Jet set go 4 contest crack#
The Platts FOB Singapore jet fuel/kerosene crack spreads against front-month Dubai swaps averaged $30.88/b Sept. Lucrative jet fuel cracks are disincentivizing investments toward SAF, sources said.
Jet set go 4 contest upgrade#
Many refiners are also not yet incentivized to upgrade their production toward SAFs, a regional trader said. "So SAF is still far away for most of Asia, unless the government enforces some regulation for it, that we currently don't have," he said. Many airlines are already struggling with high jet fuel prices, a Southeast Asian importer said. In Asia, Japan and Singapore are among the few countries making a stride in this direction, while many others were still assessing plans amid limited feedstock availability, sources said separately. "So, in reality, what enables many airlines at the moment to use SAF is that they are basically collecting the money and funding the SAF premium from their own end-customers, including companies with business travel activities or cargo shippers, who want to reduce their own carbon footprint and this funding then enables the airlines to procure their SAF," Jauhiainen said. "But if they are defined too narrowly, there is a risk that the competition focuses on fewer raw materials and then due to the scarcity, the cost of those increases," he added.Īirlines operate in a competitive market that makes it difficult to voluntarily substitute fossil jet fuel with SAF, particularly if their competitors are not doing so, Jauhiainen said. Robust sustainability standards that establish a kind of minimum threshold around what can be used for SAF production and what cannot are also required, Jauhiainen said. "If there is very little certainty of what feedstock can be taken, if you have very little certainty to plan your feedstocks supply chain, and even if you get all this right, you don't really know where your product can be sold, which country, which regulated market, then that stalls down the entire investment," he said. "If you invest in a bio-plant and let's talk first generation only to keep it simple, then you probably need well above a billion dollars," Toschka said. "With similar incentives for SAF, we could see 30 billion liters available by 2030."įeedstock clarity and certainty were also vital aspects to hasten the uptake of SAF. As a result, clean energy solutions are now cheap and widely available," Willie Walsh, IATA's director general said at the time. Incentives to transition electricity production to renewable sources like solar or wind worked. "Governments don't need to invent a playbook. The IATA in a statement in June called for governments to urgently put in place large-scale incentives to rapidly expand the use of SAF. The initiative, which forms part of the EU's Fit for 55 in 2030 package, includes obligations on fuel suppliers to distribute SAF to encourage its uptake by airlines. Regulatory visibility undoubtedly benefits the SAF industry, Sami Jauhiainen, vice president APAC Renewable Aviation at Finland's Neste said at the same event, noting that the EU's ReFuelEU Aviation initiative was one such example.
While SAF-related mandates might work better in some parts of the world than the other, "a mandate per se does not work" as the momentum must be at a level which is almost agreed globally, Toschka said. "The ambition needs to be set globally and that depends on the various regions, governments, regulators, and how they want to implement it," Toschka said. This landmark decision brought the industry in line with the Paris Agreement's 1.5 C goal. In October 2021, the International Air Transport Association member airlines committed to achieve net-zero emissions by 2050. SAF is seen as a key pillar in decarbonizing aviation - one of the hardest sectors to abate - and deliver the performance of conventional jet fuel but with a significantly smaller carbon footprint on a life cycle basis. Prior to COVID-19, international aviation accounted for about 2%-3% of global carbon emissions. I think what is crucial is that the sooner, the better," Jan Toschka, president, Shell Aviation, said at the Asia Pacific Petroleum Conference 2022. Receive daily email alerts, subscriber notes & personalize your experience.
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