Post on 14-Jul-2022
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Dr Christoph WolffHead of Mobility Industries
World Economic Forum
Ramping up Sustainable Aviation Fuels
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Sustainable Aviation Fuel is the only
near-term large-scale decarbonization
option for the industry
There is enough sustainable
feedstock available to power aviation
in 2030, and beyond
- Power-to-Liquid / e-fuels use captured CO2 as
a feedstock and are thus unrestricted. Today's
technology is not yet fully mature.
SAF could become economically viable
but requires supportive regulatory
framework
-Power-to-Liquid has the biggest potential for cost
decrease and will eventually become the most cost
competitive alternative.
There is no silver bullet! Different
regions will transition to new
technologies at different pace
There is enough sustainable feedstock available to power aviation in 2030 and beyond
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SAF pathways in focus have different opportunities and challenges depending on feedstock and technology maturity
Source: CORSIA; RED II; De Jong et al. 2017; GLOBIUM 2015; ICCT 2017; ICCT 2019; E4tech 2020; Hayward et al. 2014; ENERGINET renewables catalogue; Van Dyk et al., 2019; NRL 2010; Umweltbundesamt 2016
Opportunity
description
Safe, proven, and scalable technology Proof of concept 2025+, primarily
where cheap high volume electricity is
available
Potential in the mid-term, however significant techno-
economical uncertainty
Technology
maturity
Mature In developmentCommercial pilot
Feedstock Agricultural and forestry residues, municipal solid waste4,
purposely grown cellulosic energy crops5
High availability of cheap feedstock, however fragmented
collection
Waste and residue lipids, purposely
grown oil energy plants2
Transportable and with existing supply
chains
Potential to cover 5-10% of total jet fuel
demand
CO2 and green electricity
Unlimited potential via direct air
capture
Point source capture as bridging
technology
% LCA GHG
reduction vs.
fossil jet
73-84%3 99%785-94%6
HEFA Alcohol-to-Jet1 Gasification/FT Power-to-liquid
1. Ethanol route; 2. Oilseed bearing trees on low-ILUC degraded land or as rotational oil cover crops; 3. Excluding all edible oil crops; 4. Mainly used for gas./FT; 5. As rotational cover crops; 6. Excluding all edible sugars; 7. Up to 100% with a fully
decarbonized supply chain
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Scale-up of SAF production encounters multiple potential roadblocks – pathways have specific challenges
Pathway Potential mitigation measure
Power-
to-Liquid
Potential road blocks
Validate technology feasibility in sync with H2 and FT
cost decreases and consider alternative process designs
such as co-electrolyzer (SOEC) without the RWGS step
Technology complex at scale-up: Issues with scale-up of
technology, especially Reverse-Water-Gas-Shift (RWGS) step
Carefully choose H2 production locations providing
lowest cost of renewable electricity and support deep
decarbonization across other sectors to scale-up H2
uptake
High costs of sustainable H2: Potentially insufficient scale of
green hydrogen in other sectors for substantial cost decline
Focus on CO2 captured from biomass-use first (strategic
location in high-density industrial clusters) and invest into
direct air capture technology
Lack of sustainable CO2 supply: Neither direct air capture
carbon dioxide nor biomass based point source capture
available at scale
Refine or alter process to reduce required amount of
electricity (e.g. via Power-and-Gas-to-Liquid) and
support general green electricity turnaround
Extremely high electricity need: Current process consumes a
large amount of energy that has to be produced sustainably
and faces increasing usage competition from other sectors
It is technically feasible to reach 10% SAF jet fuel uptake in Europe by 2030 with strong policy and financial support
Note: Assume 40% of all sustainable biomass available in Europe is used for conversion to aviation biofuels – potential upside from imported biomass or finished SAF product from external regions (see results from scenario 3 below). EU jet fuel demand refers to EU28 including the UK. Source: ETC Analysis.
6
0
5
10
15
20
25
30
35
40
45
50
55
60
20252020 204520402030 2035 2050
PtL
AtJ
HEFA
G+FT
~10% Total EU Jet Fuel Demand ~75% Total EU Jet Fuel Demand
Feasibility Assessment Results – Central Case Scenario: SAF Output by Technology Pathway Mt./yr.
Achieving this ramp up requires
building approx. 40 operating
SAF plants, requiring ~ EUR 5 bn
per year of capital investment
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SAF production costs vary significantly by pathway
Source: Expert interviews; McKinsey analysis
2020
SAF production costUSD/t of SAF
2030 2040 2050
Lower range for
PtL in regions with
cheap renewable
power potential
(e.g., middle east)
HEFA Gasification/FT Alcohol-to-Jet Power-to-Liquid
Jet fuel price
5,500
500
2,500
4,000
2,000
0
1,500
1,000
3,000
3,500
4,500
5,000
6,000
1,850-
2,250
1,100-
1,650
2,000-
2,900
1,500-
5,500
1,500-
2,350
985-
1,400
1,550-
1,950
1,250-
2,700
950-
1,350
1,400-
1,800
1,400-
2,2001,000-
1,700 920-
1,300
1,300-
1,700 850-
1,370
1,300-
2,100
Global SAF production cost shown for a range of selected feedstocks
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UPM, Kotka
Velocys, Altatto
Lanzatech, Wales
Total, Grandpuits
Kaidi, Kemi
Sunfire, Nordic Blue
Total, Dunkirk
SkyNRG, DSL01
Enerkem, Rotterdam
ST1, Gothenburg
Caphenia, Dresden
ENI, Gela
ENI, Venice
Preem, Gothenburg
Colabitoil, NorssundetFulcrum, Stanlow
Engie, Normandy3
Synkero, Amsterdam2
UPM, Lappeenranta
Neste, Porvoo
Copenhagen Airport1
Total, La Mede
CEPSA, San Roque
Repsol, Cartagena
Neste, Rotterdam
Announced Projects with SAF Production Capacity in Europe 2020-2025
Note: * Pilot/demo plans. 1 This project is a partnership between Copenhagen Airports, A.P. Moller - Maersk, DSV Panalpina, DFDS, SAS and Ørsted to trial-scale production facility to produce sustainable fuels for road, maritime and air transport in the Copenhagen area. 2 Final investment decisions expected in 2021. Source: ETC, McKinsey, IRENA (2017) Maersk, Neste, press releases.
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Risk of delays due
to COVID crisis
Copenhagen Airport plans to
use SAFs from PtL for 30% jet
fuel consumption by 20301
HEFA (new)
G+FT
PtL
AtJ
HEFA (existing)
Pathways
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McKinsey & Company 10
Chilean Synthetic Jet Fuel produced with DAC is projected to be cost competitive vs. SAF alternatives by 2030
Global SAF production cost by source, 000s USD per ton of Jet Fuel
2030 20402025 Pre-2030:
Total Addressable Market
Synfuels form part of early-SAF
mix (potentially using
industrial sources) as airlines
seek to establish future,
highly scalable
decarbonization options
~2030 DAC Synthetic Jet Fuel
made in Chile will compete
closely with HEFA
economically and benefit from
greater scalability and
perceived environmental
friendliness
Post-2030:
McKinsey & Company 10
Gasification / Fischer Tropsch Power – To – LiquidAlcohol – To – Jet HEFA
0,8
0,2
1,0
0
1,2
0,4
0,6
1,4
1,6
1,8
2,0
2,2
2,4
1,9
1,6
2,1
1,3
1,8
1,2
1,7
1,9
1,4
1,2
1,8
1,2
1,2
1,81,9
1,7
1,3
1,21,1
1,5
1,7
1,21,0
1,4
1,6
1,0
Industrial
sourced CO2
DAC1
DAC1
DAC1
Source: Clean Skies for Tomorrow Report World Economic Forum report; McKinsey team analysis
McKinsey & Company 11
By 2030, synfuel (jet) costs from production in Chile could get close to USD 1,000 per ton
Source: McKinsey
0
200
400
1,400
1,000
600
1,600
800
1,200
1,800
2,000
2,200
20302025 2035 2040
North Industrial
Source CO2 Cost
USD/T CO2
Traditional DAC
CO2 Costs
USD/T CO260 60 60 60 250 100 92.5 85
Breakthrough
DAC CO2 Costs
USD/T CO2
South Industrial
Source CO2 Cost
USD/T CO2105 105 105 105 30 30 30 30
1,230-1,360 1,110-1,225 1,055-1,165 980-1,085
1,265-1,395 1,180-1,305 1,120-1,240 1,080-1,195
South
North
South
North
Industrially Sourced CO2: Production cost curve for Jet Fuel /
DieselUSD / Ton of Jet Fuel / Diesel
DAC Sourced CO2: Production cost curve for Jet Fuel /
Diesel USD / Ton of Jet Fuel / Diesel
1,200
200
0
1,400
800
400
600
1,000
1,600
1,800
2,000
2,200
2025 2030 2035 2040
1,230-1,360 1,160-1,060
1,165-1,290 1,020-1,130
1,825-2,015 1,155-1,280
1,085-1,200
1,715-1,900
980-1,085 870-9601,085.1,200 925-1,020
Breakthrough
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Thank You
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