Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’

Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’
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Updated 13 November 2022

Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’

Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’
  • Sustainability Policy region lead Robert Boyd tells “Frankly Speaking” the industry is committed to decarbonization over next 30 years
  • He calls for investment in sustainable fuel, replacement of old fleets, and operational and traffic-management improvements

DUBAI: The aviation industry is committed to decarbonizing, but with air travel set to triple by 2050, alternative energies such as electric and hydrogen will not solve the challenge; airlines must replace old fleets, airports should improve air traffic management structures and industry must invest in sustainable aviation fuel.

However, there is a “huge amount of work” needed to drive down SAF prices, including more research and development, and technological development on feedstock. Also, SAF must be available to developing countries to make an impact beyond the largest aviation hubs. This is according to Robert Boyd, an expert in SAF and the regional lead of aircraft manufacturer Boeing’s global sustainability policy and partnerships.

Appearing on “Frankly Speaking,” the Arab News weekly current-affairs talkshow that dives deep into regional headlines and speaks with leading policy makers and business leaders, he said: “The good news is that there are several pillars of action that the aviation industry has at its disposal, and these are working to essentially execute the decarbonization challenge over the next 28 years.”

Boeing executive Robert Boyd being interviewed by Katie Jensen on Frankly Speaking.

But given that “technology limitations do not allow for hydrogen or electric to power wide-body, long-haul aircraft, SAF is the key.”

With climate change taking center stage at the UN Climate Change Conference in Egypt, many people are wondering whether the aviation industry — currently responsible for 2.5 percent of global emissions — can really go green, or if real progress is still decades away.

“In a decarbonizing world, if all sectors are not doing it at the same pace, then the relative scale of emissions for aviation or shipping makes it hard to decarbonize,” he said. “So, it is absolutely critical to decarbonize. There is a clear plan to achieve net zero by 2050. And that can be done through various pillars.

“The obvious one is new aircraft. A new aircraft can be anywhere from 20 to 25 percent more fuel efficient than its predecessor.”

Boyd called them “significant numbers,” pointing out that something like 25 tons of carbon dioxide can be saved per day saved by using the best-in-class modern fleet. “That can be a couple of hundred thousand tons of CO2 over its lifetime. So, we need to ensure that we are using the most efficient modern fleet, which might get 15 to 25 percent CO2 dividend globally. It is not small.”

An Airbus A350-900 is refueled with sustainable aviation fuel produced by French energy group Total at France's Roissy airport on May 18, 2021. (AFP file)

He cited operational efficiencies as another opportunity for improvement. “Aviation has been on this for several years or even decades. A lot of the easy operational improvements are already there. They’re embedded in the technology that we use today,” he said.

Improvements in air traffic management offer yet another opportunity, but these solutions have limitations, according to Boyd, will not fix the aviation emissions problem. “The major one is replacing the energy source with something sustainable. That’s where we put significant emphasis on sustainable aviation fuel as it is doing to do the heavy lifting on decarbonization till 2050.”

What about ideas of electric or hydrogen as a potential replacement for kerosene? “These are really exciting, and there has to be continued work on this, but they won’t, by themselves, solve the decarbonization challenge,” Boyd told “Frankly Speaking” host Katie Jensen.

“Today about three quarters of all of the international emissions are from wide-body long-haul travel, and technological limitations don’t allow for hydrogen or electric in that space just yet. Maybe it may be in due course, but today it’s not a viable solution. So, SAF is the key over the next 30 years.”

The problem with SAF is of course the price: More than double the price of regular jet fuel, plus it is in short supply. Figures from 2019 show that SAF accounted for just 0.1 percent of global fuel use for jets, while the 2025 target was to have 2 percent of global jet fuel come from SAF.

Surging jet fuel prices have hampered airline efforts to rebound from two years of the COVID-19 pandemic. The cost of sustainable aviation fuel is currently double that of regular jet fuel.  (AFP)

Under the circumstances, should governments step in and subsidize, or will travelers be forced to pay with higher airfares?

“We do talk in a very positive way about sustainable aviation fuel and the potential. But that realism around where we are at today is really important because it shows what degree of challenge lies ahead,” said Boyd. “What is going to be needed is exponential growth. We are on track for around somewhere between 4 and 6 billion liters of SAF by 2025. But it still leaves a huge mountain to climb in terms of scaling up.”

Having said that, Boyd acknowledged there are big barriers to scaling up faster. “Definitely cost. If SAF was at cost-cost parity today and it was available, every airline would use it. We need to benefit from the efficiencies of getting scaled. That is really just starting. There is a huge amount of work, sort of research and development and technology, pure technology work on feedstock, which can bring some of these prices down,” he said.

He cited the US as a good example where the Inflation Reduction Act of 2022 “provides a huge incentive to develop green hydrogen and renewable fuels for (uses in) both ground and in air especially. There is a wave of supply coming along. And with that, I expect we will see price improvements.”

A Hop (Air-France low cost company) plane is refueled at Roissy-Charles de Gaulle Airport, north of Paris, on August 6, 2018. (AFP file) 

Boyd said he is optimistic about SAF supplies too. “There is expansion of existing facilities and new facilities are being developed. Some of these are starting to come online now, 2022,” he said. “There will be more in 2023 going right through to 2025 and beyond. We have visibility, with some respectable granularity, out to about 2027.”

There is talk about hydrogen-powered planes, but hydrogen requires a large volume to store it which would require a complete redesign of a plane. What does Boyd think of the potential of the zero-emission fuel?

“Certainly, there is a lot of work going on with hydrogen. There is still a lot of learning to do there. It is accurate to say we can do it,” he said. “But what if you have a drastically different-looking plane? Moreover, trying to totally redesign airports could change the whole efficiency of aviation in terms of restrictions for how you refuel a hydrogen plane. There are trillions of dollars of fuel infrastructure already, either in the ground or pipelines going to airports.”

He described these as “really complex questions” that need answers before you can have a sort of a sensible discussion on whether hydrogen is actually realistic as a solution for aviation in a 2050-2100 timeframe. This is “certainly not to say that there should not be continued work going on there, but it really will not be the silver bullet.”

Does Boyd think the carbon reductions that are being talked about COP27 and other big events will change the future of airports such as Saudi Arabia’s NEOM Airport? “If you are building a brand new airport, (you have to) think 10 or 15 years into the future. What is likely to be feasible, plausible or actually implemented, things like, should you have hydrogen supply built into the airport? It is much easier to do this when you are building the airport than to do a patched-up effort.”

Boyd does not rule out the idea of retrofitting carriers, something in which Ryanair has invested about $200 million. He cited the example of the eco demonstrator, a program by which Boeing buys back an existing aircraft from an operator. “We set it up as an experimental lab, putting all sorts of technology on board to test anything and everything. There have been about 300 different technologies tested on the eco-demonstrator over the past decade. Many of these you now see being introduced into planes today.”

He also talked about how Boeing is trying to make planes lighter and more fuel efficient, and whether these will change travelers’ experience. “People may not appreciate the amount of carbon fiber that in a Boeing in a Dreamliner or a 787. But that is tremendous in terms of weight,” he said. “It is incredibly strong and incredibly light, allows the appropriate amount of flex, which can give better aerodynamic properties from the wings.”

As of now, most of the aviation emissions are coming from developed nations, but the future of growth is expected be in developing countries. Will they have the deep pockets of nations like the US and Europe to fund emission reductions? “This comes to the crux of why decarbonization is critical,” Boyd said. “You need to decouple carbon dioxide from aviation itself.

“If we just focus on a couple of (advanced industrial) countries and think the job is done, then it is not at all. The same momentum needs to translate to China, India, parts of Asia, all of Asia. There are some fast-growing areas like Indonesia, Bangladesh, South America and Africa. (It is important) to make sure no country is left behind.”


Asia set to use half of world’s electricity by 2025: IEA report

Asia set to use half of world’s electricity by 2025: IEA report
Updated 08 February 2023

Asia set to use half of world’s electricity by 2025: IEA report

Asia set to use half of world’s electricity by 2025: IEA report

BERLIN: Asia will for the first time use half of the world’s electricity by 2025, even as Africa continues to consume far less than its share of the global population, according to a new forecast released on Wednesday by the International Energy Agency.
Much of Asia’s electricity use will be in China, a nation of 1.4 billion people whose share of global consumption will rise from a quarter in 2015 to a third by the middle of this decade, the Paris-based body said.
“China will be consuming more electricity than the European Union, United States and India combined,” said Keisuke Sadamori, the IEA’s director of energy markets and security.
By contrast, Africa — home to almost a fifth of world’s nearly 8 billion inhabitants — will account for just 3 percent of global electricity consumption in 2025.
“This and the rapidly growing population mean there is still a massive need for increased electrification in Africa,” said Sadamori.
The IEA’s annual report predicts that nuclear power and renewables such as wind and solar will account for much of the growth in global electricity supply over the coming three years. This will prevent a significant rise in greenhouse gas emissions from the power sector, it said.
Scientists say sharp cuts in all sources of emissions are needed as soon as possible to keep average global temperatures from rising 1.5 degrees Celsius above pre-industrial levels. That target, laid down in the 2015 Paris climate accord, appears increasingly doubtful as temperatures have already increased by more than 1.1 degrees Celsius since the reference period.
One hope for meeting the goal is a wholesale shift away from fossil fuels such as coal, gas and oil toward low-carbon sources of energy. But while some regions are reducing their use of coal and gas for electricity production, in others consumption is increasing, the IEA said.
The 134-page also report warned that electricity demand and supply are becoming increasingly weather dependent, a problem it urged policymakers to address.
“In addition to drought in Europe, there were heat waves in India (last year),” said Sadamori. “Similarly, central and eastern China were hit by heat waves and drought. The US also saw severe winter storms in December, and all those events put massive strain on the power systems of these regions.”
“As the clean energy transition gathers pace, the impact of weather events on electricity demand will intensify due to the increased electrification of heating, while the share of weather-dependent renewables will continue to grow in the generation mix,” the IEA said. “In such a world, increasing the flexibility of power systems while ensuring security of supply and resilience of networks will be crucial."

Kenya’s integrated tax system helped raise number of active taxpayers by 5.8m, says revenue authority executive

Kenya’s integrated tax system helped raise number of active taxpayers by 5.8m, says revenue authority executive
Updated 08 February 2023

Kenya’s integrated tax system helped raise number of active taxpayers by 5.8m, says revenue authority executive

Kenya’s integrated tax system helped raise number of active taxpayers by 5.8m, says revenue authority executive

RIYADH: Kenya’s integrated tax system, also referred to as the “itax”, has helped raise the number of active taxpayers in the country by 5.8 million to hit 7.4 million in 2022, according to Mohamed Omar, the commissioner for strategy, innovation and risk management at the Kenya Revenue Authority.

 Speaking during a panel discussion on the first day of the Zakat, Customs, and Tax conference in Riyadh, Omar highlighted the significant impact of digitizing the tax system.

“The itax had an impact and we saw shifts in numbers. So, around 2014 there were 1.6 million active taxpayers, these were people who do regular returns and regular payments, the number in 2022 was 7.4 million, so that’s about more than four times,” he revealed.

He went on to explain that, as a result of digitizing the tax system, the growth in revenue was more than the nominal growth in the gross domestic product.

In addition to this, the filing system has also seen significant improvement.

“By 2017, 100 percent filing and payment was being done online; that was not happening before,” he stressed.

George Betselis, governor of the Independent Authority of Public Revenues in Greece, also spoke about the digitization of the tax system with a special focus on the COVID-19 pandemic era.

“During the pandemic, we needed to find digital solutions for at least being able to receive front end and provide front-end digital services. Our tax offices were closed, so we had to accommodate requests,” he said.

 The Zakat, Tax, and Customs conference aims to tackle global experiences in the fields and discuss the future of digitizing those sectors as well as propelling trade and protecting national security.

SNB Capital announces completion of $267m AT-1 sukuk

SNB Capital announces completion of $267m AT-1 sukuk
Updated 08 February 2023

SNB Capital announces completion of $267m AT-1 sukuk

SNB Capital announces completion of $267m AT-1 sukuk

RIYADH: SNB Capital on Wednesday announced the completion of a private placement Additional Tier 1 perpetual sukuk worth SR1 billion ($267 million).

According to an official statement, the transaction was received with overwhelming demand from a diverse investor base having a bid cover ratio of 2.1 times. Investors included financial institutions, public sector, qualified individual investors, corporates, family offices, asset managers and insurance companies.

Commenting on the development, Ammar Alkhudairy, the chairman of SNBC, said: “This issuance by SNBC is a pioneering endeavor that compliments and supports SNB’s group vision of being the premier financial services group in the region that provides seamless banking and capital markets support to the Kingdom’s ambitious growth plans”

The issuance, which is non-call for five years, was priced a fixed annual coupon rate of 5.8 percent with quarterly payment until the first call date. 

Rashid Sharif, CEO of SNBC, said: “The issuance further strengthens our capital base to continue our journey supporting the development of the Saudi Capital Market guided by Vision 2030 strategic goals and objectives.”

Closing Bell: TASI arrests downward slide; closes up 38 points to 10,508 

Closing Bell: TASI arrests downward slide; closes up 38 points to 10,508 
Updated 08 February 2023

Closing Bell: TASI arrests downward slide; closes up 38 points to 10,508 

Closing Bell: TASI arrests downward slide; closes up 38 points to 10,508 

RIYADH: Saudi Arabia’s Tadawul All Share Index gained 38.22 points — or 0.37 percent — on Wednesday to close at 10,507.72. 

While MSCI Tadawul 30 Index edged up 0.21 percent to 1,439.54, the parallel market Nomu closed 0.76 percent higher to 19,212.09. 

TASI’s total trading turnover of the benchmark index was SR3.41 billion ($910 million), with 99 stocks of the listed 224 advancing and 100 receding. 

Saudi Public Transport Co. was the topmost gainer, soaring 6.56 percent to SR17.54.  

Bupa Arabia for Cooperative Insurance Co. was the second-highest grosser, rising 3.82 percent to SR157.80. The company on Tuesday received Saudi Central Bank’s approval to renew its insurance activities license. The license is valid for three years, starting from March 26, 2023, the insurer informed Tadawul. 

The other top gainers were Alkhaleej Training and Education Co., Savola Group and Sahara International Petrochemical Co. All three stocks advanced within the 3-4 percent range. 

The worst-performing stock of the day was Banque Saudi Fransi, which dropped 4.63 percent to SR37.05. 

Other poor performers were Saudi British Bank, Al Alamiya for Cooperative Insurance Co., Riyad Bank and Amana Cooperative Insurance Co. 

Among sectoral indices, 13 of the 21 listed on the stock exchange declined; one remained flat while the rest advanced. 

On the announcements front, Elm Co.’s wholly owned subsidiary, Saudi Company for Electronic Information Exchange, inked a revenue-sharing agreement with Zakat, Tax and Customs Authority. 

The agreement’s value exceeds 5 percent of total revenue as per audited financial statements for 2021. The contract has no fixed value. Instead, it depends on the number of executed transactions, and the company receives a percentage of the fees of such transactions. 

The five-year agreement will provide customs electronic and operational services, starting from the issuance of the effective date certificate. Its share price fell 0.37 percent to SR375.60. 

Al Moammar Information Systems Co. and Mobile Telecommunication Co. Saudi Arabia, also known as Zain KSA, signed, on Feb. 7 a non-binding memorandum of understanding. 

The 12-month MoU will be renewed based on the two parties’ agreement, MIS said in a statement on Tadawul. 

As per the MoU, MIS and Zain KSA will explore potential opportunities for cooperation through the design, launch, and offering of certain products and services.  

MIS also signed another MoU with the Ministry of National Guard to support the digital transformation journey of the ministry by developing a data center strategy, information security, artificial intelligence and other emerging technologies in the enterprise space. MIS’s share price rose 1.94 percent to SR94.50. 

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 
Updated 08 February 2023

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

RIYADH: The complete merger of the General Authority of Zakat and Tax with the General Authority of Customs will be completed by the end of the first quarter of 2023, revealed ZATCA Gov. Suhail Mohammed Abanmi.  

While speaking at a panel discussion at the Zakat, Tax and Customs Conference in Riyadh on Wednesday, Abanmi said that ZATCA faced so many challenges to integrate these bodies, but it is successfully completing the process as the authority carried out several studies to understand the possible hurdles that may come up in the journey.  

The integration between Zakat, Tax and Customs bodies was happening in phases, and the merging process is now in its final stages.  

It was in 2021 that the Saudi cabinet approved the decision to merge the General Authority of Zakat and Tax with the General Authority of Customs, to form an umbrella authority named Zakat, Tax and Customs Authority, in line with the Kingdom’s efforts to restructure government agencies to speed the implementation of the goals outlined in Vision 2030.  

“The decision to integrate tax and customs bodies was taken in 2021, and it will be completed by the first quarter of this year,” said Abanmi.  

He added: “The integration of tax and customs bodies is a huge remarkable achievement. We faced so many challenges. But we successfully overcome those hurdles by conducting a study. The study was well detailed, and we found solutions for these challenges.”  

During the panel discussion, Abanmi also outlined the benefits of integration and noted that these efforts will mutually benefit both the customers and the government.  

“As customers use the same channel after the integration of tax and customs, it will increase the efficiency of the operations and enhance the satisfaction levels of the users. By integrating the two bodies; tax and customs, we reduced the cost of operational expenses and capital costs, and this will help the government,” he said.  

Abanmi further noted that integrating zakat, tax and customs bodies will also enhance cybersecurity, and added that it will also help reduce risks and tax evasion.  

Talking about the feasibility study conducted before taking the merging decision, Abanmi noted: “The decision to integrate tax and customs bodies under a single umbrella was decided after a study. This study looked into several international studies and analyzed previous experiences of integration that happened in UK, Estonia, Portuguese, and South Africa.”