American Airlines’ path to decarbonizing air travel

Originally published in American Airlines’ 2023 Sustainability Report

NORTHAMPTON, MA / ACCESSWIRE / August 13, 2024 / American Airlines

Sustainable aviation fuel

The clearest path to decarbonising aviation in the short term, based on current technological developments, is to switch to sustainable aviation fuel (SAF). SAF available on the market today can reduce lifecycle greenhouse gas emissions by up to 85% compared to conventional petroleum-based aviation fuel, and new technologies and processes promise SAF with lifecycle emissions reductions of almost 100%. The reality, however, is that while SAF is critical to achieving our own and the industry’s climate goals, it is not yet available at the scale or price required to be a viable alternative for widespread commercial use – and achieving this will require a joint effort from the private and public sectors.

How American is helping to accelerate solutions

Purchasing and scaling SAF production is a core part of American’s climate strategy this decade. For example, we expect SAF to be key to achieving the insect reductions needed to meet our science-based 2035 goal, and we have set a goal to replace 10% of our jet fuel with SAF by 2030. In 2023, we used nearly 2.7 million gallons of SAF on our flights, an increase of about 4% from 2022, but still a small portion of the SAF we need to meet our goal.

American is entering into purchase commitments with SAF producers to ensure the supply we need to meet our goal. As an anchor member of Breakthrough Energy Catalyst, which invests in new decarbonization technologies, we are also working to advance the SAF market. (For more information on our innovative agreement with Infinium, see page 19.) In addition, we remain committed to ensuring that governments use policy tools—including incentives, loans and research investments—to grow the SAF market.

The need for concerted action to scale the SAF market

SAF availability will increase in 2023, but to meet the industry goal of producing 3 billion gallons of low-cost SAF in 2030, the market must achieve a compound annual growth rate of nearly 100%, according to data from the Environmental Protection Agency (EPA).¹ There is a clear need to significantly accelerate the development of the SAF market. This will require concerted efforts from a number of stakeholders. Airlines have a key role to play, but engine and aircraft manufacturers also need to enable higher SAF blends and the research community needs to drive innovation in new SAF pathways. The energy sector needs to adjust its capital commitments, while the financial sector needs to find more effective ways to support the SAF market. Standard setters need to identify new solutions and policy makers need to take smart actions that drive further investment in the industry.

Further development of next-generation SAF pathways

Realising the decarbonisation potential of SAF is a difficult path that involves replacing the feedstocks available today over time with more efficient ones that enable greater reductions in emissions over the entire life cycle.

Some progress has been made over the past year, including the creation of principles for the use of books and claims in sustainable aviation fuel accounting for U.S. airlines, which provide a robust market mechanism for efficiently connecting SAF buyers and producers. The passage of a tax credit for SAF purchases in Illinois and the release of guidance from the U.S. Treasury Department on implementing the SAF Blender Tax Credit (BTC) – passed in the Inflation Reduction Act of 2022 – are further evidence that U.S. policy is moving in the right direction, despite the SAF BTC expiring at the end of 2024. Lobbying by initiatives such as the Low Carbon Fuels Coalition, the Center for Climate and Energy Solutions (C2ES) SAF Working Group, and the SAF Coalition – all initiatives in which American participates – has been and will continue to be critical to policy progress.

Hydroprocessed esters and fatty acids

Hydroprocessed Esters and Fatty Acids (HEFA) is the only SAF process used to produce jet fuel on a large scale today. However, the supply of HEFA feedstocks – particularly used cooking oil and animal fats – is limited and there are concerns that demand for these feedstocks could have other indirect environmental impacts.

Alcohol-to-Jet

Alcohol-to-Jet (ATJ) technology uses ethanol as a feedstock to produce SAF, but is not yet available at scale for commercial use by airlines. New feedstocks, agricultural practices and production processes offer the potential to significantly reduce ATJ’s greenhouse gas emissions compared to those that exist today, but could potentially increase costs.

Fischer-Tropsch

Fischer-Tropsch gasification (FT) has the potential to produce SAF that virtually eliminates greenhouse gas emissions while using waste products such as municipal waste as feedstock. FT can also use CO2 extracted from industrial exhaust gases – and one day removed from the atmosphere – but this process is still very expensive. While FT is a proven technology in other applications, it has been difficult to successfully commercialize for aviation.

American SAF Procurement Principles

When deciding which SAF products to source for our operations, we apply the following sustainability standards:
Reduction of greenhouse gas emissions over the entire life cycle by at least 50%, including estimated indirect land use changes, compared to conventional jet fuel
Analyze the environmental and social impacts of SAF feedstocks, such as potential impacts on food supply and land use
Achieving sustainability certification or completing our own due diligence if certification is not practical²

Our use and advocacy of SAF is also guided by the following principles:

Strictly adhere to jet fuel safety and performance standards
Engage and collaborate with stakeholders in the private and public sectors to remove barriers to the production and distribution of SAF.
Carry out robust and transparent emissions accounting and work within our industry to further develop and harmonize SAF emissions accounting

Raising the bar for SAF

Infinium is a US-based provider of electrofuels – also known as eFuels. The company produces a sustainable aviation fuel, eSAF, by converting CO2 waste, water and renewable energy into clean-burning aviation fuel.

Infinium eSAF has the potential to reduce lifecycle greenhouse gas emissions by approximately 90%, which is more than the emission reduction achieved with SAF currently on the market.

The company plans to convert an existing brownfield gas-to-liquids project in West Texas into a first-of-its-kind, large-scale power-to-liquids (PtL) eFuels facility to produce eSAF. In 2023, Breakthrough Energy Catalyst announced its commitment to invest $75 million in Infinium’s PtL project. To further support this investment and accelerate eFuels production, American and Infinium have entered into a firm offtake agreement under which Infinium will supply the airline with eSAF.

This innovative technology is further supported by a second agreement between leading bank Citi and American. American transfers the associated emissions reduction from the Infinium eSAF directly to Citi. This enables Citi to reduce some of its Scope 3 emissions caused by employee travel. Citi is also a partner of Breakthrough Energy Catalyst.

These new agreements are critical to further investment in Infinium’s facility.

1 https://afdc.energy.gov/fuels/sustainable-aviation-fuel

2 As part of our due diligence, we refer to the Food and Agriculture Organization of the United Nations Guidelines for Responsible Agricultural Supply Chains and other key references to mitigate and manage the sustainability risk of SAF produced using bio-based raw materials.

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