Sustainable aviation fuel blinking on Chile’s decarbonization cockpit radar

Sustainable aviation fuel (SAF) rumblings are growing louder in Chile, a country hoping to start domestic production by 2030 and for SAF to account for 50% of aviation fuel consumed by 2050.

A government roadmap is due for publication next month, along with the findings of Latin America-focused sector decarbonization research conducted by MIT in the US and funded by manufacturer Airbus and regional carrier LATAM Airlines Group.

Academic and consultant Susan van Dyk, from the University of British Columbia in Canada, told BNamericas: “It’s critical to decarbonize the aviation sector, even though some people say, ‘oh, but it’s only 2-3% of emissions.’ It’s very substantial on a global scale.”

Globally and locally, air travel is expected to continue trending up, with emissions advances achieved via technological efficiencies offset by greater fuel consumption. The sector is nevertheless aiming to have net-zero emissions by 2050, a goal that will require fuel decarbonization.

“We need very large volumes of SAF – now and for decades to come,” Van Dyk said.

Global SAF production in 2023 was 600Ml, with output forecast to triple this year, to account for 0.53% of jet fuel demand, according to International Air Transport Association estimates. By 2050, more than 400Bl could be required, a year when around 874Bl of fuel is expected to be consumed. 

Van Dyk was keynote speaker during a SAF seminar hosted by the energy transition center of Chile’s Universidad Adolfo Ibáñez.

Chile, Van Dyk indicated, could produce HEFA – with competitive capex and costs, the most widely used SAF variant globally today – by leveraging existing petroleum refinery infrastructure for co-processing of bio-based feedstock oils with petroleum-derived feedstocks. 

"So you don't even need to go and build a separate facility," Van Dyk said. "The refinery can make some modifications to existing infrastructure and processes to enable co-processing."

HEFA uses the likes of used vegetable oil or beef tallow as feedstock, which accounts for 70-80% of opex. Finished jet fuel mixes can contain up to 50% SAF and test flights using 100% SAF have been made. 

In terms of feedstocks, Van Dyk said: “One has to identify the opportunities and quantify how much of it is available to support a facility.”

Chilean state oil company Enap, under a three-pillar strategy, is exploring its renewable fuel refinery co-processing and feedstock options. Chile’s only refiner, Enap has three plants with combined crude processing capacity of 224,000b/d. The company also operates in the hydrocarbons transport and storage segments.

Globally, by 2030 HEFA should remain the main SAF, but availability of waste fats and oils may limit further growth. A question mark hangs over availability of such feedstocks in Chile. 

The country’s greatest potential, however, the conference was told, rested in production of synthetic hydrocarbons, the so-called power-to-liquids pathway.

A hydrogen derivative, synthetic hydrocarbons are more costly to produce than HEFA.

“Power-to-liquids becomes, probably, the most feasible, but because it’s the most expensive, it presents a different kind of challenge,” Van Dyk said, adding that there were nevertheless exporting opportunities. The EU has a dedicated mandate for power-to-liquids. 

Carriers, meanwhile, can buy SAF fuels in the likes of the US to help reduce their footprint. “But if Chile wants to decarbonize, then [production] obviously needs to be here and it will also secure availability,” she added, citing limited production volumes and brisk demand globally.

Aiming to achieve net-zero emissions by 2050 – a target that will require slashing transport sector emissions – Chile has multiple green hydrogen projects underway that tap the country's world-class wind and solar power resources. 

ROADMAP

Describing the roadmap as an important first step, Martín Mackenna, secretary general of Chile’s civil aeronautics board, said: “We have a big challenge in front of us. With this roadmap, we’ll be able to start moving forward.” He added that each country should have its own SAF pathway, but that global regulations should be aligned.

The aim of the roadmap is to help nurture the conditions needed for a local SAF industry to take off. Key pillars are regulations, market creation, market ecosystem creation, and research and development. 

Work on a SAF feasibility study is due to get underway around the middle of the year, delegates were told.

Enap new-business development manager Juris Agüero said securing offtakers, and working in partnership with other firms, was critical. 

PRICE, CARROT AND STICK

A key challenge – as with green hydrogen – is bringing down the price of SAF so that it is competitive with conventional jet fuel A1, which is priced at around US$700/t. SAF is today three or four times as expensive.

Chilean carrier SKY Airlines underscored the importance of price. The carrier’s corporate and sustainability manager Mayra Kohler said: “SAF will be an alternative only if it becomes cost effective, if it is integrated with our efficiency business model. We are a low-cost airline, so efficiency is crucial to our business model.”

Referring to Chile’s 2030 production launch target, Kohler said the right regulations or incentives were not in place, adding the goal “might be a little bit ambitious,” citing knowledge gaps.

A combination of usage mandates and the likes of tax credits would help unlock project financing, delegates were told.

“I like mandates but without incentives to reduce the price it is not feasible,” Van Dyk said.

Indeed, the thorny issue is who will pay for greater SAF usage, the conference heard. 

Juan José Tohá, director of corporate affairs and sustainability at LATAM Airlines Group, cited the challenges of passing on SAF-related costs to passengers.

In terms of Chile’s strategy, he said the country should explore all potential options, including striking supply deals with Brazil, which could become a major producer of jet fuel derived from ethanol: “We have to find our own pathway, our own timing.”

The transport sector accounts for around a quarter of Chile’s greenhouse gas emissions. Given the nation is long and narrow, domestic aviation is an important industry.