Despite being a hard-to-abate sector, aviation has a clear decarbonisation pathway. All measures must be deployed to reach net-zero emissions, but sustainable aviation fuel (SAF) is the most viable solution that can be scaled by 2050.
For SAF to replace conventional fuel, new production technologies and facilities must be developed. Consequently, SAF is expensive. If current and potential producers are to secure the level of investment necessary to increase supply, SAF demand must be resolute.
However, airlines alone cannot currently afford SAF at scale. This creates a chicken-and-egg scenario, with insufficient demand to ramp up production to the scale needed to bring costs down. As a result, SAF accounts for less than 0.1% of all aviation fuel today.
Enter Avelia, a new platform aimed at helping to jumpstart the SAF market by enabling business travellers and airlines to share the cost while getting credit for the associated carbon reductions. Launched last month by Shell, Accenture, and American Express Global Business Travel (Amex GBT), Avelia is one of the world’s first blockchain-powered digital SAF book-and-claim solutions for business travel.
“The truth is the aviation industry is global. And if there is a task, a challenge, something very costly, we need to overcome it jointly,” said Jan Toschka, President of Shell Aviation, as part of the Avelia launch panel discussion held on the eve of IATA’s annual general meeting in Doha, Qatar.
“So our task is to find ways, to find vehicles, platforms, which allows corporate flyers to co-fund for SAF, which then helps the airline to buy more SAF, which then helps us to invest in more production capacity. And this is where Avelia comes into the picture,” Toschka said.
SAF is a fully industry-compliant fuel made from alternative feedstocks to crude oil, such as waste cooking oil, non-food crops, or agricultural waste. With technologies like electric and hydrogen-powered planes still in the early phases of development, SAF is the most viable solution to reduce air travel carbon emissions today.
Avelia’s scalable co-investment model allows companies to jointly fund the cost of SAF, seen as a crucial step to increasing SAF supply. An industry-accepted carbon accounting mechanism, like book-and-claim, is key for such programmes to credibly grow. Avelia is one of the largest SAF book-and-claim pilots at launch, offering 1 million gallons of SAF – enough to power nearly 15,000 individual business traveller flights from London to New York.
“To date, airlines have been the only customers of sustainable aviation fuel, because airlines are the ones that actually burn the fuel. And this is different because now business travellers are recognising the opportunity that they have to get involved,” Nora Lovell Marchant, Vice President of Global Sustainability at Amex GBT, told the panel.
Avelia aims to build the credibility of the book-and-claim model by using blockchain technology to ensure that companies and airlines that buy SAF can get credit for its environmental attributes while avoiding issues such as double counting.
“It's all about trust and transparency and traceability,” said Wytse Kaastra, Sustainability Services Europe Lead for Accenture.
“In order to be sure that, as an airline or as a corporate, you buy sustainable aviation fuel, it's very good to know where it's produced, what all the transactions in the value chain have been, and to which accounts you can get the credits. And actually this open, transparent platform provides exactly that,” Kaastra said during the discussion.
Lauren Uppink, Head of Aviation, Travel and Tourism for the World Economic Forum, told the panel that hundreds of billions of dollars of investment are needed in the coming years to scale up SAF production.
“We have to find ways to … synchronize the supply and demand,” Uppink told the panel. “We're really looking to harmonise and standardise a way of accounting for SAF credits that will help us to scale, so that people feel like they're getting the legitimacy, the traceability, the environmental integrity associated with purchases of SAF to reduce their emissions.”
According to Suzanne Neufang, Chief Executive of the Global Business Travel Association, there is growing demand for sustainable business travel options and that Avelia gives businesses confidence that their actions will have an impact.
“We know that it matters a lot for decarbonising for corporates to get credit for what they are doing. And that has been a key barrier as well. They can't raise their hand and say, ‘I will buy it,’ if there's not a proof along the record for them to be able to claim that credit,” said Neufang.
Andy Wong, the General Manager of Corporate Affairs for Cathay Pacific Airways, explained another reason why the Hong Kong-based carrier is the first to partner with the Avelia platform.
“For us, it's actually used to build awareness in our part of the world,” said Wong. “We use this to educate the market and also to educate the government that this can work. There's a roadmap, so please join us."