Shell Aviation Says $1.45 Trillion Investment Needed to Expand SAF Production

Shell Aviation, the aviation fuel subsidiary of British oil giant Shell, says that $1.45 trillion of investment will be needed to scale SAF production to sufficient size by 2050.

Jan Toschka, President, Shell Aviation said global aviation fuel demand will fully recover to pre-pandemic levels of 300 million tonnes per year in the next one or two years, and that $1.45 trillion of investment will be needed to replace the current scale of jet fuel while taking into account the industry’s projected 2%-3% annual growth.

The development of sustainable aviation fuel (SAF) is necessary as it will account for a large part of the decarbonization of air transport, but its proportion in all jet fuel production is still far below 1%.

The industry will have to spend $50 billion annually and build 5,000 SAF plants to achieve the net zero goal by 2050.

Toschka said demand in the US has reached the 2019 levels, while Europe has recovered to over 80%, but it will still take some time for Asia to recover due to the impact of COVID-19.

Aviation fuel supplies in Europe are tight against the backdrop of Western sanctions on Russian oil products, while the imports of aviation fuel from the US, China, India and the Middle East are increasing.

Toschka pointed out that some aviation fuel needs to be purchased from refineries further away, so all means of transportation, including maritime and rail transport, are under greater pressure.

Shell may also make a final investment decision for its Singapore SAF plant by 2022 or early 2023, which is expected to come on stream in 2026 with up to half a million tons of SAF produced in the city state, he said.