End Users
CAAFI’s Role
CAAFI® seeks to support the development of Sustainable Aviation Fuel (SAF) supply chains to provide reliable, sustainable, cost-competitive SAF to aviation end users. CAAFI works to facilitate direct engagement between airlines and fuel suppliers to achieve mutually-beneficial offtake agreements. CAAFI works with airlines and airport partners to identify logistical challenges associated with enabling SAF access to existing fuel distribution and delivery systems.
Current Status
Current and Projected U.S. and Global Jet Fuel Market and SAF Demand
The FAA tracks and forecasts total jet fuel consumption in the U.S. via an annual report, FAA Aerospace Forecasts. Annually, over 20 billion gallons of jet fuel are consumed in the U.S. and on the order of 100 billion gallons globally and is expected to continue to rise through 2050 based on the EIA International Energy Outlook 2023. During that same period, a number of SAF mandates and renewable energy requirements are anticipated to start or expand, including the ICAO Carbon Offsetting and Reduction Scheme for International Aviation, a global emissions reduction requirement, and regional or national mandates from the EU and many individual countries. For a current list of SAF-related policies, please see the ICAO Environmental Policies on Aviation Fuels dashboard. Jet fuel demand is large and growing, providing an attractive domestic and global market opportunity. As policies and mandates are implemented and expanded specifically for SAF, the opportunities for SAF will likewise grow.
Current Airline Interest and Offtake Agreements
To fulfill growing demand, the aviation sector is ready and willing to enter into offtake agreements for cost-competitive, sustainable aviation fuels (SAF), as evidenced by the over 200 million gallons of offtake agreements already in place. Interest in SAF is in part driven by sector-wide, international consensus through IATA and ICAO on the goal of achieving carbon neutral growth starting in 2020 and net zero carbon emissions by 2050. The aviation fuel marketplace is a highly concentrated one, with a limited number of key fuel purchasers from each of the major airlines. CAAFI works with these entities to facilitate communications and agreements with sustainable AJF suppliers.
Key Topics
Doing Business with Airlines
CAAFI has worked closely with sponsor Airlines for America’s (A4A) Energy Council to develop a Guidance for Selling Alternative Fuels to Airlines. The document outlines why airlines are interested in SAF and describes airline requirements for purchasing SAF, including reliability, cost-competitiveness, and environmental performance/sustainability. The document also explains the ways in which airlines might be willing to support SAF deployment and production, including long-term offtake agreements, product delivery flexibility, cooperative purchases, and equity investments, among others. A description of key elements of an agreement term sheet are also included.
The International Air Transport Association (IATA) has also developed an Aviation Fuel Supply Model Agreement that can help prospective fuel producers understand the potential elements of an agreement and can streamline the agreement development process.
SAF and Airports Opportunities
In general, airlines, not airports, purchase jet fuels, and the primary driver for uptake acceleration is contracting between the airlines and SAF producers/suppliers. However, at any given large airport, there is usually only one fueling system for all airlines. Thus, although airlines purchase their fuels separately, all fuels are generally incorporated into a single fuel pool that is stored and distributed throughout the airport. Airports can facilitate SAF uptake by identifying opportunities to incorporate SAF deliveries, handling, and distribution into airport operations. Challenges exist integrating SAF into the existing transport and distribution systems. Find out more in CAAFI’s R&D Team’s white paper: Refinery to Wing: Transportation Challenges Associated with Alternative Jet Fuel Distribution.
Blending and Tracking Fuel
There are two ways SAF can be delivered to the end-user:
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Blended with petroleum-based jet fuel prior to arriving at the airport
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Neat (not blended)
SAF is currently qualified and approved for use in existing jet fuel infrastructure as blends only. Therefore, if SAF is delivered to the airport neat, it must be blended on-site before going into the aircraft, which may require dedicated blending tanks or other infrastructure.
In addition, the airport would need to ensure that blend levels do not exceed the ASTM specification for that fuel. How the industry best handles blending requirements as commercial deployment scales up is an open question.
