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Sustainable Aviation Fuel

Air France-KLM Group inks two major SAF offtake deals

Air France-KLM Group inks two major SAF offtake deals
With a fleet of 537 aircraft (divided between Air France, KLM Royal Dutch Airlines, and Transavia), Air France-KLM Group provides services to up to 300 destinations in 117 countries, mainly from its central hubs in Paris-Charles de Gaulle (CDG) in France and Amsterdam-Schiphol (AMS), the Netherlands (photo courtesy Air France-KLM Group).

The French-Dutch airline carrier Air France-KLM Group (AF-KLM) has announced that it has signed two sustainable aviation fuel (SAF) offtake agreements that combined represent 3 of the Group's 10 percent SAF by 2030 target.

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Fully committed to reducing its environmental impact, the Air France-KLM Group aims to reduce its carbon dioxide (CO2) emissions per passenger/km by 30 percent by 2030 compared to 2019 – a target that has been submitted to the Science Based Targets initiative (SBTi).

The Group’s decarbonization trajectory includes fleet renewal and eco-piloting and the incorporation of 10 percent SAF by 2030 goal.

Furthermore, it is also incorporating up to 1 percent SAF on a one-year overall for its flights from France and the Netherlands, in order for it to comply with the French legislation in force since January 2022.

Decarbonization is the biggest challenge the aviation industry has ever faced. Air France-KLM is activating all available levers to reduce its environmental impact: fleet renewal, eco-piloting, and the increased use of certified Sustainable Aviation Fuels said Benjamin Smith, CEO of Air France-KLM.

Offtakes with Neste and DG Fuels

A decisive step forward in the latter, incorporating SAF, has been made by signing the first set of long-term supply agreements – with Finland-headed oil refiner and renewable products major Neste Oyj and US-based SAF developer DG Fuels LLC respectively – to cover the SAF needs of its airlines for the coming years.

Benjamin Smith, CEO of Air France-KLM Group (photo courtesy Air France-KLM Group).

These first two agreements cover the supply of a total volume of 1.6 million tonnes of SAF between 2023 and 2036 and will cover approximately 3 of the 10 percent SAF requirements.

The agreement with Neste is for the supply of 1 million tonnes over the period 2023 to 2030, while the deal with DG Fuels is for the supply of 600 000 tonnes over the period 2027 to 2036.

Partnership discussions are currently underway to add additional suppliers with the aim of gradually establishing a diversified network capable of meeting Air France-KLM Group’s supply needs worldwide.

Air France-KLM points out that it has established a strict sourcing policy under which it commits itself only to purchase SAF that does not compete with human food or animal feed supply, that is Roundtable on Sustainable Biomaterials (RSB) or International Sustainability and Carbon Certification Plus (ISCC PLUS) certified for their sustainability, and is not derived from palm oil.

The contracts we have signed embody our long-term commitment to the development of SAF production capabilities around the world, to the benefit of the industry as a whole. We look forward to working with Neste and DG Fuels, with whom we have established solid partnerships which will pave the way to the creation of a global network of providers capable of meeting our future needs, Benjamin Smith said.

One of the largest SAF deals to date

By committing to long-term fuel purchases now, Air France-KLM says that it supports the development of the SAF production industry, which is still in its infancy worldwide – in 2021, SAF production represented 0.01 percent of the jet fuel consumed worldwide – resulting in prices 3 to 4 times higher compared to conventional kerosene.

By increasing use and demand, Air France-KLM aims to play its part in increasing the scale of commercial SAF production for wider adoption by 2030.

The new eight-year SAF agreement with Neste is one of the largest of its kind in the aviation industry to date.

Neste is fully committed to helping the aviation industry achieve its 2050 net-zero carbon emissions target, and sustainable aviation fuel will play a central role in that effort. Today’s announcement, which marks a significant next step forward in our cooperation with Air France-KLM Group, underscores how we continue to support companies to reduce their greenhouse gas emissions. Neste aims to help customers cut emissions by at least 20 million tonnes of CO2eq annually by 2030 with our renewable and circular solutions, said Matti Lehmus, President and CEO of Neste.

The agreement builds on SAF supply to the Air France-KLM Group which started in 2019 but the two companies have been working together for several years with KLM being one of the first airlines using Neste MY Sustainable Aviation Fuel.

This landmark partnership with Neste is an important and concrete step towards the decarbonization of our operations. This contract embodies our long-term commitment to the development of SAF’s production capabilities around the world, to the benefit of the industry as a whole, said Fatima Gloria de Soussa, Director of Sustainability, Air France-KLM Group.

As the world’s leading producer of SAF, we are helping the aviation industry to work towards a more sustainable future, already today. This long-term collaboration with Air France-KLM shows how we are working together in a number of areas. By the end of next year, Neste will have an annual SAF production capacity of 1.5 million tonnes, ready to support the Air France-KLM Group and other airlines in Europe and across the globe, said Thorsten Lange, EVP, Renewable Aviation at Neste.

A major break for DG Fuels

For cellulosic-derived SAF developer DG Fuels, the contract is expected to make Air France-KLM the firm’s largest European airline customer.

It also lays the groundwork for the expansion of this commercial relationship as DG Fuel scales up production at its inaugural planned Louisiana (LA) facility and additional planned SAF production plants to be located in the United States and beyond.

The Louisiana project is being undertaken by Black & Veatch, which is performing feasibility, early engineering, and environmental permitting work as well as engineering, procurement, and construction (EPC) execution.

In total, the definitive offtake agreement with Air France-KLM Group covers up to 604 086 tonnes (210 million US gallons) of SAF over a 10-year period.

DG Fuels is committed to developing and supporting initiatives that provide practical and sustainable benefits to airlines around the world. We are proud to take this next long-term step alongside Air France-KLM in supporting the lasting sustainability of our planet by reducing the impact of airline travel on the environment, said Michael C. Darcy, CEO of DG Fuels.

According to DG Fuels, its patented system design is expected to have a carbon intensity (CI) score of -39 grams per megajoule, which is 140 percent lower than conventional fossil Jet A.

In addition, its SAF formula has a higher energy density than conventional Jet A, providing airline customers with operational advantages in addition to environmental benefits.

DG Fuel’s production system relies entirely on cellulosic waste products like timber trimmings from the logging industry and renewable energy such as wind and solar.

According to the company, its high carbon conversion efficiency fuel production strategy meets the highest RSB or ISSC standards of environmental fuel production. The cellulosic feedstock does not impair food supply and is essentially water neutral.

Water electrolysis for green hydrogen supply is sourced mostly from byproduct water created by the rest of DG Fuel’s fuel production process and powered by renewables.

We have worked diligently with Air France-KLM in implementing this long-term partnership. With this agreement, Air France and KLM now join DGF’s three other disclosed and undisclosed launch customers under binding agreements totaling over 130 million gallons per year, said Christopher J. Chaput, President and CFO of DG Fuels.

A pioneer in the use of SAF

These significant off-take agreements made by Air France-KLM are key to the Group’s decarbonization commitments.

The efforts will be reinforced by additional environmental commitments in the coming years such as new SAF contracts, R&D on e-fuels or hydrogen, and Direct Air Carbon Capture and Storage (DACCS ).

The Group has been investing in the testing and use of SAF for more than 15 years. In 2011, KLM conducted the world’s first commercial flight partially fuelled with SAF, while Air France launched the ‘Lab Line for the Future’ in 2014, a two-year experiment during which 78 flights between Paris-Orly (ORY) and Toulouse (TLS) and between Paris-Orly and Nice (NCE) were partially fuelled with SAF.

Air France-KLM also supports the development of a production chain in France and the Netherlands. In 2020, Air France worked together with Airbus, Safran, Suez, and Total to promote the growth of the SAF production chain in France.

The following year, Air France operated its first long-haul flight fuelled by SAF produced entirely in France, while KLM operated the world’s first commercial flight with synthetic fuel produced in the Netherlands.

In June this year, several SAF-powered flights were operated by all of the Group’s airlines as part of the ‘Connecting Europe Days’ organized by the European Commission.

However, the Group notes that the global objective of zero net emissions by 2050 can only be achieved if all public and private parties work together to make this transition a success.

This could involve incentive mechanisms, such as those already in place in the United States and notably in the state of California (CA).

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