The SABA team recently hosted a webinar on “Driving Scale and Sustainability in the SAF Market” that summarized highlights and lessons learned from its historic, multi-year Request for Proposals(RFP) for high-integrity Sustainable Aviation Fuel certificates (SAFc). Through SABA’s RFP process, close to 20 corporate customers have agreed to purchase SAFc for nearly 50 million gallons of high-integrity SAF, equal to about 500,000 tons of CO2e abatement, and a $200 million investment, cumulatively, over five years. During our May 1 webinar, speakers from Watershed, World Energy, Novo Nordisk, Twelve and Alaska Airlines shared their perspectives on the SABA RFP covering three major themes: the power of demand aggregation, the importance of long-term contracts, and prospects for scaling advanced fuel technologies.
The webinar featured a lively Q&A, but we were unable to answer all the questions live. Here our top six questions from the webinar, fielded by SABA experts:
SAFc prices observed through the SABA RFP ranged widely. The differences were driven by the availability of financial incentives in different geographies, variability in feedstock prices, and the willingness, in some cases, of an airline partner to cover a portion of the SAF premium. The range in prices was observed even across fuels using the same feedstock type and conversion process. We anticipate this will change as the SAF market matures and more homogenous pricing will begin to emerge for comparable fuels.
SABA aimed for an equitable distribution of SAFc to its member companies and sought to avoid having companies pay widely different prices for effectively the same fuel. To achieve this, SABA asked several of its member companies to purchase SAFc from multiple providers in a “portfolio approach,” with each portfolio carrying a roughly comparable weighted average SAFc price.
SABA is constantly engaging with incumbent and emerging fuel providers. SABA maintains a fuel providers consultative group, which provides feedback on our developing plans and initiatives. This group also receives news on future engagement opportunities. If you are interested in joining our fuel providers consultative group and receiving news on future procurements, please email us at info@flysaba.org.
SABA has learned a lot from its RFP processes and intends to use those lessons to inform future procurement processes. SABA’s next procurement will focus on both commercially available and more forward-looking purchases for advanced fuel technologies.
SABA procurements are open to both fuel providers and airlines looking to sell the environmental attributes from SAF. In advance of our next procurement, we encourage fuel providers to review SABA’s Sustainability Framework to understand the criteria SABA applies in selecting eligible fuels for purchase by its members.
SABA supports the use of high-integrity SAFc toward corporate climate reduction targets and will continue to work with appropriate GHG accounting and target-setting bodies as they consider the issue.
In the absence of clear guidance from standards bodies, SABA members are leading the way towards credible accounting for SAFc in their inventories by following current guidance in addition to separately reporting emissions totals that include Scope 3 reductions from book-and-claim.
For the time being, SABA recommends that corporate purchasers of SAFc follow existing SBTi guidelines, including obtaining reasonable proof of fuel consumption/combustion, demonstrating environmental benefits associated with the SAF used, proving clear chain of custody for the SAF consumed down the value chain, and including full accounting of Well-to-Wake emissions from all fuel consumption. Each of these criteria can be monitored and verified through the SAFc Registry.
Corporations are already disclosing their use of SAFc in their public reports in a transparent manner. For more information on best practices in accounting for and disclosing SAFc use in the context of Business Travel and Cargo Emissions, please see SABA’s education brief here.
SABA’s Sustainability Framework, and the embedded Atmospheric Benefit Principle, addresses whether voluntary emissions reductions claims should be made for the use of SAF that is also being reported in various regulatory programs. The Atmospheric Benefit Principle states that emission reductions from SAF being claimed for use toward voluntary climate targets will need to generate emissions reductions beyond those already required by compliance obligations, creating an atmospheric benefit. Emission reductions from SAF used to comply with blending mandates such as the ReFuelEU, UK, or Norway blending mandates cannot be used as SAFc for voluntary emissions reductions claims because the SAF production and its associated emissions reductions are already required by law and do not create atmospheric benefit.
SAF can, however, benefit from incentive programs, such as tax credits, and still be claimed toward voluntary climate targets, according to SABA’s Atmospheric Benefit Principle.
Demand aggregation is a core principle of SABA’s work, and market intermediaries play an important role in expanding investment into SAFc to scale the market. Within the nascent SAF market, many small buyers are unable to structure deals or execute contracts without additional support. Market intermediaries aggregate demand from small buyers to enhance their purchasing power and support their procurement goals. A few companies have already pioneered the aggregator role within SABA, providing SAFc to their customers through SABA’s RFP process. Other intermediaries are increasingly getting involved to support their customers’ SAFc demand and contribute to SAF market growth.
If you are interested in learning more about SABA and joining as an aggregator, please email us at info@flysaba.org for more information.
Registries are crucial tools to bring additional transparency and credibility to the sale of environmental attributes. The SAFc Registry is being used as the central platform to record the SAFcpurchased through this RFP. Key advantages of the SAFc Registry include:
