Oil giant Shell aims for a sustainable take-off of aviation fuel

LONDON, Sept. 20 (Reuters) – Royal Dutch Shell (RDSa.L) plans to start producing low-carbon jet fuel on a large scale by 2025, with the aim of encouraging airlines around the world to reduce their greenhouse gas emissions.

Aviation, which accounts for 3% of the world’s carbon emissions, is considered one of the most difficult sectors to tackle due to the lack of alternative technologies to jet engines.

Shell, one of the world’s largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from production current total world.

Produced from used cooking oils, plants and animal fats, SAF could reduce aviation emissions by up to 80%, Shell said.

Shell, which currently only supplies SAF produced by others, including Finnish refiner Neste (NESTE.HE), said on Monday it wanted green jet fuel, which can be blended with regular aviation fuel without the need to change aircraft engine, to offset 10% of its global aviation fuel sales by 2030.

SAF accounts for less than 0.1% of current global aviation fuel demand, which reached around 330 million tonnes in 2019, investment bank Jefferies said.

There are several obstacles to market growth, mainly due to the cost of SAF, which is currently up to 8 times that of regular jet fuel, and the limited availability of raw materials.

Shell has said it wants others to follow suit.

“We also expect other companies to add their own production plants to it,” Anna Mascolo, director of Shell Aviation, told Reuters.

The United States said last week that it wanted to cut greenhouse gas emissions from aircraft by 20% by the end of the decade by dramatically increasing the use of AFS.

NEW PRODUCTION

The Anglo-Dutch shell, which aims to reduce the emissions of the fuels it sells to zero by 2050, is undergoing a major overhaul aimed at producing more low-carbon fuels such as biodiesel and FAS, as well as hydrogen.

Shell plans to build a biofuel processing plant at its Rotterdam refinery with an annual capacity of 820,000 tonnes, with SAF expected to account for more than half of production. The plant is expected to start production in 2024. read more

In a new aviation decarbonization report released with Deloitte, Shell called on the industry to reduce emissions to net zero by 2050.

The International Air Transport Association, which represents most of the world’s airlines, aims to halve emissions by then.

It is possible to reduce emissions to net zero by using more low-carbon fuels and offsetting the remaining emissions with carbon credits.

Shell is also developing synthetic aviation fuel made from hydrogen and recycled carbon.

“Sustainable aviation fuel, whether bio SAF or synthetic SAF, remains the most important solution,” Mascolo said.

Reporting by Ron Bousso; Editing by Alexander Smith

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