Clearing the Air: How a Buyers Alliance Is Creating Clean Jet Fuel
By uniting corporate buyers, RMI and strategic philanthropy are helping a market for clean jet fuel take off
Key Insights
- Low-emissions aviation fuel is available now and is critical to reducing aviation emissions, but existing supply will not grow if suppliers cannot connect with customers.
- With philanthropic support, RMI and partners launched a system for accounting for sustainable fuel and a buyers alliance to bridge the gap between buyers and suppliers.
- This type of partnership allows new low-carbon products like sustainable aviation fuel to achieve economies of scale and compete with traditional, emissions-intensive counterparts.
Air travel accounts for nearly 2.5 percent of today’s global carbon emissions, and the main culprit is the fossil fuel used to power aircraft.
Innovative fuel suppliers have demonstrated that sustainable aviation fuel made from waste can safely power today’s aircraft. So why hasn’t the switch happened yet?
Even with exciting advancements in battery- and hydrogen-powered aircraft, today’s planes — and a large portion of the future aircraft fleet — are dependent on burning liquid fuels. Sustainable aviation fuel (SAF), often in the form of biofuel (fuel derived from biological sources, like inedible waste cooking oil), can be used in today’s aircraft and has the potential to reduce the carbon intensity of flying by more than 80 percent. However, due to insufficient supply, cost barriers, and difficulty predicting demand, SAF currently represents less than 0.1 percent of the aviation fuel burned globally.
Shifting to these new methods is challenging and expensive. Making changes affects a large, well-established system. That’s where RMI comes in. The organization was made to tackle difficult, systems-level challenges, and aviation is a leading example where we are uniting corporate partners to support such a change.
How You Can Help
We need big ideas to shift to clean energy and bold partners who support our mission to make it happen. With your support, we will fuel a sustainable future for air travel.
Sustainable aviation’s chicken-and-egg problem
Like other green products, SAF faces a chicken-and-egg paradox. Producing sustainable aviation fuel requires a significant up-front investment and relies on supply chains that are not yet efficient or well-coordinated, which forces suppliers to charge higher prices than fossil-derived jet fuel. Unsurprisingly, this makes it harder for SAF to compete with traditional fuels.
Many companies have committed to reducing their organization’s emissions from air travel, but few options exist. High costs and low availability mean that they can’t launch their own flights fueled with SAF. For suppliers, scattered demand from individual companies does not justify ramping up production.
That’s where RMI and strategic philanthropy are stepping in. With our experience in clean energy buyers alliances, RMI understands the power of aggregating demand.
What is a buyers alliance?
Buyers alliances organize corporate demand for cleaner, more sustainable products like clean electricity, sustainable aviation fuel, sustainable steel, and much more. They allow both buyers and sellers to achieve economies of scale and show suppliers that there is reliable demand for these products. These kinds of innovative collaborations are in RMI’s DNA. In 2015, RMI established the Business Renewables Center, focused on bringing together corporations and other large energy customers to source clean energy and share lessons learned in the effort to grow the clean energy market. In 2019, this center spun out into the successful Clean Energy Buyers Association (CEBA), a membership association for energy customers seeking to procure clean energy across the United States and the world.
The solution: an alliance of aviation customers
Nearly every company that moves people or products contributes to emissions from flying, and many of these companies also have sustainability goals that include reducing these emissions. Some had expressed to RMI and our partners that they needed a way to reduce emissions from their air travel. RMI and our partners at the Environmental Defense Fund (EDF) reached out to these businesses with a bold idea: join forces to spur a market for sustainable fuels and show suppliers that there is a real demand. EDF, the Center for Green Market Activation, and RMI, with support from ENGIE Impact, brought together nine founding companies to form the Sustainable Aviation Buyers Alliance (SABA). Our goal: help bridge the gap between suppliers and customers and show the market that demand for SAF exists. Nine companies made initial philanthropic grants that allowed RMI to build the digital infrastructure required for scale, such as SAF sustainability procurement guidance and a credible registry to account for and track claims of emissions reductions. Philanthropic funding allowed RMI to bring independent diligence and credibility to the process and build a system that can sustain itself through memberships. SABA was able to use this infrastructure to support many of the original nine companies with the first aggregate purchase of SAF certificates.
What are SAF certificates (SAFc)?
Major corporations that fly employees and goods around the world are urgently seeking ways to reduce the climate impacts of air transport. Emissions from travel, part of the “Scope 3” emissions in corporate emissions accounting, often represent the lion’s share of a business’s carbon footprint. SAF certificates allow companies to purchase verified and auditable emissions reduction claims that correspond to a specific amount of sustainable aviation fuel used in place of conventional jet fuel, which can then be used in their climate disclosures. These SAF certificates can be issued and retired in their name on the registry. Purchase of the certificates spurs fuel producers to invest in SAF production by sending a strong demand signal and creating a secondary value stream.
The SAF certificate framework accounts for and tracks the emissions reduction from sustainable fuels. This allows an emissions-minded buyer anywhere in the world to purchase the certificate for emissions reduction, while the actual fuel can be delivered where it is most practical to use. While not yet codified into greenhouse gas accounting rules, RMI believes purchasing SAF certificates will allow a company to claim credible emissions reductions from reduction activities taken within the aviation value chain.
In this way, even though the companies purchasing SAF certificates don’t directly buy the fuel or send their cargo on flights that use specific volumes of SAF, their purchase reduces emissions in the aviation system and contributes to the market for further SAF development. This type of partnership is what allows low-carbon products like SAF to compete with traditional, emissions-intensive counterparts.
Today, SABA is supported by membership fees, has recently completed the largest aggregated SAF certificate transactions to date, and is working to develop more impactful procurement options for members. Philanthropy made this happen. By leveraging donor support, we removed early uncertainty from the system and allowed RMI to build the business case for a self-sustaining market.
Aviation charts the flight path to the future
Aviation’s success can illuminate pathways to reducing emissions for other heavy industries like shipping, trucking, and steel. Building on this work, RMI helped develop the registry used by the Zero-Emissions Maritime Buyers Alliance, and we are building new coalitions that include the Sustainable Steel Buyers Platform and ZEROGrid, a coalition focusing on clean energy to support grid reliability. A collaboration to advance sustainable cement and concrete will be forthcoming. In all these sectors, we will continue to organize corporate action as a critical headwind for cleaner products and energy.
These market signals are just the beginning for these ambitious buyers’ platforms, and more purchase agreements are planned in the coming months. Demand aggregating organizations like SABA will continue to bring together buyers as markets mature, scaling the demand signal needed to spur growth in the supply of lower-carbon products, and making lower-carbon products comparable in cost to traditional products. At RMI, we know that change can’t happen alone, but even the heaviest lift can be achieved when we band together.
