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Shell Aviation inks deal to supply sustainable aviation fuel to Lufthansa in US airport by Madeleine Cuff

01/07/2020

Firm promises to develop 'scalable supply' of sustainable aviation fuels under new multi-year partnership with World Energy

Shell Aviation, the jet fuel arm of the Dutch oil giant, has today announced a new deal with World Energy and Lufthansa Group that will see the German airline supplied with sustainable aviation fuel for flights between San Francisco and Munich, Frankfurt, and Zurich.

The deal will provide Lufthansa with up to one million gallons of sustainable aviation fuel over the course of the 12-month project, which began in November.

The fuel, made from waste agricultural fats and cooking oil, boasts lifecycle carbon emissions at least 80 per cent lower than conventional jet fuel and will be blended to account for up to 30 per cent of an aircraft's fuel mix, Shell Aviation said.  

The supply deal forms part of the new "multi-year" partnership between Shell Aviation and US low carbon fuel supplier World Energy to develop a "scalable supply" of sustainable aviation fuel to the commercial aviation market.

"Alongside new technologies and high quality carbon credits, sustainable aviation fuel - at scale - has a significant role to play in reducing carbon emissions for the aviation industry," said Anna Mascolo, vice president at Shell Aviation. "As well as bringing together the right mix of technical expertise and operational capability, commitments like this one provide a strong example and assurance to the industry that it is possible to fly and emit less."

Thorsten Luft, vice president of Lufthansa, added: "The Lufthansa Group takes its responsibility for the environment very seriously and has already taken many initiatives to reduce the CO2 emissions of its aircraft. We have a long history of testing and supporting the development of sustainable aviation fuel, and are proud to be introducing it to our daily operations at San Francisco."

Shell Aviation supplies fuels and lubricants to 900 airports around the world and is one of the world's leading players in jet fuel. However, delivering a supply of sustainable jet fuel to all those locations will pose a major challenge for the company - not least because the supply of waste ingredients is limited and production capacity is currently constrained.

Meanwhile, Shell Aviation and World Energy did not disclose the price they will be charging for the sustainable jet fuel, but historically similar products have seen greener fuels priced well above the market rate for fossil-based jet fuels.

However, airlines may prove more willing to pay for sustainable fuels in the coming years, as a new agreement known as CORSIA kicks in mandating airlines to offset all emissions growth after 2020. The more airlines can use sustainable fuels to reduce emissions, the fewer offsets they will need to buy.

Many airlines are attempting to get ahead of CORSIA's arrival with voluntary offset measures. Following British Airways' move to offset all its UK domestic flights starting this year, US airline JetBlue announced yesterday it will be the first large US airline to offset all its domestic US flights.

It said the move would "prepare its business for a new climate reality", with offsetting starting from July 2020. It will also start using sustainable aviation fuel for flights out of San Francisco airport from mid-2020.

JetBlue said its pledge would see between seven and eight million tonnes of emissions offset each year, in addition to the company's existing offset commitments. The credits are expected to fund schemes such as reforestation, solar and wind energy deployment, and landfill gas capture projects.

"Air travel connects people and cultures, and supports a global economy, yet we must act to limit this critical industry's contributions to climate change," said chief executive Robin Hayes. "We reduce where we can and offset where we can't. By offsetting all of our domestic flying, we're preparing our business for the lower-carbon economy that aviation - and all sectors - must plan for."

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