with other companies willing to pay a small premium for them at first, thereby creating the demand to quickly grow the market.
Leskinen insists that the effort to scale SAF “has to be for profit.” And, of course, any company participating in a private sector collaboration will ultimately aim to return profit to shareholders in some way. But, even still, the cross-competitor partnership is a reminder that the climate challenge demands doing things differently. “We cannot do it alone,” says Leskinen.
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Write to Justin Worland at email@example.com