The European sustainable aviation fuel (SAF) market would benefit from a simple, unified mandate, attract more producers to a currently undersupplied market, according to renewable fuel distributor World Fuel Services (WFS).
"As it stands at the moment… demand far outweighs supply [in the European SAF market]," WFS' vice president of land and aviation Matthew Whitton told Argus. "We feel the frustration of our customers. They really want this product and there aren't enough molecules for it."
SAF production globally should reach around 12.3mn t/yr by 2025, based on publicly announced projects. While Whitton acknowledged "intent in the market, all the way from the European Commission right the way through the supply chain to the end users," he was unsure if this will be enough to cater for the growing European demand.
Producer certainty would help financial institutions, Whitton said.
"What they need to provide commercial debt is the confidence that the business will have longevity, and its only with those simplified, unified regulation that businesses can start to plan," he said.
European SAF demand is mainly driven by mandates, and a unified, pan-European mandate would encourage the growth of the SAF market in Europe, WFS said, noting the different approaches in Sweden and France where it has interests.
"Sweden's mandate has a percentage reduction greenhouse gas (GHG) emissions requirement, while France has a volumetric requirement," Whitton said. "If you can start off with a very simple pan-European mandate, everything else flows from that. This includes producers coming to market, financial institutions providing commercial debt, and airlines getting the SAF they want."
WFS supplies SAF to mandated and voluntary markets, but is not a producer. It tends to buy SAF from the largest European supplier, Neste, which produces 100,000t/yr from the Porvoo refinery in Finland, and has recently entered a distribution agreement with the SAF producer.
For mandated markets like Sweden, WFS delivers SAF on a mass balance basis — in one trip, and at a volume large enough to ensure its fulfils its mandated requirement for that country.
"It encourages uptake of SAF, and means we can be as efficient and environmentally responsible as possible in delivering product to market," Whitton said.
WFS also supplies to voluntary markets, like the UK and Germany. But these will not be voluntary for long, as a UK SAF mandate is due to come into force in 2025. An EU mandate is under discussion.
WFS said certified mechanisms — like mass balance or book-andclaim — "would give organisations outside of the airline industry the ability to invest in the SAF supply chain, by purchasing the green attributes that SAF provides." It would encourage more production facilities, more SAF availability, and would be efficient and effective, Whitton said.
WFS tends to supply SAF that has been produced through the HEFA SPK pathway, which uses biogenic feedstocks such as used cooking oil (UCO) as feedstock. This can be blended with fossil jet fuel by up to 40pc, and can use the same infrastructure for fossil jet fuel, like pipelines and storage tanks.
However, he said "while physically comingling the product is fine, we have found from a taxation or customs perspective, or even from the airlines we are selling to, we actually need to maintain a segregated supply chain in certain situations, particularly in voluntary markets." This probably makes the SAF supply chain more difficult to manage.
WFS said power-to-liquid (PtL) synthetic SAF seems to be the "utopia" of the different pathways available, according to its customers, as it uses renewable energy to produce a "truly synthetic fuel." Germany has led the way on production of synthetic SAF.
