Global aircraft manufacturer Airbus (EPA: AIR) and Austria’s integrated energy company OMV (VIE: OMV) are partnering on sustainable aviation fuel, according to both companies.
Through their partnership, first revealed on Friday, Airbus and OMV hope to combine “their expertise to lead the industry towards decarbonization.”
SAF is said to reduce greenhouse gas emissions by up to 80% on average compared to conventional jet fuel over its entire life-cycle. Europe’s airlines have been queuing up to buy SAFs. That’s because the European Union wants the economic bloc’s carriers to use progressively increasing amounts of SAFs.
The EU’s latest published ambitions have the assigned quota for SAF usage within the borders of its 27-members to increase to 70% by 2050, from a starting point of 2% in 2025.
Airlines have largely shown their willingness to respond in kind to the target. However, many grumble that the high target appears unsustainable. For starters, costs are pretty high. SAFs typically cost three to five times that of conventional aviation fuel.
Despite that, many in the industry can’t get their hands on SAFs fast enough, even for a steep price. Unsurprisingly, all types of SAFs currently account for less than 0.5% of global jet fuel usage.
Furthermore, higher pricing creates its own demand concerns with manufacturers unsure about how much to invest in and production volumes to ultimately aim for in a very capital intensive industry.
Therefore, oversupply remains as much of an area of concern for SAF sellers as undersupply remains one for the buyers. OMV and Airbus suggest their partnership aims to address these very concerns.
Need For Transformative Partnerships
For its part, OMV has been producing SAF at its flagship Schwechat refinery in Austria since March 2022. It currently offers SAF to several airlines at Vienna Airport nearby. Schwechat processes SAF using sustainable and locally sourced raw materials, such as used cooking oil.
The Austrian company has signed agreements to deliver a cumulative total of 1.5 million tons of SAF by 2030. Both it and Airbus will now explore joint solutions to broaden the voluntary access to SAF for various customer groups, aimed at stimulating new demand and thereby supporting large-scale investments in new production facilities.
Additionally, the companies say they will “review opportunities to accelerate the testing, evaluation, and approval of new feedstocks, as well as new production pathways to make SAFs available more quickly.”
Both partners have also committed to jointly “raising awareness and understanding of SAFs” and acknowledged the significant role that regulations and policy play in the transition to renewable fuels and shaping the future of sustainable flying.
Martijn van Koten, Executive Vice President Fuels and Feedstock, OMV, said the industry was in need of “transformative partnerships” across the aviation value chain to build a robust SAF industry and accelerate the transition to a more sustainable future.
“Our partnership with Airbus underscores OMV’s dedication to innovation, sustainability, and excellence. We are proud to lead on this journey, driving progress and creating a lasting positive impact on both the aviation industry and the environment. SAF is a cornerstone of OMV’s Strategy 2030 and our path to climate neutrality.”
Julie Kitcher, Chief Sustainability Officer, Airbus, added: “The transition to sustainable aviation fuel requires strong cross-industry collaboration. This partnership fits perfectly with Airbus’ ambition to enable a global net-zero aviation sector and we look forward to working with OMV to deliver on shared objectives.”
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