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US Airlines Chart Flight Path to Net-Zero Emissions

Copyright © 2021 Energy Intelligence Group

The pledge announced on Tuesday by Airlines for America (A4A) to achieve net-zero carbon emissions by 2050 ups the ante on the global sector's existing climate goals set out more than 10 years ago. Through a collective strategy, US carriers are taking a multi-layered approach that covers all avenues toward net-zero, from low-carbon fuels to electric propulsion. The US airline pledge dovetails with the Joe Biden administration's focus on renewable energy and infrastructure projects, a fertile environment for its medium-term goal to scale up sustainable aviation fuels (SAF) production. The US sector has adhered to international aviation commitments for carbon-neutral growth from 2020 and a 50% cut in CO2 emissions in 2050 versus 2005 levels. It touts its strong environmental performance through a 40% improvement in fuel efficiency over the last 20 years. But pressure is building to intensify those efforts. "Going a big step further is a remarkable vision for an industry getting back on its feet after the pandemic," A4A's Vice President for Environmental Affairs Nancy Young tells Energy Intelligence. Over the last year A4A member airlines including United, JetBlue, American, Delta and FedEx have announced net-zero targets. All have signed offtake agreements with producers to ensure future supply availability. United has been at the forefront of the climate challenge with early investments in SAF plants and a December outlay for a carbon capture and sequestration project (CCS). A collective front provides a vehicle to influence policy and accelerate the low-carbon transition by partnering with state and local governments. A4A has issued a flight path that sets an aggressive target to have 2 billion gallons of cost-competitive of SAF available in 2030. World Energy owns a plant in Los Angeles that is currently the only facility producing SAF at commercial scale. Several others are joining the fray this year, including Fulcrum's Sierra Biofuels plant in Reno, Nevada and Red Rock's facility in Oregon. Two others built by LanzaJet and Gevo are due on line next year (JFI Dec.11'20). Bridging the Gap Those plants would add about 33 million gallons to US output, leaving a yawning gap to achieve the 2030 goal. The US produced just 2.4 million gallons of SAF in 2019, a tiny .01% sliver of the 21.5 billion gallons of jet fuel used by commercial airlines that year. Limited production means that SAF costs are still prohibitive and typically average more than three times the price of conventional jet fuel. Competition from road fuels is a huge barrier to scaling up SAF output. The A4A flight path sets out measures that are needed to put SAF on a more level playing field with renewable fuels for ground transportation. Fiscal incentives include an SAF blender's tax credit at $1.50-$2 per gallon based on a greenhouse gas emissions saving of at least 50% versus conventional jet fuel. That is set at a higher level than the existing $1 blender's credit for renewable diesel to account for the other advantages that ground fuels have under the federal Renewable Fuels Standard (RFS). Other incentives spelled out in the A4A strategy include grants and loan guarantees for SAF plants as well as production tax credits. These fiscal tools could harness the renewable diesel boom across the US downstream sector by shifting yields toward SAF. Plants owned by Holly Frontier in Wyoming, and Marathon and Phillips66 in California are converting to produce renewable diesel -- a profitable segment with a bright future from a demand perspective (JFI Oct.12'20). Getting to net zero will require far more than SAF can deliver. US airlines want policy support to progress advances in airframe and engine technologies. More funding is needed for research programs under way at the Federal Aviation Administration as well as Nasa's program on electric and hybrid-electric aircraft. Air traffic management needs to complete its transition from radar to a satellite based system, which would save up to 12% in fuel burn and emissions. Airports can become greener by electrifying ground support equipment. A4A is also leading an effort at the International Civil Aviation Organization (ICAO) to set a long-term goal for climate action, after helping to negotiate its 2016 agreement for a Carbon Offsetting and Reduction Scheme for International Aviation. Cristina Haus, New York

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