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10 August 2022

Solar Fuels and the same old SAF problems

Heliogen and Dimensional Energy announced on Monday they have entered into a letter of intent (LOI) to jointly produce a type of sustainable aviation fuel (SAF) from concentrated solar power (CSP), green hydrogen and carbon captured from the air in order to enable the rapid decarbonisation of the aviation history.

Solar fuel, as the industry calls it, is kerosene produced using the Fisher-Tropsch process from carbon and hydrogen generated from chemical reactions that make use of the heat coming from CSP.

The hydrogen will be produced leveraging the successful demonstration of Heliogen’s CSP as part of its collaboration with Bloom Energy, a solid oxide electrolyzer cell (SOEC) designer based in San Jose, California. The SOEC requires around 980°C which is where Heliogen comes in. Heliogen claims that it has achieved temperatures greater than 1000°C through its CSP technology. Whether Heliogen will also provide green electricity from CSP for use in Bloom Energy’s SOEC is unclear, but we believe that Bloom Energy needs to find an alternative to natural gas or coal generated electricity in order for the hydrogen produced to be considered green and in turn for the solar fuel to fall under the SAF umbrella.

Dimensional Energy, a sustainable fuels company, developed a process that captures carbon dioxide and water vapour from air, which are then subjected to different chemical reactions to form carbon monoxide and hydrogen. Lastly, the Fisher-Tropsch process yields hydrocarbons from these base products.

The LOI includes a goal of building a fully integrated 40 gallons per day drop-in ready solar fuel. The parties expect a demonstration project to be the first step towards the development of a pipeline that will output around 130 million gallons of fuel over the next ten years.

This news comes a few months after it was announced that United Airlines invested in Dimensional Energy as part of its strategy to reach net zero by 2050. The deal will see United Airlines purchase at least 7 million barrels of solar fuel over 20 years.

This novel approach of facilitating SAF has its benefits, but the question still remains, can it be done at scale? Taking carbon dioxide out of the atmosphere to produce hydrocarbons is great but putting it back when burning the fuel, not so much. Yes, it does decrease the dependency of the aviation sector on fossil fuels that would otherwise have to be extracted out of the Earth, a process that creates fugitive emissions. The idea has the potential to close the carbon loop and at least slow down the rate at which companies keep borrowing from the available carbon budget.

All the projections around solar fuels and SAF point towards the 2030s for scaled manufacturing. At the same time Airbus has promised to release a hydrogen plane by 2035, but in the meantime Rolls Royce is building its UltraFan engine to run on SAF for delivery in 10 years’ time. All these vastly conflicting commitments show the confused state of the bulk of aviation companies around what they each see as the “right” route to decarbonize aviation.

In a best-case scenario for the SAF narrative, technologies will be developed and deployed to gather methane and other forms of hydrocarbons from waste or air, heat from CSP and hydrogen from electrolysis, all at scale, which is a big caveat.

At the moment, there is a huge gap between the 300 million gallons that United will buy over a 20-year period and the 2.7 billion gallons that it used in 2021. The same goes for all other airlines and SAF manufacturers. Lufthansa recently committed to a similar deal with Shell for 50 million gallons over a seven-year period.

According to the International Air Transport Association, the expected amount of SAF required for achieving the net zero target needs to reach 100 billion gallons per year in 2050, levels of consumption similar to current annual demand of kerosene. This means that the industry will emit the same amount of carbon in 2050 that it does now with upstream emissions from fossil fuels eliminated and some collection of carbon from sources that would otherwise have released into the atmosphere anyway for a net negative outcome. The aviation industry contributes about 3% of global emissions, so what percentage of these will existing upstream emissions represent?

SAF simply can’t fully decarbonize this industry, which will find itself in 15 years unable to reach zero emissions by 2050. The trick here is not to under develop a hydrogen strategy which seems to be the only thing that can cut emissions for real. We will be addressing hydrogen, SAF and other issues in our upcoming aviation market forecast.