Buyers clubs can secure more competitive terms than bilateral deals, and are making inroads in the maritime and aviation sectors, writes Pamela Machado
Securing offtake remains the key barrier to progress for hydrogen and e-fuel projects, with producers and buyers struggling to align on the long-term commitments and pricing structures needed to secure financing. Collective procurement schemes, primarily aimed at reducing emissions from the aviation and maritime sectors, are emerging as a potential mechanism to break this deadlock.
Initiatives such as the Sustainable Aviation Buyers Alliance (Saba) and the Zero Emission Maritime Buyers Alliance (Zemba) are playing a growing role in facilitating offtake for e-fuels. They aggregate demand from large corporates seeking to cut Scope 3 emissions — from across a company's value chain — and use this pooled demand to tender for clean fuel use in freight and transport services.
Members of these alliances include multinationals such as Amazon, Ikea, Microsoft and food and beverage firm Mondelez. Through competitive tenders, Saba and Zemba have contracted air and maritime transport providers that are committing to using a share of e-fuels. Member companies pay the premium associated with e-fuel use and will receive the environmental attributes associated with this through certificates issued under a book-and-claim system.
Such collective buying mechanisms are a win-win situation for companies and e-fuel producers, industry participants say. Saba and Zemba members "benefit from the economies of scale associated with a collective procurement model", allowing them to secure more competitive terms than what would be possible through bilateral deals, Center for Green Market Activation (GMA) managing director Andre de Fontaine tells Argus. GMA co-manages Saba, working alongside the Environmental Defense Fund and the Rocky Mountains Institute.
Buyers are also increasingly worried about fossil fuel price volatility caused by geopolitical tensions. Beyond cutting emissions, collective buying can help them "future-proof their supply chains", Zemba chief executive Ingrid Irigoyen says.
Confidence to invest
For producers, aggregated demand offers the scale and duration needed for investment decisions. It provides the "long-term offtake certainty needed to support new supply and attract project financing", US developer Infinium's strategy and solutions senior vice-president, Liz Myers, says. Infinium was recently selected to supply synthetic aviation fuel (e-SAF) through a Saba tender. The arrangements "simplify the offtake process for producers" and offer members a reliable framework that ensures fuels meet certain sustainability standards, Myers says.
Infinium expects to supply e-SAF to American Airlines from 2029, while shipping line Hapag Lloyd — one of the winners of Zemba's most recent tender — plans to burn e-methanol on a transoceanic route from 2027.
Both initiatives also facilitate offtake of biofuels, particularly during initial tenders. But feedstock availability constraints and expectations for potential future price increases prompted a shift in strategy. After Zemba's first tender selected waste-based biomethane as a shipping fuel, the group focused on enabling e-fuels in a second round, because e-fuels offer greater long-term scalability, near-zero emissions and the potential for price reductions as markets mature, Irigoyen says.
Neither Saba nor Zemba receives public funding and financial commitments to offtake must ultimately come from members. For now, Scope 3 emissions reductions remain largely voluntary — although reporting is required in some jurisdictions, including the EU. Collective buying is therefore not a magic formula that will by itself nurture a wider e-fuels ecosystem beyond infancy. But it is already providing a tangible demand signal to developers and has helped to unlock offtake in some cases where bilateral negotiations may have stalled.
