HomeCarbon NewsMeta, Bank of America, JPMorgan Chase to buy SAF Credits

Meta, Bank of America, JPMorgan Chase to buy SAF Credits

The Sustainable Aviation Buyers Alliance (SABA) members will buy sustainable aviation fuel (SAF) certificates or credits, allowing entities to buy scope 3 emissions credits.

For the first time, major companies such as JPMorgan Chase, Bank of America, Meta, Boston Consulting Group, Boom Supersonic, and non-profit RMI join together to buy credits for about 850,000 gallons or 2,576 tons of SAF

The biofuel will power JetBlue flights this year.

This first joint procurement is a leap forward from SAF credits purchases by companies in the past. Industry experts believe this will dramatically boost the demand signal that customers send to the SAF credits market.

Commenting on the historic purchase, head of Net Zero Strategy at Meta, Devon Lake said:

“SAF certificates enable corporate aviation customers like Meta to credibly and transparently contribute to decarbonizing the aviation sector. Buying SAF through SABAs collective procurement process allows us to go one step further and send a strong and coordinated demand signal to the market.”

What’s the Sustainable Aviation Buyers Alliance?

The Sustainable Aviation Buyers Alliance or SABA is a joint initiative of clean energy non-profit MRI and the Environmental Defense Fund aimed at speeding up the path to net zero aviation by attracting investment in SAF. 

According to MRI, they started working on the concept of SAF credits and market demand signals in 2019. The first procurement is a culmination of that effort. 

The alliance’s founding members are large companies, including JetBlue, Boston Consulting Group, Boeing, JPMorgan Chase, Bank of America, Microsoft, Netflix, Deloitte, and Salesforce.

SABA’s work involves this three major areas:

  • Education and policy support: by helping members explore the technical attributes of SAF and its market, policy landscape and aviation emissions accounting
  • Technology innovation: by evaluating novel SAF technologies and working with like-minded organizations to manage barriers to entry
  • Investment opportunity: by establishing a transparent SAF crediting system that enables not just operators but also flyers to invest in high-quality SAF to achieve their climate goals

Net Zero Aviation with SAF

The SAF that the SABA members will buy is produced by World Energy, working to make net zero real. World Energy is currently producing 144,000 tons per year of SAF in Paramount, California.

The organization has a refinery that will go online at the same site with a capacity of 576,000 tons a year. It has a bigger plant that will start operating in 2025 in Houston, Texas, capable of producing over 700,000 t/yr.

Why SAF?

SAF is a drop-in fuel made with renewable or waste materials that can significantly reduce the carbon emissions of air travel. It has the potential to cut down the carbon intensity of flights by around 84% or 8,500 tons

However, SAF makes up only 0.1% of the global aviation fuel supply and has a premium price compared with conventional fossil jet fuel. That is because of insufficient, disaggregated demand and cost barriers to SAF production. 

Each SAF certificate or credit is equal to one ton of biofuel produced. 

In the U.S., about 1 billion tons of biomass can be collected each year to produce 50 to 60 billion gallons of biofuels like SAF. The biomass sources vary, including:

  • Corn grains
  • Oil seeds
  • Algae
  • Agricultural and forestry residues
  • Municipal solid waste streams
  • Wood mill waste
  • Wet wastes and other fats, oil, and grease

Companies buying SAF credits will pay some or all of the premiums associated with SAF. And their purchases will help pursue decarbonization efforts that directly slash CO2 emissions in the aviation sector. 

Also, SAF credits will deliver the following functions:

SABA will launch its 2nd competitive process where it plans to buy SAF credits across a 5-year period. The organization expects to grow its annual demand by over 10x this second time compared to the first procurement.  

The second process will be open to all fuel providers and airline operators. 

SABA members will also pilot a new digital registry to bring more transparency, consistency, and integrity for SAF credits. This is crucial to build trust in the system and convince more companies to buy the certificates.

The estimates by the International Air Transport Association (IATA) show that SAF will account for 65% of mitigation needed by aviation. And the industry expects this to grow even more as the world economy races to net zero.

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