Major oil and gas companies have ramped up investments in the biofuels sector, betting on sustainable aviation fuel (SAF), with 43 projects expected to be up and running by 2030, consultancy Rystad said in a report.
The energy research firm indicates that investments by industry giants such as ExxonMobil, Chevron, BP, Shell, TotalEnergies, and Eni could add 286,000 barrels per day (bpd) – more than 12 million actual gallons – of production capacity.
SAF, produced from waste oils, animal fats, and vegetable oils like used cooking oil and soybean oil, emits significantly fewer pollutants and lifecycle greenhouse gas emissions when burned.
The aviation industry accounts for nearly 2% of global energy-related carbon dioxide emissions.
“As the energy transition progresses, these biofuels offer a practical, near-term solution to reduce emissions without requiring significant changes to current infrastructure,” said Lars Klesse, analyst of bioenergy research at Rystad.
BP leads the pack with the largest announced production capacity, reaching a combined 130,000 bpd.
Strategic acquisitions, such as BP’s purchase of Bunge Bioenergia and Chevron’s acquisition of Renewable Energy Group, have strengthened oil majors’ positions in this space.
Despite its higher cost compared to petroleum-based jet fuel, SAF uptake is gaining momentum. Government mandates are driving investments, with the European Union requiring a minimum of 2% of SAF, opens new tab use in aviation by 2025, and the Biden White House aiming to meet all U.S. aviation fuel demand with SAF by 2050, opens new tab.
Originally shared by Reuters, November 20, 2024. Updated for clarity and purpose.