Economy and production

Fuel costs account for the largest share of all cost components in an airline's operating costs. If the fossil raw material crude oil is replaced by renewable raw materials, large parts of the plants have to be newly built. SAF will only invest in these production facilities in the long term if money can be earned from the sale of its products. For this reason, aireg is also looking into the economics and production of sustainable aviation fuels.

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Although various pathways are already approved by ASTM to produce sustainable aviation fuels, their broad market implementation is so far still missing (globally and regionally). This is the case although various SAF options have been technically tested and their operational readiness demonstrated in multiple projects. Yet, the production of SAF is limited to very few producers and extremely small quantities. In 2017 the share of SAF in the EU was only about 0.05 % and only 0.1 % on a global scale. Overall, SAF has barely exist in the global aviation fuel markets so far. A global market ramp-up of SAF is hampered by various technical, economic, operational and acceptance-related factors. This virtually non-existent market scale-up is primarily based on a combination of two fundamental factors. These factors being a lack of economic viability of SAF options due to (extremely) high production costs compared to fossil kerosene and (in combination) with a lacking target-oriented regulatory framework.

High SAF Production Costs

The production costs of SAF are so far significantly higher compared to fossil kerosene, although they have near identical technical (us-age) properties. SAF, at present, are about 2 to 5 times more expensive (in some cases considerably greater) than fossil fuels (Fig. 8). While HEFA based SAF, especially from waste oils and fats, are currently still at least twice as expensive as fossil kerosene – but in some cases already available on the market in larger amounts – the price range for other SAF options is even higher.

Therefore, aireg is investigating how the marketability of sustainable aviation fuels can be secured in the long term. The design of an infrastructure for the supply of sustainable fuels and the financing of SAF production facilities are also discussed. Due to the variety of funding and incentive mechanisms for SAF production, aireg also intensively monitors and discusses current regulatory developments at the global, European, and national levels. The position of aireg on the European "Fit-for-55" initiative and the implications for aviation can be found here.