Shaping the Future of Sustainable Aviation - A Reuters interview with Topsoe CCO, Elena Scaltritti

Absolutely, pleased to do that and to try to keep it as simple as I can. So, sustainable aviation fuel is a way to replace fossil-based jet fuel. We have different ways to produce it. It starts from renewable feedstocks, and today we know of 11 different ways or so-called pathways which are already approved by the international authority standards to be replacing jet fuel in aviation. So SAF is called a drop-in fuel. Why? Because its physical and chemical properties permit that you just replace fossil fuel with SAF without actually changing the aircrafts or the infrastructures, making the transition very easy. And going back to decarbonization, the estimation is that aviation contributes to 2 to 3%, closer to 3%, greenhouse gas emissions today. And it is also projected to increase largely from now until 2050. Potentially, if you do nothing, if you just keep business as usual, you would see emissions from aviation increasing by 300%. So there is an urgency to tackle decarbonization for the aviation industry, and SAF is the simple solution to do that.

Absolutely. So we are a technology provider, and our goal is actually at Topsoe to enable the energy transition with the technology and solutions. So we enable a SAF producer to produce SAF. As I said, we have today 11 different pathways. Three of those are based on so-called co-processing, and co-processing basically means that you have a production line in a refinery where you today process fossil fuel feedstock and you replace part of that feedstock with a renewable feedstock, which can be used cooking oil, non-edible crops, as well as in the future municipal waste. So really taking on renewable sources as a source of jet fuel. With that pathway of co-processing, you basically obtain fuels which are reducing the emissions between 50 and 80% compared to fossil jet fuel. Next to that, something that is called HEFA, H-E-F-A, that stands for hydroprocessed esterified fatty acids, and fatty acids, it's a bit of the same: it can be animal fats, used cooking oil, virgin oils from non-edible crops, and you can just set up plants to produce renewable jet fuel starting from these crops through this pathway which is fully scaled, fully commercial. Actually, if you look into mandates that we have in 2030, this is possibly the largest contributor to supply those mandates. We also have another different way of producing stuff, the so-called synthetic fuels. And this is for me an amazing pathway. Because you basically start from renewable energy, you transform it into green hydrogen, and you combine that with carbon dioxide, CO2. So one of the big responsible of greenhouse gas emissions, and those are readily available, largely available, and renewable feedstock. And we have technologies to transform those into SAF. These are the main ways. As I said today, HEFA being the predominant one, but we are scaling up synthetic fuels.

Right? It's a big discussion right with anything related to decarbonization. And you might say easy for us that we are just a technology provider. Actually, we look into the cost of this decarbonization. And certainly, there is a consensus that despite incentive and mandates, finally the end users, so the passengers, will have to pay a ticket, and we already see trends about that. If you do a quick calculation and you consider that today roughly 28-29% of a cost of a ticket is related to the fuel, that is the average globally; it's a snapshot that has been recently taken by IATA, and actually in North America it's even less, it's roughly 25%. So you have that, you assume that you take 6% of that and you replace it with renewable fuel. Actually, you end up with a 1.5% additional cost for the carrier. Now, on a 200 euro ticket, it's a €6 charge. That's all. That's all. Oh wow. With a long-haul route, right? So, yes, there's a lot of discussion, but also if you look what happened after the pandemic, we have seen increases in the airline ticket cost which are far beyond this. Also, if you look at what Lufthansa recently implemented, they have a surcharge ranging from 6 to 12 euro for an international air ticket to cover for the cost of the mandates, and that is also something that, at least in our economies, it's probably something that we can afford to pay.

Right. Indeed, we first of all to describe the space that we cover in this application today: if you think of SAF, roughly 30% of what is produced globally is produced with our technology. So we think we know the market. We have certainly seen some setbacks. We have seen delays and even some cancellations. We don't see though a general market trend. Actually, there are a number of reasons why these delays or cancellations happen, ranging from concerns about availability of feedstock, concerns about the future pricing, the future demand, concern about how solid the mandates will continue to be in the future. But there's not one single parameter or variable that is actually causing cancellations. And actually, we see on the other side that the interest is super vivid in these technologies and in this market. It's a market just to put some numbers again that is foreseen to grow from the current $230 million to potentially over 400 billion by 2050 according to existing mandates. So it's something that inspires, attracts a lot of investors and project developers as well as the existing industry. So while we have seen delays, we also see a lot of projects in the pipeline. And to mention again a couple of numbers: we have currently 20 plants which are already up and running operational. We have six that are close to a final investment decision, and we have 40 projects in the pipeline at different stage of maturity. So all in all, we remain very confident that the transition is actually going to happen and that this decarbonization possibility is going to materialize.

I think there's a huge opportunity of collaboration and of progressing on SAF in venues like this and in discussion like this. I was part of a few discussions today more related to the decarbonization of the shipping industry, but this is just another way of looking at decarbonization of transport, which is in general what we are very interested about.

So if I might twist your question a little, I think we have something that we can do now, and this is really related to the HEFA route and the co-processing, and we see a lot of activities in that space. And one concern is availability of feedstock. So where do we get the used cooking oil? Where do we get animal fats, etc.? So I think we think that this will easily bridge the needs until 2030 and possibly behind, but this is not going to be the final solution, and we will have to look at other pathways, and they are being explored and we are doing our part in that. So we look at different potential future solutions. I alluded to before to synthetic fuels. Here we start from carbon dioxide and from renewable hydrogen. We have technology that are set up to produce that; they are being scaled. There, the cost of the feedstock is very important. So as I said, they would be naturally broadly available, but we need to bring down the cost, and so ensuring scaling of the technologies to produce especially green hydrogen and to capture carbon dioxide from air are fundamental enablers for the synthetic fuels for the SAF to come through. Looking at different feedstock. I alluded to municipal solid waste or biomass, forestry residues. There we still work on other technologies that would enable the use of those as feedstock, and we are actively working on that with pilot and collaborating across the industry to make this happen.

We need to take action and we need to speed up. So the technology is there certainly, the financing aspect is crucial and ensuring that the demand is out there, but we have a solution and we can make it happen.