Welcome to this new edition of the IATA Fly Net Zero update, sharing a short overview of the latest industry developments in January and February on the road to #FlyNetZero carbon emissions by 2050.

If you have comments or wish to share some news, please contact Nicolas Jammes.

CORSIA

The ICAO Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is the only global market-based measure scheme to address CO2 emissions from international aviation. CORSIA’s First Phase kicked in on 1 January. To that effect, IATA has updated its Handbook, which is available here.

SAF

Korean Air Lines announced a partnership agreement with Japanese global logistics company Yusen Logistics for a sustainable aviation fuel (SAF) cooperation program for Cargo. The Civil Aviation Authority of Singapore (CAAS) launched the Singapore Sustainable Air Hub Blueprint in consultation with industry and other stakeholders, which sets out Singapore’s action plan for the decarbonisation of its aviation sector. Cathay announced the addition of three new partners to its Corporate SAF Program. Cathay is also the co-initiator of the Hong Kong Sustainable Aviation Fuel Coalition (HKSAFC), seeking to grow Hong Kong as a regional SAF hub. Japan Airlines (JAL) has signed a partnership agreement with Yokohama City to establish and implement a system for collecting used cooking oil from households for its utilization as SAF feedstock. This is part of the “Fry to Fly“ project and will start mid- March.

In Europe, Neste and Amelia, a French regional airline, have closed an agreement for the supply of SAF. Amelia has been using SAF for all its flights departing from Amsterdam Airport Schiphol since 1 January 2024. Neste also announced that, together with partner companies, they have concluded an E-Fuel research project showcasing progress in the development of electrofuels. Meanwhile, Norwegian has become a co-owner of Norsk e-Fuel, building up on the strategic partnership agreement signed in 2023, with plans to build the world’s first large-scale production facility for electrofuel. SAF technology company Velocys announced that it raised $40m in growth capital, shortly after de-listing from the London Stock Exchange’s AIM market and indicating a need to raise capital to continue operating. Spain’s Cepsa and Apical Group’s Bio-Oils began building the largest second-generation biofuels plant in southern Europe. able to produce 500,000 tonnes of renewable diesel and SAF per year.

IAG announced its largest SAF purchase agreement to date, with e-SAF producer Twelve, which will supply advanced e-SAF made from made from CO2, water and renewable energy. Under the terms of the fourteen-year contract, Twelve will supply IAG with 785,000 tonnes of e-SAF to support its five European airlines. Emirates joined The Solent Cluster, a UK low carbon investment initiative focused on low carbon investments established to reduce CO₂ emissions from industry, transport and households in the South Coast of England. The Solent Cluster has the potential to create a SAF plant with an estimated fuel production capacity of 200,000 tonnes (200 kt) per year.

Canada’s sustainable aviation ecosystem, including airlines, airport authorities, aerospace manufacturers, and industry groups, have written to Finance Minister seeking bold action in the 2024 budget to incentivize the Canadian production of SAF. Also in Canada, Azure Sustainable Fuels Corp., reached milestones in its development of a renewable fuel production facility that could produce approximately 20,000 barrels per day of predominantly SAF with first production targeted for 2027. The Government of Canada also announced a CAD$15 million clean fuels projects across the country, including for SAF.

In the US, United announced that Aircastle, Air New Zealand, Embraer, Google, HIS, Natixis Corporate & Investment Banking, Safran Corporate Ventures, and Technip Energies are now among the 22 corporate partners that make up the airline’s The United Airlines Ventures Sustainable Flight Fund, a first-of-its kind effort to reduce emissions and drive production of SAF through investments in startups, which now exceeds $200 million. LanzaJet opened LanzaJet Freedom Pines Fuels, the world’s first ethanol to SAF production facility. Located in Soperton, Georgia, LanzaJet Freedom Pines Fuels will produce 10 million gallons of SAF and renewable diesel per year. The company also announced a $30 million investment by Southwest Airlines in LanzaJet. As part of the agreement, LanzaJet and Southwest intend to work toward the development of a SAF production facility and collaborate to advance the operations of a corn stover to ethanol technology company in which Southwest is invested: SAFFiRE Renewables. Blue Biofuels Inc. and Vertimass, LLC, have created a partnership to produce SAF and renewable propane and butane (rLPG) as co-products from ethanol.  Sugar Valley Energy aims to produce sustainable aviation fuel (SAF) for the airline industry. The project could produce up to 61 million gallons of SAF annually.

Hydrogen

Swiss explorer Bertrand Piccard unveiled Climate Impulse, his new emission-free project: a green hydrogen-powered airplane to fly non-stop around the Earth, demonstrating how concrete solutions can help build a cleaner and more efficient world. Universal Hydrogen successfully powered a megawatt-class fuel cell powertrain, the largest ever, using its proprietary liquid hydrogen module. Turbotech and Safran successfully completed the first test of a hydrogen-fueled aero gas turbine engine with ultra-high performance regenerative cycle.

Cranfield Aerospace Solutions, Exeter Airport Consortium and ZeroAvia will work closely with the UK Civil Aviation Authority to increase readiness of industry and the regulator for hydrogen fuel, as part of the Hydrogen Challenge Sandbox. ZeroAvia and Verne announced that they have signed an MOU to jointly evaluate the opportunities for using cryo-compressed hydrogen on-board aircraft and for airports.  Airbus, Avinor, SAS, Swedavia and Vattenfall have signed a MoU to investigate the feasibility of a hydrogen infrastructure at airports in Sweden and Norway.

ZeroAvia also announced that it has been awarded $3.25 million in funding by the California Energy Commission (CEC) to develop a first-of-a-kind mobile liquid hydrogen (LH2) refueling truck for heavy-duty applications, including aviation and maritime.

Electricity

???Swedish hybrid-electric airplane maker Heart Aerospace announced it raised a total of $107 million in Series B funding, representing another significant stepping stone toward sustainable regional air travel.  Swissport Italy will invest Euro 11 million in electric vehicles at Rome Fiumicino airport. These include tractors for towing and push-back of long-haul aircraft, passenger buses, baggage belts, cargo loaders, and transporters. Additionally, the fleet of baggage tractors has been revamped, with 50 new electric tractors operational at Fiumicino and another 70 scheduled for delivery before summer.

Airports

Long Beach Airport (LGB) announced the availability of SAF for use by general aviation jets, through Atlantic Aviation, one of two fixed-base operators at the airport.

daa, the operator of Dublin and Cork airports, has unveiled details of 20 environmental sustainability initiatives being rolled out at Dublin and Cork Airports, which will accelerate both airports’ climate and sustainability related ambitions, including achieving net zero emissions by 2050 at the latest. Tallinn Airport has joined the Baltic Sea region (BSR) HyAirport project, which aims to amass knowledge and create conditions for the adoption of hydrogen in aviation. The three-year project involves airports, airlines, research establishments and technology companies in Scandinavia, the Baltic States, Poland and Germany.

Sustainability

IndiGo has partnered with Swedish innovation company Altered, to fit its fleet of aircraft with innovative nozzles that can help reduce on-board water consumption by up to 98%. Cathay Cargo Terminal became the first cargo terminal in Hong Kong to adopt 50% recycled plastic cargo cover sheets for all Export Cargo shipments built up within its terminal, increasing from its current specifications of no less than 30% recycled content.

CDP Environmental Rankings

ANA Holdings. was the only airline group to be awarded an A grade in the 2023 CDP rankings for disclosing actionable, high quality environmental data. CDP’s rankings are routinely used by companies to inform their procurement decisions. easyJet, Ryanair Turkish Airlines and United Airlines all improved their grades from B in 2022 to A- in the 2023 rankings Air Canada, Air France-KLM, IAG, JetBlue, Korean Air, Lufthansa Group and Wizz Air all achieved B grades.

A discussion with… Jonathon Counsell, Group Head of Sustainability at IAG

1. What is IAG’s net zero strategy? Milestones along the way?IAG was the first airline group to commit to net-zero emissions by 2050 and the Group has a clear roadmap to get there. New aircraft and operations, SAF and carbon removals are focus areas. IAG is also an investor in ZeroAvia, pioneers of Hydrogen-powered aircraft. In 2021 IAG was the first European airline group to pledge to use SAF for 10% of all fuel needs by 2030, which will require approximately one million tonnes of SAF a year. This is dependent on appropriate government policy support. It will save as much GHG as taking one million cars off the road per year.

The Group is making good progress towards this commitment and is already one of the largest users of SAF (more than 53,000 tonnes in 2023) and purchased approximately 12% of all globally-produced SAF in 2023.

IAG remains on track to deliver a 100-fold increase in its SAF volumes between 2022 and 2030 and expects to use SAF for 70% of total fuel in 2050. These purchases have been, in part, supported by corporate customers and their purchasing of Scope 3 emissions reductions for their passenger travel and freight movements, most recently IAG announced a major deal with Microsoft. As of 31 December 2023, IAG’s total investment in SAF is $1.0 billion of which 86% is future commitments (Based on assumed jet fuel price of $800 per metric tonne and contracted margins for SAF production.)

Away from SAF and as part of its broader sustainability roadmap, IAG is investing in new and more fuel-efficient aircraft, implementing other fuel efficiency initiatives, and advancing carbon removals to mitigate any residual emissions from its operations.

2. As part of that strategy, how significant is IAG’s recent announcement of an e-SAF forward purchase agreement?As part of an advanced net zero strategy, IAG has signed a significant agreement with Twelve who will supply IAG with 785,000 tonnes of e-SAF (e-SAF made from CO2, water and renewable energy) to support its five European airlines (British Airways, Iberia, Aer Lingus, Vueling and LEVEL). IAG is the first European airline group to announce an e-SAF deal, and the agreement increases its 2030 committed supply from 25% to 33%.

This deal brings the scale-up of e-SAF, produced using power-to-liquid technology, one step closer to reaching its full potential in the aviation industry. This is important because e-SAF does not face feedstock limitations, has a high degree of emissions reduction versus conventional jet fuel and has a relatively low land and water-use footprint.

3. What other SAF purchase agreements does IAG have? Why the need to diversify the supply of SAF?IAG invested in and committed to a long-term offtake to develop what has become the world’s first ethanol-to-SAF production facility – LanzaJet Freedom Pines Fuels. LanzaJet Freedom Pines will produce approximately 28,000 tonnes of neat SAF and renewable diesel per year, meeting US Renewable Fuel Standards (RFS) and CORSIA sustainability standards.

As part of IAG’s sustainability strategy, the group is also investing in projects such as Nova Pangaea Technologies (NPT), an innovative Teesside-based cleantech company in the UK whose technology is a crucial pathway to the production of SAF. NPT’s technology converts agricultural waste and wood residue feedstocks into second-generation bioethanol, which can then be processed into SAF. The initiative was launched to develop cost-effective second-generation SAF (waste and residue-based) for commercial use in the UK and will form an integral part of Project Speedbird, which will use LanzaJet and NPT’s technology to supply fuel for IAG.

Diversification of suppliers, developers, technologies and technology pathways, sustainable feedstocks and geographies is key for supporting the emerging SAF market that is required to decarbonize aviation.

4. How can we address the limited supply of SAF?The shortage of sustainable fuel globally continues to be a problem for the aviation industry although innovative companies like Twelve are an important part of the solution.

The supply agreement with Twelve shows us that the private sector is ready to invest but can only do so with clear policy support from governments around the world, for what is the most challenging sector to decarbonise. IAG would like to see similar projects scale in Europe and look forward to working with governments across key markets to build a SAF industry to deliver jobs, economic growth and a stable supply of SAF.

We need governments to play their part. At EU level, a mandate has been agreed. Mandates only serve to increase demand and what we urgently need is incentives for SAF to drive production at the scale and pace we need. We welcome the provision of 20 million SAF allowances to support airlines in closing the cost gap between SAF and fossil fuel, but we need more allowances to help meet the 2030 6% SAF mandate target.

In the UK, we need the mandate to be legislated.  We welcome the commitment to consult on a revenue certainty scheme but we need this implemented as soon as possible. In the UK, the Government has set a target of having 5 SAF plans in construction by 2025.  It looks like there will be 0 at this rate.