For the 115 people aboard a flightfootnote1 from Chicago O’Hare to Washington’s Reagan Airport, nothing seemed unusual about the journey. The Boeing 737 Max 8 departed and arrived on time, and though it wasn’t apparent to any of the passengers, the flight was a world-first: a commercial passenger flight powered by a mix of traditional jet fuel and a new energy source made from used frier oil, lawn clippings, wood chips and even old newspapers.
Sustainable Aviation Fuel: Ready for Takeoff
A new way to power flight in travel, transportation, freight and other industries is giving decarbonization efforts a giant lift
Sustainable Aviation Fuel (SAF) is produced from ingredients including food scraps, forestry and municipal waste, packaging, textiles — anything considered to be biomass, a catch-all term for organic material. While its composition is somewhat novel, SAF’s significance is anything but — compared to traditional jet fuel, it provides up to a 70% reduction in carbon emissions over its lifecyclefootnote2.
As companies race to reduce their emissions, the aviation sector has long been considered one of the most difficult to decarbonize. The sector accounts for just shy of 3% of global carbon emissions, yet the United Nations (UN) expects that figure will triple by 2050. SAF is a promising new development in achieving the goal of a net zero travel and transport industry. Yet, for SAF to reach its full potential, it will require even greater cooperation between the public and private sectors.
An inspired solution
Globally, commercial airlines use of jet fuel increased from 68 billion gallons in 2005 to more than 100 billion gallons in 2022.footnote3 Yet, finding an alternative to fossil jet fuel is challenging as newer, promising power sources aren’t yet a good fit. Hydrogen takes up too much physical space — planes would need fuel tanks four times their current size. Alternatively, batteries are too heavy — a 300 passenger plane flying 8,000 miles would need a 6-million-pound battery, more than ten times the weight of the plane itself.footnote4
In the search to decarbonize air transportation, SAF looks to be a critical tool offering several benefits beyond lower carbon emissions:
- It can be made from nearly any organic waste product, which makes it a renewable resource
- Crops dedicated to SAF production can be grown on land unsuitable for food-chain agriculture
- SAF is opening up new economies for farmers, business owners and others to supply biomass
- Unlike crude oil, SAF ingredients spend much of their life removing carbon from the atmosphere
- It emits fewer harmful particulates into the atmosphere than jet fuel
Building the SAF marketplace
Despite SAF’s potential, there’s a lot of work to be done before its impact can be felt. In 2022, nearly 80 million gallons of Sustainable Aviation Fuel were produced — a far cry from the 118 billion gallons the International Air Transport Association projects will be needed to meet the aviation sector’s 2050 Net Zero goals.footnote5
In 2022, a mix of private sector agreements, nonprofit partnerships and public policy advancements came together to help increase SAF production. Legislation affecting several U.S. government agencies will help jumpstart the production of 3 billion gallons of SAF by 2030footnote6 . Dozens of airlines have committed to usage goals, and the Clean Skies for Tomorrow Coalitionfootnote7 , a World Economic Forum initiative comprising 60 global companies, set a goal for the aviation industry to use 10% of SAF in its operations by 2030.
Bank of America is also working to catalyze the market. This includes:
- A commitment to mobilize $2 billion in sustainable finance for SAF production and other low carbon aviation solutions, as well as a 10-year partnership with SkyNRG to support the production of 1.2 million gallons of SAF per year beginning in 2025
- Participating in United Airlines Eco-Skies Alliance, an innovative program designed for companies to work together to share the “green premium” or the cost associated with purchasing lower-emission fuels, and corporate partner for the United Airlines Ventures Sustainable Flight Fund, a way for companies and consumers to come together and increase the supply of SAF through the support of start-ups
- Joining Amex GBT and Shell Aviation’s SAF program, which launched in 2022 with 1 million gallons of SAF available for corporate customers; operated on the Avelia platform, it is one of the world’s first blockchain-powered digital SAF book-and-claim solutions for business travel
“It is critical that we work together as quickly as possible to accelerate technologies that will help make low carbon solutions more competitive and available,” says Karen Fang, Global Head of Sustainable Finance. “The key is to speed up the supply demand flywheel to help scale SAF production.” The push for greater adoption of SAF is part of the bank’s $1.5 trillion, ten-year sustainable finance commitment to help drive progress on environmental and social issues.
Putting SAF to Use in Operations
Just as the private, public and nonprofit sectors are working together to kickstart SAF’s potential, individual companies can also take advantage of the fuels’ promise. For example, Bank of America is working to meet its goal for SAF to make up at least 20% of the company’s total annual corporate and commercial jet fuel usage. This includes employee travel on commercial airlines, such as American Airlines, with whom the bank has a three-year agreement to support the purchase of one million gallons of SAF annually from 2021-2023.
The commitment also extends to 100% of corporate jet fuel. Bank of America does this by utilizing SAF whenever available, and when not available, supports partners’ purchases of SAF in an equivalent amount. “To scale these technologies, we’re leveraging all of our global expertise and resources — across our operations, buying power, sustainable finance, and partnerships,” said Alex Liftman, Global Environmental Executive. “We’re working to build this market with every tool possible".
The bank’s agreement with American Airlines is the largest publicly announced SAF agreement by volume between an airline and corporate customer for reducing emissions for employee travel. “Through our support and purchasing of SAF, we are working to meet and exceed our own usage targets, while also spurring demand to make SAF more accessible and affordable,” said Beth Sullivan, Global Head of Corporate and Executive Travel. “We are proud to be a leader in the adoption of SAF, and look forward to pursuing additional SAF opportunities and advancements.”
Bank of America is also a founding member of the Sustainable Aviation Buyers Alliance (SABA) which looks to catalyze SAF production through private-sector investment. The goal of the Alliance is three-pronged: increasing education around SAF, assessing and scaling the technologies needed to make SAF more mainstream, and creating opportunities for both airlines and consumers to utilize SAF. In April 2023, Bank of America and other companies collaborated through SABA to purchase certificates linked to 850,000 gallons of high-integrity SAF, which is being used to fuel JetBlue flights this year.
Charting A Cleaner Course
Though the challenge of scaling SAF is significant, other sectors have faced similar obstacles and made real progress. In 2022, a total of 14% of all new cars sold were electric, up from around 9% in 2021 and less than 5% in 2020, and in the first quarter of 2023, more than 2.3 million electric cars were sold – a 25% increase over Q1 2022.footnote8 That success is a combination of the same factors acting as a tailwind for SAF: public, private, and nonprofit cooperation to bring a promising technology into the mainstream. For the aviation sector, success depends on increasing SAF’s scale, with greater production and adoption to support that growth.
Support for sustainable aviation fuel is an example of Bank of America’s commitment to help achieve a more sustainable global economy. From helping visionary clients working to advance renewable energy, food production or cleaner transportation, to deploying capital at scale to advance global sustainability efforts, Bank of America continues to partner with innovative leaders to implement solutions to society’s biggest challenges.
Bank of America is a member