International Airlines Group (IAG) has signed a 10-year e-SAF purchase agreement with producer Infinium. How is e-SAF different from SAF? It all comes down to the feedstock, which is exactly where the advantages and, unfortunately, disadvantages come from.
The traditional pathways of SAF production include biologically sourced feedstock in the form of used oils and fats or municipal and agricultural waste. This is the main hurdle that SAF faces as production to scale would involve a significant supply chain effort by the aviation industry.
The proposition of e-SAF bypasses any biogenic feedstock by sourcing the carbon element with the help of Direct Air Capture (DAC) technology, which is one of the clean technologies that is lagging behind the most. Hence the pros and cons of e-SAF.
When we consider the long-term potential of e-SAF, we have to take into account the scale of the industry. Around 100 billion gallons of kerosene are being used per year, with projections only pointing upwards. If waste, which we know the world has too much of, is not a safe bet when it comes to a scaled up industry and supply chain, should the industry rely on big fans purifying the air and collecting carbon dioxide?
It may seem like ‘alchemy’ as CEO of Zero Petroleum, Paddy Lowe, labelled it, but it’s far from the magical solution the sector is still looking for.
Additionally, if all of this work is meant to align with carbon-reduction across all industries, will DAC have anything to pull out of the atmosphere in 2050?
IAG and its airlines – Aer Lingus, British Airways, Iberia, LEVEL, and Vueling – are advancing in the e-SAF market. Californian producer Twelve joined IAG’s Hangar 51 accelerator in 2020, leading to a 14-year agreement for 260 million gallons (785,000 tons) of e-SAF. Deliveries start in 2025, aiming to significantly decarbonize aviation.
There are about 11 companies working in the e-SAF space with around half waiting for FID on a first manufacturing plant in 2025, or 2026.
European Union (EU) regulators require e-SAF blending in aviation fuel. Germany leads with a 0.5% mandate by 2026, 1% by 2028, and 2% by 2030. The UK targets 0.2% by 2028, increasing to 3.6% by 2040. Under ReFuelEU, EU states must achieve 1.2% by 2030, 5% by 2035, and 35% by 2050.
Transport & Environment (T&E) identified 56 SAF projects in the EEA, including 36 industrial and 20 pilot projects, but none have reached a final investment decision (FID) due to early-stage development.
Producing 50,000 tons of SAF annually requires €1 billion investment, and Arcadia eFuels CEO Amy Hebert estimates 10 large projects must secure FID by 2025 to meet EU mandates but the main challenge is securing a 12-year offtake agreement.
Additionally, producing SAF demands vast renewable electricity, with the EU’s 2050 SAF mandate requiring 11% of projected renewable supply. EU rules stipulate that plants must operate in areas with over 90% renewable grids or generate equivalent renewable energy, limiting locations to Iceland, Norway, and parts of Sweden – this is only in the case the plant needs a grid connection and is not decentralized with its own generating assets.
IAG’s Leigh Hudson highlighted the difficulty of sourcing additional renewable electricity without impacting grid supply. Hebert proposed easing restrictions to 80% renewable grids for initial plants to unlock projects in other EU countries, avoiding high costs of building solely in Iceland or Norway. This flexibility, coupled with direct support and revenue certainty mechanisms, could accelerate progress toward EU SAF goals.