The SAF Podcast with Daniel Bloch, International Air Transport Association (IATA)

On the latest episode of The SAF Podcast, our editor Fayaz chats with Daniel Bloch, a SAF specialist from the International Air Transport Association (IATA).

Daniel is here to connect the dots between the crucial role of Sustainable Aviation Fuel (SAF) in achieving these targets and how his role at IATA aligns with the ambitious net-zero 2050 aspirations. In a world where the climate crisis needs immediate attention, understanding the regulatory landscape and the progress towards net-zero targets is paramount. Daniel walks us through the complexities of these long-term goals, highlighting the importance of distilling them into manageable targets and timelines.

With Daniel, we dissect how the choice of feedstock in SAF production can dramatically impact commercial dynamics, sustainability criteria, and carbon reduction numbers. We also project into the future, examining SAF production estimates for the next decade and the pivotal role of policy in spurring the transition towards sustainable aviation fuel. It's not just about today; it's about laying the groundwork for optimising carbon abatement and scaling up the SAF supply beyond 2030. Don't miss this opportunity to gain critical insights into the future of sustainable aviation!

You can find out more about IATA here: https://www.iata.org/

If you enjoyed this, check out our recent discussion with John May, Hamilton Clark here: https://www.buzzsprout.com/2202964/13335688

SAF Investor London

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You can find out more about SAF Investor and our conference in London here: https://www.safinvestor.com/

Host: Fayaz Hussain, SAF Investor
Producer: Oscar Henderson, SAF Investor

Transcript

Fayaz Hussain: 0:07

Hi and welcome to the SAF podcast brought to you by SAF Investor, where we look at how to get capital into sustainable aviation field production. This week we are delighted to have Daniel Glowk with us. Daniel is SAF specialist at International Air Transport Association. In today's podcast, we discuss the decarbonization goals set by countries around the world. We also discuss the availability of SAF FF feedstocks, other technological pathways, saf prices and demand supply dynamics for SAF Perfect Hi, welcome everyone to the SAF Investor SAF podcast. We are joined by Daniel Glowk from IATA. He is currently based out in Geneva, switzerland, works as a SAF specialist, which essentially, I'll let him explain what exactly that means. So over to you, daniel. Please introduce and share what your current job specifications are at IOTA.

Daniel Bloch: 1:07

Thank you very much, bayer.

Daniel Bloch: 1:09

It is a pleasure to be with you here today to go over a little bit about sustainable aviation fuel.

Daniel Bloch: 1:13

So, on my side, as you rightly pointed out, I'm the SAF specialist at IATA, the International Air Transport Association, and what I'm here to do is really support the organisations broader net zero 2050 goals and aspirations, which was committed and pledged by our wider membership of airlines back in 2021.

Daniel Bloch: 1:35

And within that, sustainable aviation fuel clearly has been demonstrated as the key driving tool to achieve our decarbonization goals, and my role is then, as a result, very much about focusing on the technology, on the solutions and who are the major stakeholders that are going to be driving us forward and developing effective partnership management among those stakeholders. So, in a nutshell, my job is to really be able to step into the shoes of the SAF producer, of the airline, of the government supporting, committing public finance, as well as even the financiers on the private side as well, and really be able to understand their pain points and consideration when understanding and unpacking this ecosystem. So there's some educational elements being able to explain the nuances of the technology, of the feedstock, being able to profile this by region around the world and then being able to dive into some more strategic and policy elements of the topic too, so that really, in a nutshell, covers my remit and focus within the sustainable aviation fuel space.

Fayaz Hussain: 2:39

Perfect, I mean you, so I mean it's basically, I mean I does. I would say it is my data to kind of engage with the wide range of industry and policies, stakeholders and all SAF topics. So, just starting from the regulations currently in place across the world, do you see the aviation sector achieving its net zero targets for 2050? And if not, why? And if yes that, actually where do you see most schools for SAF?

Daniel Bloch: 3:09

Big question to start off by as but look, I think I think, categorically speaking, we are making tremendous progress. I think the way I want to address this question to start is really just to take a step back and contextualize the ambition. So, in satchelware, transport association, just for clarification sake, represents over 300 member airlines, which is approximately attributed to 85% of global traffic. So in 2021, through the lens of IATA, but in accordance with our entire membership around the world, we proactively and voluntarily set net zero 2050 emissions as essentially our, as our goal, and this was something that we understood as a sector was absolutely vital to the longevity of our sector and what it would allow us to do is continue growing in the way that we wanted to, as well as the world anticipates and expects very much sort of recognizing the crucial role that aviation plays in our global, connected society, upholding economies, upholding socioeconomic trends, tourism, trade, etc. You can see I think it goes without saying the intrinsic value that aviation brings to the world. But decarbonization was effectively an insurance that we would still be able to continue growing and not force constraints or risks to our license to operate, which is a rightful consideration If we are blowing out our relative proportion of CO2 emissions, we are going to face scrutiny and ultimately be forced to contract as a sector, and I think we all lose out if that takes place.

Daniel Bloch: 4:49

So, with that in mind, that was really what the 2021 ambition was about as well as being a part of this broader ecosystem of sectors trying to decarbonize and keep themselves in line with the Paris Agreement and keeping the temperature rise below one and a half degrees for 2050.

Daniel Bloch: 5:08

So our modelling of net zero 2050 is intended to keep us in line with that Paris Agreement.

Daniel Bloch: 5:17

So, with that said, in less than a year after that particular agreement took place at an industry level through IRT, it was then ratified at a government level, and that was through the body of the International Civil Aviation Organization, iko, based in Montreal, a UN body, and you had over 190 member state countries agree with the industry position of net zero 2050. And underneath that, that sustainable aviation fuel was going to be the key catalyst to achieving that particular goal. Just to really hone in on that point, it's hard to overstate what an achievement it is to have over 190 member state countries and their associated governments agree to this particular plan and that SAF is going to be the key driver, because what it implies is the government buy-in, at least at a philosophical and irrational level. So it means that the industry can have far more targeted and robust conversations with governments, even at a unilateral level, when coming and seeking out the embedding of appropriate policy investment and, as such, so that took place in 2022, barely a year after the industry commitment and pledge had been taking place.

Daniel Bloch: 6:29

So that is a really strong, positive step In the meantime. Now, coming back to where we stand with our regulatory frameworks in a global sense, the first movers really are coming from the US, the UK and the EU. What it really is starting to drive is the breaking down of targets and timelines, because, yes, indeed, 2050 is ultimately where the roadmap goes For what it's worth. It's not a static concept either. We continue to decarbonise and prove well beyond 2050, but the 2050 goal was really aligned along with the Paris Agreement. We continue to move well after. It's not a static concept, but clearly, with any sort of long-term project, you need to break it down into goals.

Daniel Bloch: 7:15

A lot of the policy that you're seeing in the US, the UK and the EU, as these first movers in the policy space, are targeted around 2030, 2035 and ultimately out to 2050. So I mean I can break them down if it's beneficial to you in terms of individually with the US, the UK and the EU. So the US has got its own what they call SAF Grand Challenge. This was something embedded by the Biden administration and the target there is to achieve the production of 3 billion gallons, or 9 million tonnes, of sustainable aviation fuel by 2030. As an interim target that would represent about 15% of their jet fuel supply and that's sort of the target that they're operating within. I can go through some of the policy settings, perhaps a little bit later, but just for the sake of being nice and efficient with this answer, which I think I'm failing out already. The UK has looked towards a 10% SAF percentage by 2030, which would equate to about 1.2 million tonnes of SAF by this point in time, and you've got departments underneath that supporting it, with various incentive and supply side support, as well as some demand side potential mandates evolving there and in the EU. There was recently passed the refuel EU demand side mandate, which would essentially put the onus on producers to ensure a minimum percentage of their fuel that they were producing was in fact SAF, so really embedding and ensuring the demand side.

Daniel Bloch: 8:55

But I suppose, without inferring my answers down the line about what these individual policies look like, perhaps more needs to be done on the supply side to ensure that costs and the actual ultimate price of the SAF which is passed on to the airlines are unmanageable without really forcing some challenging business conversations for these CFOs of airlines in the region.

Daniel Bloch: 9:18

But really what goes to show is that in a short space of time, we're seeing tremendous momentum and catalyzation of policy movement dedicated towards sustainable aviation fuel, and this is critical because we're trying to earn the right to ultimately scale up.

Daniel Bloch: 9:34

And when we talk about carbon abatement because ultimately this is it's not a race to produce as many sort of litres or tonnes of alternative fuels this is ultimately about optimising carbon abatement what we're seeing is that the real carbon abatement timeframe for sustainable aviation fuel, whilst we're ramping up from right now out to 2050, the real sort of chunk of the graph really starts to expand significantly in the back end of the 2030s and through the 2040s.

Daniel Bloch: 10:07

And right now we're laying the groundwork, both from a perspective of policy and accessing finance, to actually building the infrastructure and the assets such that we've got all the ingredients ready that we can launch from 2030 and onward in terms of really scaling up the supply and making the biggest chunks of carbon abatement or taking out the chunks of the carbon abatement requirements as possible in this particular period. So it's very much a building process and to that extent, we're seeing significant momentum and to that end, we're now seeing movements out of other major countries around the world in terms of Turkey, japan, india, australia, new Zealand, brazil, just to name a few that are now equally looking at creating their own standalone SAF policies and frameworks.

Fayaz Hussain: 10:57

And no doubt there will be several more to follow.

Fayaz Hussain: 11:02

Thank you for such a detailed answer, for giving the context as well, because it's important that we understand the regulations in the context and also try to understand how fast it has been, how fast moving this process has been and how quickly has the industry adopted with the challenges. So I mean taking this you mentioned supply issue right, which is I mean, obviously, that everybody is done in terms of the part to move forward. Look at the heart of decarbonisation aviation is SAF and at this, heart of SAF essentially is HEPA, because that's where we see most concentration of projects in terms of SAF production. I'd like to have your comments on SAF feedstock availability for SAF, especially as the SAF production increases in the regions other than US and Europe, how that would impact SAF feedstock and its prices and ultimately, the SAF prices.

Daniel Bloch: 11:57

Yeah, look, there's a number of important factors to sort of address that. I think the first thing that you've rightfully pointed out or alluded to is that the HEPA pathway, or the hydro treatment of fatty acids and esters, is certainly where we're deriving the majority of our SAF from at this point in time.

Daniel Bloch: 12:13

So just to really stress the point, because this is always critical when dealing with anything, with regards to both the commercial dynamics and the cost, but also your sustainability criteria and integrity and indeed your actual carbon reduction numbers is that the feedstock informs the technology. So the point to be made here for HEPA, we're dealing with bio oil and if you take a step back behind bio oils, your feedstock or your input to create that intermediary is going to come from something with a lipid source of fat and oil agrees. Now the reason why I think all of the capacity, or at least 85% of our projected capacity out to 2028 at this point in time, because that's just the extent of where we've seen the announcements for projecting up into at this point in time. So that's all I have to say Thank you, you, you, you, you, you.