As airlines go greener and look to safely and cost effectively replace fossil fuel-derived jet fuel, they are increasingly turning to sustainable aviation fuel (SAF) to lower carbon emissions, making headlines with a string of firsts.

Virgin Atlantic recently became the world’s first commercial airline to cross the Atlantic—a London Heathrow to New York JFK jaunt — on 100% SAF. TotalEnergies and Masdar advanced the development of SAF with a successful test flight fueled by a blend of aviation fuel made from olefins, paving the alcohol-to-jet synthetic paraffinic kerosene pathway.

United Airlines, which has formed partnerships with startups like Cemvita Factory and others such as Aramco Ventures and Honeywell, has invested in the future production of more than 5 billion gallons of SAF. United was the first U.S. airline to test SAF in 2009 and became the first U.S. airline to use SAF on regularly scheduled flights in 2016.

Made with a variety of feedstocks that include agricultural waste, algae, corn grain and used cooking oil, the biofuel SAF has similar properties of traditional jet fuel but with fewer emissions. SAF’s lower carbon intensity makes it a fuel of choice for airlines looking to shrink carbon footprints, since it has the potential to reduce commercial aviation CO2 emissions by up to 80%, according to the International Air Transport Association.

Problem is, there isn’t enough SAF being produced today to make a dent in the sector’s greenhouse-gas emissions. In pre-pandemic 2019, U.S. airlines consumed 18.27 billion gallons of fuel, according to statistics from the U.S. Transportation Department.

Plus, SAF costs are higher than jet fuel. Though SAF production increased to 600 million liters, up from 300 million in 2022, it represented only 0.2% of global jet fuel use.

Andrew Chang, managing director for United Airlines Ventures, spoke with Hart Energy about the carrier’s emissions reduction efforts involving SAF and the role United Airlines Ventures wants to play in net-zero aviation.

Andrew Chang
Andrew Chang. (Source: United Airlines Ventures)

Velda Addison: How is United Airlines striving to make net- zero aviation possible?

Andrew Chang: We’re trying to decarbonize the airline and aviation without the use of traditional carbon offsets. That means looking at the core business. When you look at aviation as a whole, 98% of our emissions comes from jet fuel consumption. So, the problem or challenge for us is easy to identify; it’s jet fuel itself. Without getting into the details of chemistry and physics, we believe finding an alternative fuel source—that’s not carbon based —is the way we’re going to travel sustainably. There are other means, hydrogen and electric batteries, but we don’t see those as a viable means [for] flying transcontinental, international, long haul.

VA: About how much SAF does United Airlines use today, and what are your targets as far as increasing that percentage?

AC: I think our usage and offtake agreements for the future probably lead the industry. That said, it is a very, very small amount [0.1%, according to the company’s website] and it goes back to the core of the problem here, which is there’s just not enough SAF. We’re trying to produce more of it, but there’s really two problems. What are the different ways to produce sustainable aviation fuel? So that could be a feedstock issue or it could be a technology issue. There are different pathways and different feedstocks that you can pursue to create a renewable energy, and SAF will be a component of that product slate.

Cost is [the] second hurdle. Not only does it need to be possible to be produced in some chemical pathway, but you need to do it in a way that’s economic for us as a consumer. You and everyone in our flying public are very sensitive to pricing and costs of air travel. So, as an airline, as a service, we cannot bare it; you cannot bare it. There is a heavy focus on maintaining cost discipline so that flying in general can remain economic.

VA: What are some of the possible solutions? Looking at supply first, supplies of SAF still pale in comparison to traditional aviation fuel. What will it take to overcome some of those supply challenges?

AC: The first piece is how to find more ways to make it. I think that’s a big driver of why we created United Airlines Ventures, which is to study new innovative feedstocks and technologies, different ways to create the sustainable aviation fuel. More ways of making the SAF can result in more SAF production, and that’s the “how to do it.” Then once you figure out how to do it, there is a scaling component—going from lab scale to demo scale to commercial scale as you go 10x, 10x, 10x in terms of production capacity. For each of those scalings, it’ll amortize fixed costs and lower overall costs. But scaling only addresses a fixed cost component. We need to evaluate variable cost components around technology, increasing efficiency, increasing supply of various feedstocks that aren’t limited in nature. All of those will drive costs in different ways.

VA: Is it possible to combine the different feedstocks into one fuel? Do the chemistries mesh?

AC: They could, and that’s where we try to find synergies. That’s the way UAV [United Airlines Ventures] is trying to accelerate innovation, R&D and tech development. Could one feedstock or one byproduct of a particular process be fed into, enhance or support another process? Could two steps be combined into one with the catalyst? Those types of things we do look at, and there are synergies.

VA: What role can regulations play in advancing the use and production of SAF?

AC: Regulation is critical. With SAF, or renewable fuels, you’re trying to create something artificially that fundamentally costs more, certainly today, before we scale versus the natural biological means, Mother Nature, thousands, millions of years creating fossil-based fuels. There is inherent energy in that and we’re trying to duplicate that in an artificial way. And so, it comes down to cost, and having the regulatory framework to incentivize support whether through tax credits or other means is helpful.

Being inclusive and being thoughtful in what kinds of technologies and feedstocks would be helpful is also important. As an airline, we’re currently not at a point where we have the luxury of being too picky. We have to be fairly broad and open minded. There are certain things out there that are off limits, I’m sure, from a feedstock and from environmental challenges. But those constraints aside, we do need to be quite open minded in what could work and in supporting SAF development.

VA: The U.S. has been working quite hard to build up its hydrogen economy. What are your thoughts on using hydrogen as a sustainable aviation fuel?

AC:  There’s a couple of ways to look at it. So, hydrogen as a direct fuel source has its challenges for aviation. The volumetric density of hydrogen when you try to compare it to liquid hydrocarbons is fairly different. It will require a different plane. It takes more volume. So, you’re going to be losing revenue, and in a very competitive margin environment, anytime you’re giving up the potential of generating revenue on top of what’s already an increased cost basis from something like this, it’s challenging. Think about [the] infrastructure that’s required. I'll give an example: when you divert a flight, you go from a hub to maybe a station. Does that station have hydrogen infrastructure? So, from a hydrogen fuel source, I think it’s much longer term. I don’t think it’s necessarily a near- or medium-term direct fuel source given those challenges.

Hydrogen as a feedstock? Absolutely, we are interested. Hydrogen has a lot of different potential end markets, use cases. There’s a lot of people looking at it; a lot of money going into it; a lot of investors and stakeholders interested in it. So why not benefit from that common interest and capital going into that market? Hydrogen is one of the core areas we’re evaluating as part of the Sustainable Flight Fund within United Airlines Ventures. Hydrogen/carbon capture as feedstocks to power to liquids, then you combine it with renewable power—that is a way to make renewable fuels. So, we do like hydrogen as a feedstock, as a building block for sustainable aviation fuel.

VA: United Airlines Ventures has formed several relationships with companies through the years, both within and outside the aviation industry. Can you tell me a little bit more about the importance of partnerships in the company’s net-zero ambitions?

AC: Partnerships are critical. We firmly believe in coalition building. We represent aviation, but this an energy challenge, and energy and aviation touch every sector out there. You look at personal and professional goals and objectives and activity, aviation touches it in some way. What we are trying to do as an airline, as a B2C company, as a global brand, is to make sure we drive those discussions. We drive those companies. That is one of the founding principles for the Sustainable Flight Fund, which is to deploy not only financial and strategic capital of United Airlines, but also of our corporate customers and partners.

When you look at the LPs in the fund, they are also leaders in their respective industries. You have Boeing and GE, Honeywell, Chase and Bank of America, BCG, Aramco. Each of them represents a discipline or a sector that that can help accelerate SAF development. We are just the end user, the end purchaser. We’re not looking to be in the SAF production business. I get that question sometimes. That’s more of an effect of the investments we make. We’re minority owners, minority interest and stakeholders, in some of these companies. But all we’re trying to do is accelerate R&D type development and discussion; make sure the right people are talking to one another rather than waiting three or five years where without our involvement, they may not be aware of one another.  So that is critical in what we’re doing.

VA: When you’re deciding which companies to invest in and which technologies to pursue, what attributes or factors are you looking for?

AC: I think what immediately comes to mind is the management team. Personality, innovation, drive, motivation and experience—there are a lot of factors. But it ultimately goes back to the management team. Even if you have a silver bullet, even if you have the greatest idea, if you don’t have the proper management team, if you don’t have the proper person to execute it, that great idea will be wasted. So, we always look at that first and foremost. Beyond that, we look at what is proprietary about the company. Is it a particular technology? Is it a catalyst? Is it a different way to address a feedstock and develop it so that it becomes an intermediate that could then be produced or developed into a fuel? So of course, there’s that diligence component of what makes you special. What new way are you thinking to create renewable fuels and renewable energy broadly? And, is it going to work? Is there a pathway to reducing costs?

VA: Are there any emerging technologies that you are particularly bullish on right now?

AC: With the Inflation Reduction Act, it’s really driven a lot of supplies around power-to-liquids, carbon capture and hydrogen as building blocks. We’re evaluating multiple ways to process, capture and produce renewable hydrogen. And then CO2 as a feedstock is interesting because it’s everywhere. Whether it’s point source or from direct air capture, if you can process, capture and utilize that CO2 or sequester it economically, that can drive cost reduction and scale of liquids production processes.