Airline chiefs have hit out at EU and UK leaders over their failure to firm up financial support for sustainable aviation fuel (SAF) production.
They point to the US Inflation Reduction Act (IRA) of 2022 which will direct almost $400 billion in federal funds towards ‘clean’ energy, including SAF production, and argue Europe has failed to respond.
Speaking at the Airlines for Europe (A4E) summit in Brussels, Ryanair group chief executive Michael O’Leary said: “The market will not supply SAFs at a meaningful price and in meaningful volumes. There has to be government intervention.”
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He insisted: “We would all use SAF. But the SAF we can obtain between now and 2024 will be less than 1% of our fuel. How do we increase the amounts available?
“I don’t need an environmental incentive. I’m all over it [fuel efficiency] like a rash. But the infrastructure isn’t there. The incentives aren’t there. Europe is asleep at the wheel.”
Lufthansa group chief executive Carston Spohr agreed, telling the summit: “If all the SAF produced in the world goes to us now, it would last five days. If the European aviation industry had it, it would be gone in one day. The volumes are huge.
“We buy all the SAF we can, but right now the SAF price is five times the price of fossil fuel.
“The intention of the industry is to go to net zero, but it involves huge investment and requires infrastructure. We can’t build SAF production plants.
“In Europe we see a mandate forcing us to use SAF that isn’t produced, forcing up prices. This takes government intervention.”
Spohr pointed out “30% of airline costs are fuel” and said: “How can we accept a fuel that is five times the price? We have to scale up SAF production and bring down the price. But right now investors go to the US because it created attractive policies [with the] IRA.”
He suggested “there is a global race and Europe has to be careful” or it will lose “the race for SAF”.
The UK government launched a second, three-month consultation on its ‘SAF mandate’, part of its ‘Pathway to Net Zero’ plan. The government proposes to introduce a mandate from 2025 requiring at least 10% of jet fuel to comprise SAF by 2030.
Airlines UK chief executive Tim Alderslade welcomed the fresh consultation but said: “While a mandate creates demand for SAF it does not provide revenue certainty for producers in what is a nascent industry [and] existing policy won’t provide certainty to investors here in the UK.
“Without a clear commitment . . . we risk investment going to the US, which announced its support for SAF production months ago.”