The aviation industry is confronting the challenge of decoupling growth from environmental impact. Trillions of euros of new investment will be required to fund the required transition to new-technology aircraft with lower emissions, to ramp up the supply of sustainable aviation fuel, and to explore new designs that pioneer alternative energy sources.
Sustainable aviation fuel (SAF) is made from renewable sources and has the potential to reduce greenhouse gas emissions by up to 90 per cent when compared to conventional fossil fuels. It can be used in existing aircraft technology and be delivered through the current airport infrastructure, thereby avoiding the need for huge additional investment to replace equipment.
SAF is the single largest factor in aviation’s path to Fly Net Zero by 2050, and European legislation requires the proportion of SAF used by airlines to increase to 70 per cent of all jet fuel supplied in EU airports by 2050.
Currently, the SAF industry is in its infancy, with limited supply available and a cost that is multiple times that of conventional jet fuel. This makes scaling up levels of SAF production a matter of urgency, and one that is a potential opportunity for Ireland.
The opportunity lies not just in decarbonising the environmental footprint of aviation traffic in and out of Ireland, but also in the potential jobs and economic contribution the development of SAF production could bring.
Unlike many European countries Ireland lacks any roadmap for SAF production, and risks falling behind its peers
A recently published study – Ireland’s Sustainable Aviation Fuel Opportunity – seeks to quantify this opportunity and details how policy needs to evolve to make it a reality. While the path ahead will be challenging, the study estimates that by 2050, Ireland has the potential to develop an SAF industry generating revenues of over €2.5 billion and providing up to 1,000 high-skilled jobs.
This feasibility study into the potential production of SAF in Ireland was produced by SkyNRG and SFS Ireland, in a partnership supported by aircraft leasing companies Avolon and Orix Aviation, and manufacturer Boeing.
In Ireland, there is currently no domestic production of SAF. This is despite the fact that airlines operating here will need it to meet their EU regulatory requirements. In 2019, the Irish aviation industry consumed 1.2 million tonnes of jet fuel, but unlike many European countries Ireland lacks any roadmap for SAF production, and risks falling behind its peers and being forced to rely on imported fuel to meet our requirements.
The biggest opportunity lies in Power to Liquid (PtL) production of eSAF, a synthetic fuel produced by combining green hydrogen (extracted through electrolysis from water using renewable energy) with CO2. The science underpinning this technique is proven, but the ability to produce eSAF at scale is far from straight forward.
You need large volumes of renewable energy to power the electrolysis that can produce hydrogen, and this is going to require high levels of investment in offshore wind energy, and in the onshore production and transportation facilities to make the SAF, which will ensure it can be delivered to the right locations in large volumes.
This is an industry where technological innovation is necessarily slow due to the high levels of regulation, certification, and safety standards
The good news is that Government initiatives are stimulating higher levels of offshore wind energy production that will put the country in a much stronger position to develop a domestic SAF industry. For the industry to flourish, it will take collaboration between Government and industry stakeholders to create a policy environment to stimulate and support the billions of euros of investment that will be required to make SAF production at scale a reality.
Mechanisms to incentivise investment will be required, with tax credits and capital allowances – perhaps following similar models such as the Employment Investment Incentive and Start-up Capital Incentive schemes – helping to make business cases viable.
Ireland’s high-quality third-level institutions, along with state entities like Enterprise Ireland, Science Foundation Ireland and the SEAI, could play an important role in the funding and promotion of SAF technologies. They can also form part of a network of collaboration between the private sector and Government to drive forward a supportive policy framework.
We also need to see SAF included in climate action plans and referenced in relevant government legislation. There is no doubt that the Government is supportive of mechanisms to help decarbonise the transport sector, but there needs to be more focus on SAF as a key element of the solution for the aviation industry, upon which our island nation is so reliant to maintain vital global connectivity.
SAF is the single largest factor in aviation’s path to Fly Net Zero by 2050
The industry is acutely aware that huge progress needs to be made to reshape the future of aviation to reduce its environmental impact. Unfortunately, it is also important to recognise that this is an industry where technological innovation is necessarily slow due to the high levels of regulation, certification, and safety standards. It is also one where the asset base is measured in the trillions of euros, meaning that carbon abatement can only happen over a period of time.
The partnership that we have supported to explore this opportunity reflects the ambition of all involved to be at the forefront of sustainable innovation that will change the aviation landscape. We hope that with Government support, we can go on this journey together.
Andy Cronin is CEO of Dublin-based aircraft lessor Avolon
