In a first, a major airline will cross the Atlantic without fossil fuels

A Virgin Atlantic flight taking off this week from London to New York City will last about eight hours, span around 3,500 miles — and emit only a fraction of the planet-warming gases associated with a typical transatlantic flight.

On Tuesday, the British airline is set to pluck a Boeing 787 Dreamliner from its fleet and run the two powerful engines on 100 percent sustainable aviation fuel, or SAF, during the journey from Heathrow Airport to John F. Kennedy International Airport. If all goes to plan, Virgin Atlantic will be the first commercial airline to fly a passenger plane across the Atlantic Ocean by burning only fossil-free jet fuel, marking an important milestone for the CO₂-intensive industry.

The flight will demonstrate ​“the longer-term potential of SAF to decarbonize aviation,” said Joey Cathcart, a senior aviation associate in the Climate-Aligned Industries Program at RMI, a clean energy think tank. (Canary Media is an independent affiliate of RMI.)

“This is really critical because SAF is the most readily available decarbonization mechanism that aviation has today,” he added. Cathcart, who is based in Salt Lake City, is slated to board the ocean-crossing plane tomorrow in London with a select group of passengers. ​“Confidence is high,” he replied when asked if he had any preflight jitters.

Globally, air travel accounts for about 2 percent of annual energy-related CO₂ emissions. As more planes carry more people, the industry’s climate impact is projected to soar by midcentury — the same time the world should be reaching net-zero emissions to avoid the worst damages of climate change.

Existing varieties of SAF are not entirely emissions-free, and supplies remain extremely limited across the industry. But as airlines face mounting regulatory and public pressure to decarbonize, sustainable aviation fuel is an appealing solution because it can work in existing fleets.

The category includes lower-carbon fuels made from biomass, such as cornstalks and forest residues, as well as inputs like hydrogen and captured carbon dioxide. However, nearly all the world’s existing supply comes from one particular type of fuel: hydroprocessed esters and fatty acids, known as HEFA, which is derived from pork fat, beef tallow and yellow grease collected from restaurants and industrial kitchens.

Virgin Atlantic’s plane will use 60 metric tons of SAF — a combination of 88 percent HEFA fuel and 12 percent ​“synthetic aromatic kerosene.” The latter is a compound derived from plant-based sugars that helps to lubricate jet engines and reduce fuel leakage around the seals.

The British airline said that SAF can reduce carbon dioxide emissions from flying by over 70 percent when compared to fossil jet fuel.

The landmark flight arrives as airlines, fuel producers and policymakers worldwide are pushing to scale the production of SAF, including bio-based alternatives and next-generation ​“e-fuels.” Zero-carbon technologies are also in the works, with companies flight-testing planes powered by batteries and hydrogen fuel cells and designing liquid-hydrogen-fueled aircraft. But those solutions aren’t yet suitable for the most emissions-intensive kinds of flights — large planes traveling long distances — due to current weight, energy density and other limitations.

For those reasons, ​“We’re predicting that SAF is going to be the overwhelming majority of fuel used for long-haul flights in the 2040–2050 timeframe,” said Sola Zheng, an aviation researcher for the International Council on Clean Transportation, who is based in San Francisco.

Lots of demand, but little supply 

Virgin Atlantic’s upcoming voyage will join a handful of recent initiatives seeking to prove that SAF can fully and safely replace fossil jet fuel on commercial flights.

Only a week ago, Gulfstream Aerospace said it successfully completed the world’s first-ever transatlantic flight using 100 percent SAF. On November 19, the U.S. aircraft-maker flew a G600 business jet from its headquarters in Savannah, Georgia to Farnborough, England. The demonstrator aircraft used only HEFA fuel and no aromatic compounds during the seven-hour flight, which carried testing equipment but not passengers.

World Energy, the fuel supplier, said its SAF reduces a flight’s life-cycle emissions by 83 percent.

Today, industry standards-setters limit the amount of alternatives that can be blended with conventional jet fuel, to ensure the new fuels are compatible with engines and fueling infrastructure worldwide. For instance, producers can’t use more than 50 percent HEFA in a given fuel mix. Virgin Atlantic said it secured special permits from aviation regulators in the United Kingdom, Ireland, Canada and the United States for its one-off demonstration flight.

Yet even if the industry lifted its blending rules, airlines still couldn’t routinely fly on SAF alone. That’s because there just isn’t enough of the alternative fuel to go around.

In 2022, fuel producers churned out nearly 80 million gallons of SAF worldwide. Although that’s triple the volume produced in 2021, and while this year’s output is on track to ​“rise exponentially,” SAF supplies still represent less than 0.1 percent of total global aviation fuel. Where SAF is available, it can cost three to five times more on average than conventional jet fuel.

“Airlines are telling me they will take all my SAF, as long as it’s the same price as jet fuel,” said Gene Gebolys, president and CEO at World Energy. ​“But we can’t produce SAF at the price of jet fuel and have it be a going concern.”

World Energy is spending over $5 billion total to expand capacity at its existing SAF facility in Los Angeles and convert a biodiesel plant in Houston to make aviation fuel. To support those investments, the company recently signed long-term agreements with Microsoft and DHL Express, which are willing to pay a price premium to address their own air-travel emissions.

The two corporations aren’t directly buying fuel from World Energy. Instead, they’ll purchase certificates representing SAF that gets pumped into the larger supply chain — then count the associated carbon reductions toward their sustainability goals. Microsoft agreed to buy certificates representing 43.7 million gallons of SAF over a 10-year period, while DHL signed a contract for 177 million gallons over seven years.

The deals are priced based on every metric ton of CO2 avoided, and are both worth hundreds of millions of dollars, Gebolys said. He added that World Energy uses a digital registry known as ​“book and claim” to ensure the certificates are reliably and transparently tracked.

Virgin Atlantic, for its part, launched its own SAF certificate program earlier this year through its cargo division. Freight companies that put their goods on Virgin’s planes can buy certificates, helping to defray some of the airline’s expenses from buying lower-carbon, higher-price fuel.

Virgin, like dozens of other commercial airlines, has committed to getting 10 percent of its jet fuel supplies from SAF by 2030, up from hardly anything today

SAF subsidies are on the way, but not without controversy

As private companies slowly start to pony up for SAF, the U.S. government is set to spend billions of dollars to help boost production and drive down prices for the nation’s SAF supplies.

The Biden administration has set a goal of producing 3 billion gallons of SAF per year by 2030 — or nearly 2,000 percent more than total U.S. production last year. The 2022 Inflation Reduction Act, a sweeping climate and tax law, is expected to help push the country toward achieving that target, including by giving tax incentives to fuel producers.

Companies will soon be able to earn tax credits worth $1.25 per gallon for sustainable fuels with 50 percent lower life-cycle greenhouse gas emissions than standard jet fuel. The higher the emissions reduction, the more money producers can earn, up to $1.75 per gallon. The goal is to help reduce the cost of building new commercial-scale and pilot-size facilities and ultimately narrow the price gap between expensive SAF and conventional fuel.

In early November, U.S. jet fuel retailed at around $2.85 per gallon, while SAF prices were at $6.69 per gallon, according to Argus Media data cited by Reuters. Applying the highest level of tax credit, SAF would still cost roughly 70 percent more than conventional fuel.

While aviation experts and trade groups have generally applauded the policy, disagreement is growing within the industry over which types of fuels should qualify and how the federal government should calculate SAF’s emissions, GreenBiz previously reported.

The divide is largely over whether fuels derived from corn-based ethanol and other agricultural crops — not just plant waste like leaves and stalks — should receive tax benefits.

Environmental and climate groups have raised concerns that incentivizing crop production for use in making fuel could result in displacing food supplies or drive deforestation and land-use change, which generates CO₂ emissions and damages ecosystems. A 2022 study found that corn-based ethanol, which is primarily used in cars and trucks today, may actually be worse for the climate than fossil-based gasoline.

SAF producers argue that ethanol and other biofuels are needed in order to rapidly boost the nation’s supply. The companies and their allies in Congress are pushing the U.S. Treasury to adopt a CO₂-accounting methodology that reflects more favorably on crop-based fuels, known as the GREET model, which stands for Greenhouse Gases, Regulated Emissions and Energy Use in Transportation. Critics of this model say it doesn’t capture all of the indirect emissions associated with producing fuels, giving a false sense that certain SAFs are cleaner than they really are.

Currently, the government is using a different approach to calculate IRA tax credits, which might end up excluding some fuels. The CORSIA model, or Carbon Offsetting and Reduction Scheme for International Aviation, was developed by the United Nations and is relatively more stringent than GREET when it comes to tallying life-cycle emissions. The Treasury Department is expected to issue its decision in December.

In addition to tax credits, the Inflation Reduction Act dedicates nearly $300 million in research and development grants, including for initiatives that make, transport, blend or store SAF. Policymakers are also working to allocate more funding for SAF through the Farm Bill, a major piece of legislation that expires every five years. Last week, Congress voted to extend the 2018 Farm Bill through September 2024, giving lawmakers time to hash out a new bill early next year.

Scaling the next generation of SAF

All told, decarbonizing the global aviation industry could require around $5 trillion in technology investments through 2050, according to the U.N.’s International Civil Aviation Organization.

Zheng, the aviation researcher, recently analyzed how governments and companies could best direct that giant pool of money to achieve the deepest emissions reductions at the earliest date.

The aviation industry should bear around 80 percent of the $5 trillion total, an amount that would primarily come from regulating and penalizing pollution, according to Zheng’s analysis for the International Council on Clean Transportation. In the European Union, the Emissions Trading System already makes it more expensive to emit CO₂, giving airlines more economic incentives to curb their carbon footprint.

Government spending provides the other 20 percent of investment in Zheng’s analysis. She cautioned against oversubsidizing fuel types that are already considered mature and commercially viable, such as ethanol and HEFA. Fuel producers churn out billions of gallons of these fuels every year to supply heavy-duty vehicles and cars. As SAF demand rises, so too will competition for the biomass, which could drive up prices and hasten supply shortages, she said.

Instead, government dollars would be better spent by investing in nascent, next-generation aviation fuels, she said. That includes ​“power-to-liquid” fuels, or ​“e-fuels,” which are made using captured carbon dioxide, hydrogen, heat and lots of electricity — ideally all from renewable sources. These alternatives can potentially cut life-cycle emissions by 90 percent or more when compared to fossil jet fuel, according to the startups developing e-fuels.

E-fuels also aren’t expected to face the same supply constraints as biofuels, since hydrogen and CO₂ are virtually unlimited as feedstocks. That’s why analysts say e-fuels could represent the bulk of the world’s SAF supply, potentially as early as 2035. First, however, companies need to commercialize their still-fledgling technologies and drive down production costs — a process that can take a decade or longer.

“That’s a very long time between how the technology is and where we need it to be,” Zheng said. ​“If there’s no government support for those pathways, and everyone’s just producing HEFA fuels, then you will see a much slower process.”

In the meantime, as governments and industry decide how to spend their trillions, high-profile demonstrations — like Virgin Atlantic’s SAF-fueled transatlantic journey — can play a role in steering the aviation industry toward less-polluting fuels, said Joey Cathcart, the RMI associate.

“Efforts like this indicate to suppliers that there’s an interest in this type of product,” he said of the London–to–New York flight. ​“I’m optimistic that they’ll drive suppliers to increase production.”