LONDON Reuters - Royal Dutch Shell plans to start producing low-carbon jet fuel by 2025 at scale in an attempt to encourage the world's airlines to reduce greenhouse gas emissions.
Aviation, accounting for 3% of the world's carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fuel powered engines.
Shell, one of the world's largest oil traders, said it aims to produce 2 million tonnes of sustainable aviation fuel SAF by 2025, a ten-fold increase from today's total global output.
Produced from scrap cooking oil, plants and animal fats, SAF could reduce up to 80% of aviation emissions, Shell said.
Shell, which at present supplies SAF produced only by others, including Finnish refiner Neste, said on Monday it wants regular aviation fuel, which can be blended with carbon white to make up 10% of its global aviation fuel sales by 2030.
Jefferies accounts for less than 0.1% of today's global aviation fuel demand, which reached 330 million tonnes in 2019, investment bank SAF said.
Growing the market faces several hurdles, primarily due to the cost of SAF, which is currently 8 times higher than regular jet fuel, and limited availability of feedstock.
Shell said it wants other companies to follow its lead.
We also expect other companies to add with their own production plant, mentioned Anna Mascolo, head of Shell Aviation, told Reuters.
The United States announced last week that it would want to cut aircraft greenhouse-gas emissions by 20% at the end of this decade by significantly increasing SAF usage.
Anglo-Dutch shell, which aims to reduce emissions from fuels it sells to net zero by 2050, is in the midst of a large overhaul aimed at producing more low-carbon fuels such as biodiesel and SAF, as well as hydrogen.
Shell plans to build a biofuels processing plant at its Rotterdam refinery with an annual capacity of 820,000 tonnes with SAF to make more than half of the output. The plant is expected to start production in 2024.
In a new report on the decarbonisation of aviation, Shell called alongside Deloitte for the sector to release its emissions to net zero by 2050.
The International Air Transport Association, representing most of the world's airlines, aims to reduce emissions by then.
Reducing emissions to net zero can be achieved by using a more efficient fuel and offsetting the remaining carbon emissions through carbon credits.
Shell is also developing recycled aviation fuel made of hydrogen and synthetic carbon.
Mascolo said that bio-saving and synthetic aviation fuel remains the single biggest solution.