Asia seen as bright spot in green jet fuel market
Global consumption expected to exceed 12 million tonnes annually by 2030
Global consumption of sustainable aviation fuel made from nonfossil materials could exceed 12 million tonnes annually by 2030, and the Asia-Pacific is a market with huge potential, according to Neste, the world’s largest producer of green jet fuel.
Governments could help encourage its use by outlining clear targets for the percentage of sustainable aviation fuel that should be blended with fossilbased jet fuel, said Sami Jauhiainen, vice-president of AsiaPacific renewable aviation at the Finnish oil refining group.
“In the Asia-Pacific, some countries have already published clear targets, like Japan with a 10 per cent blending goal by 2030,” he said. “In China, it is more difficult [to project] because there is no clear target.”
Given that jet-fuel consumption on the mainland and in Hong Kong was just over 40 million tonnes a year before the onset of the Covid-19 pandemic in 2020, there was a potential market of several million tonnes of sustainable aviation fuel annually if similar targets were established, he said.
“We see a lot of potential to grow,” Jauhiainen said. “Hong Kong is the world’s largest cargo hub, while China is the world’s second-largest aviation market after the United States with a strong growth outlook.”
The Civil Aviation Administration of China, under a green development policy and action plan published last December, aims for cumulative consumption of green jet fuel to reach 50,000 tonnes by 2025. It did not provide annual targets.
Neste had been in discussions with airlines and fuel distribution firms to supply to a growing number of airports in the Asia-Pacific, Jauhiainen said, adding sales in the region had begun in 2020, covering Japan, New Zealand, Malaysia, Australia and Hong Kong on a pilot basis.
Hong Kong carrier Cathay Pacific Airways had bought Neste’s product last year through Shell, he added.
Globally, aviation consumed around 300 million tonnes of jet fuel in 2019, which is worth US$218 billion at the current market price, according to S&P Global Platts. Sustainable aviation fuel amounted to just 0.1 per cent of the total that year.
Aviation accounts for just over 2 per cent of global energy-related carbon emissions, according to the International Energy Agency.
“The key challenge is the cost of sustainable aviation fuel, which is three to five times more expensive. Hence it is difficult for airlines to justify its use if their competitors are not required to do the same,” Jauhiainen said.