SAF's leadership role takes off in Spain

The new sustainable aviation fuel industry has the potential to attract investments of 22 billion euros and to contribute 56 billion to the Gross Domestic Product (GDP), provided it's prioritized as a State policy.

By Miguel Ángel García Vega

Even though it doesn’t exist yet, one of the most important industries of our time has reached cruising speed. One of the most challenging sectors when it comes to decarbonization is aviation. Challenging, but not impossible. Remember those famous lines in 1962 at Rice University (Texas, Houston), from former President John Fitzgerald Kennedy (1917-1963), about the Apollo project. “We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one we intend to win, and the others, too.” 

Creating sustainable aircraft fuel isn’t an easy task. Biomass, agricultural residues, catch crops, greases and recovery systems, such as those for used household oils, are vital elements; Regulations that enable sustainable use of the environment and its surplus resources are also needed. When talking about new fuels, it's called SAF (sustainable aviation fuel). It might not ring a bell as much as green hydrogen (H2). There's a global race, however, to take the lead in this emerging field and its associated acronyms. HEFA (hydroprocessed esters and fatty acids, in its Spanish meaning), comes from vegetable oils, greases and catch crops; and, on the other hand, there's the Fischer-Tropsch, FT (forest residues, municipal, agricultural and intermediate crops) and Alcohol to Jet, AtJ (forest residues, agricultural and intermediate plantations) processes. These are the essential words which describe its composition.

Hard doesn't mean impossible though. The How to make Spain the European leader of SAF Report, in which Cepsa, Iberia, Iberia Express, Vueling and BIOCIRC (Spanish Association of Biocircularity) have taken part, and which was presented by the Secretary of State for Tourism, Rosario Sánchez Grau, ended with the shared proposal that SAF is a national challenge that the sector "is ready to take on". The numbers come from the report of the PwC consulting firm. SAF can reduce carbon dioxide emissions by up to 90% compared to kerosene, the fuel currently used in aircraft, over its entire life cycle. Put simply, by 2050, 14 million tons of CO2 emissions would be removed from Spain’s atmosphere annually. Industrial flight speed is key. This new SAF industry can generate investments of 22 billion euros in Spain as well as contribute 56 billion euros to the Gross Domestic Product (GDP). 

It goes without saying that launching a nearly unknown sector is a tough task. There are 74 tons of raw material available to be converted into SAF. “The fuel available for this category meets less than 1% of the airlines' needs. "Everything that is sold costs three to five times more than fossil fuel," states Carolina Martinoli, president and CEO of the Vueling airline. And she adds that: "Decarbonizing aviation is neither easy, nor fast, nor cheap, but it's a social driver and a chain for creating social value." We must face up to this challenge. While there are currently only (as we've seen) 74 million tons of raw material available in Spain, this number can be increased with a better use of resources and regulatory regulations in line with the challenge. How is all the reused cooking oil collected? How do you make the most of the biomass? All within a country with countless renewable energy resources from the sun and wind 

Due to a complex environment, there’s a lack of a cohesive regulatory framework to attract investments, tax incentives (like other countries have), and economic support, which is needed given the high cost of factories that convert waste into fuels. But we never said it was going to be easy. “It’s an industrial opportunity. Mario Draghi's latest report, the former president of the European Central Bank (ECB), emphasized that Europe can't just solely rely on services for its survival. We need a strong industry that creates value and quality employment, and these characteristics go hand in hand with green hydrogen: essential for synthetic e-SAF and its possibilities in Spain," says Maarten Wetselaar, CEO of Cepsa. And he closes with: "Now's the time to reindustrialize the country".

In what way? By understanding its economic needs, to start off with. According to PwC’s analysis, 32 installations are needed by 2050, with a cost of 22,362 billion euros to build them and 50,129 billion to operate them. And this fit is very difficult without the public-private partnership. It represents a snapshot of a cross-sector industry. 13% of the country's GDP comes from tourism and 80% of visitors arrive by plane. It's a shared flight between the State and private companies. “This industry has it all to be a success for the whole country, although it won't come easily”, warns Maarten Wetselaar. However, just as other industries have embraced electrification, it's time now for innovation in aviation fuel. According to Margarita de Gregorio, CEO of BIOCIRC, “Spain, despite that global gap, has its own capacity to generate biomass and organic matter to replace fossil molecules." This strategy helps to structure the territory and reverse the rural-to-urban exodus, which has been occurring for 30 or 40 years.  

It's a real puzzle in which the relationship between space and speed is vital: time. The IAG group (result of the merger of Iberia LAE and British Airways) has already invested around 1 billion in purchasing SAF by 2023. “The SAF race has already begun”, predicts Marco Sansavini, Chairman and CEO of Iberia. And here's where opportunities arise. By the 2025-2030 period, Spain, with its seven plants, mostly utilizing HEFA technology, could genuinely emerge as a leader in SAF production in Europe, alongside the United Kingdom, which has eight facilities. State support is once again essential in a sector where the United States is in first place with 29 centers. “That's why we're urging the central government and other public administrations to get together in order to develop a unified SAF strategy. It’s time for the Government to implement a good incentive policy as it already did with green hydrogen,” Marco Sansavini stressed. 

If there’s going to be a driving force for this industry's future, it's public-private collaboration. The work has identified 16 key measures that Cepsa's leader emphasizes to turn the implementation of SAF into a reality. It's an equilateral triangle, and it can be summarized. The first side is made up by regulatory proposals. Streamlining administrative permits and authorizations while promoting biomass use. Next side of the triangle: the economic side. Boosting the industry through the revenues from [300 million] carbon emission allowances auctions, tax incentives for investing in decarbonization technologies as well as access to free emission allowances for airlines. The last side of the triangle concerns cross-cutting measures. One in particular: the National SAF Action Plan. 

This final aspect introduces the opening analysis of Rosario Sánchez Grau, the State Secretary for Tourism. “Spain must lead the way towards cleaner and more efficient aviation that is capable of maintaining our connectivity, preserving profitability, all while protecting the environment”. He adds: “We know that aviation decarbonization is one of the biggest challenges facing the sector and that it has also had to adapt to strict regulations. That's why public-private collaboration is so important to me,” she explains. An industry that doesn’t even exist is ready to take off, and Spain can’t miss that flight.

Miguel Ángel García Vega
He has been writing for EL PAÍS for some 25 years, currently for Cultura, Negocios, El País Semanal, Retina, Suplementos Especiales, and Ideas. His texts have been republished by La Nación (Argentina), La Tercera (Chile) or Le Monde (France). He has received, among others, the AECOC, Accenture, Antonio Moreno Espejo (CNMV) and Ciudad de Badajoz awards.