Speaking at the Airlines 2022 conference, Walsh said SAF last week was priced around 1.6 times that of conventional kerosene. “It has been four or five times; we are seeing the economics make a lot more sense.”
“It probably averaged 2.7 times in 2021/22 and every single drop was bought by airlines. There will be a premium for SAF, but it is a premium airlines will pay.”
He criticised oil firms for being late to begin SAF production and for wanting guarantees there would be customers for it. “Shell should have been producing SAF 15 years ago. The idea they need a guarantee… did they get a guarantee when they started drilling oil out of the ground? I don’t think they did. It is a product every airline will have to use.”
Walsh said there was a role for incentives, such as used to promote biodiesel. These would attract new entrants into production, he said. “What they don’t need to do is to force airlines to buy it; airlines will buy it. If you are going to mandate anyone, mandate the producers.”
He said the US, which has announced a $4.3 billion package of support to build a SAF industry, was “moving at a pace”. “They see the solution and are not going to subsidise it for ever; once you scale up production, natural economic rules apply.”
Walsh said other fuels, like hydrogen, would not be in use in aircraft until 2040 or 2050. “At Iata, we see it as being a small contribution,” he said. “Here, we are very much focused on SAF because it is credible, it exists.”
Walsh added the adoption of more efficient air corridors under a Single European Sky would immediately reduce CO2 emissions by 10-12%, but claimed air traffic controllers were opposed because of job losses.
