A senior figure at the company operating the only sustainable aviation fuel (SAF) production plant in the UK has urged the government and industry “to be transparent” on the costs to consumers of producing SAF.
Simon Holt, manager for emerging energy in Europe at energy company Phillips 66 which runs the SAF plant in Lincolnshire, said: “The energy transition is not going to defy the laws of economics.”
He told a Westminster Energy, Environment and Transport Forum on UK aviation decarbonisation: “We need to make clear to customers what the costs of SAF production will be. We need to be transparent on the costs.”
Jenny Millard, associate director for future mobility and sustainability at consultancy KPMG, agreed. She told the forum: “The production of alternative fuels is going to be expensive. What is the willingness of the end consumer to pay?
“Are there mechanisms to get people to understand and pay more, because that is what is going to be needed?”
Virgin Atlantic vice-president for corporate development and sustainability Holly Boyd-Bolland said the barrier to SAF adoption “is about supply and cost” and said: “The end consumer will bear the costs of SAF production, and that will impact on demand. Ensuring the costs are proportionate is critically important.”
The UK SAF Mandate, which came into force on January 1, requires a minimum 2% SAF use across all flights departing the UK this year, rising each year to reach 10% SAF in 2030.
Holt said: “We need to accept imports of SAF will be required through to 2030, probably from the US. We need tens of plants built in the UK.”
He warned: “Competition from other sectors is going to increase, especially from the maritime sector and heavy road vehicles.”
But he suggested the UK has “a big advantage” in its existing jet fuel supply infrastructure “which we can utilise to blend” SAF with fossil jet fuel.
IAG group head of sustainability Jonathon Counsell estimated the costs of investment in SAF production at “tens of billions a year by the end of this decade” and said: “We can’t do any of this without support with investment of anywhere between $2 trillion and $5 trillion.”
The Phillips 66 plant processes waste cooking oil into SAF, most of which is delivered to British Airways. It has been operating for four years.