SAF production to be guaranteed by blockchain technology
“Blockchain technology will play an important part in the development of sustainable air fuel [SAF],” according to Kennedy Ricci, president, 4Air.
Backed by blockchain technology to prove its carbon-reducing credentials, Directional Aviation, Alder Fuels, 4Air and Flexjet partnered to launch a new type of next-generation SAF last week. Ricci said this tool is a big step for the sector in proving its legitimate carbon benefits.
Blockchain technology is a digital ledger that records transactions and tracks assets throughout a business’s network. In the new partnership, the tool will provide transparency about the production of SAF and document its compliance with regulatory programmes, environment, social and governance (ESG) targets and carbon reduction milestones for business aviation.
Speaking to Corporate Jet Investor, Kennedy Ricci said: “We have big goals for SAF and its deployment in business aviation, so we need a scalable transparency and traceability model. Our hope is to support that with what 4Air does with Alder and the new technology.”
The private aviation investment firm, Directional Aviation revealed an undisclosed financial investment in SAF producer, Alder Fuels last Thursday (September 15th). The investment will enable Alder to scale up production of Alder Greencrude (AGC), its second-generation SAF, and supply it to Flexjet.
Flexjet has committed to using a 12% of its fuel from SAF. This is one of the first deals of its kind within private aviation, and the shared ownership operator will pilot the blockchain technology tool along with 4Air and Alder.
Whilst some airlines have made similar commitments, business aviation is taking a sizeable portion of the SAF market. “Of the 4 million gallons of neat SAF that were produced last year, private aviation took 50% of that,” said Ricci.
“We’re only 2% of total fuel consumption. This builds on the story that business aviation has an opportunity to lead in sustainability space and take the initiative with sustainable fuel.”
According to Alder Fuels, AGC reduces greenhouse gas emissions by more than 80% compared with petroleum jet fuel. There is also the future potential for the SAF to be carbon negative, depending on what feedstocks are used.
By using a blockchain technology tool, 4Air aims to provide clear traceability of the fuel’s carbon footprint, starting with the fields where the biomass was gathered to where it is burned. “I was looking at trying to make this process more transparent,” said Ricci. “That’s where 4Air comes in. SAF may not be 100% better but is 70-80% better. So, we have to document exactly what that is.”
To calculate this percentage, 4Air learns the blend of the biofuel once it is mixed with Jet A and the feedstock used. After observing the conversion process, 4Air then determines the percentage of the fuel’s carbon intensity compared with standard fuel. “It is a simple calculation,” Ricci explains. “But documenting it all, that is the real challenge.
“There is a need for transparency in SAF. There are a lot of questions about the feedstock, where it came from, is it actually sustainable and can you prove your claim and ensure it wasn’t double counted?” said Ricci.
Blockchain technology will answer these questions and provide transparency and credibility to the market, he said. It will also tackle current problems the sector faces with the potential of SAF being “double sold” and multiple entities along the supply chain claiming they have used a certain amount of SAF.
The blockchain technology proves a company’s claim to carbon credits down to the specific batch of SAF. “It gives the traceability and clarity to the ownership model so that you could go in and say, this company is claiming that they use these 10,000 gallons [of SAF]. The blockchain technology will then determine it has an unquestionable claim to those 10,000 gallons or if in fact it has been sold elsewhere.”
The transparency it provides will also help when claiming tax credits from governments. The US government has claimed it will grant tax credits for every gallon of SAF produced that demonstrates a 50% or greater lifecycle greenhouse gas emissions reduction relative to petroleum jet fuel.
This is good news for SAF customers. “Whilst tax credits mostly lie with producers, it will likely lower the cost of production and consumers should see that reflected in the price they pay,” said Ricci.
This in turn will drive down the premium price of SAF. There have been many times in California when the price of SAF has been within $1 of regular jet fuel, he added.
“For all these reasons, blockchain technology will play an important part in the development of sustainable air fuel.” Providing transparency to the production and ownership of the fuel, will, in turn, provide credibility to the SAF market and in turn promote further growth in the industry, with companies such as Alder already scaling up production.
“This is going to be a big part of the SAF scalability story and the business aviation industry for the next 10 to 15 years,” concluded Ricci. “We can’t just flip a switch in 2030. We have to start using these technologies now.”
Meanwhile, read more about the partnership signed between Directional Aviation, Alder Fuels, 4Air and Flexjet here.