Low carbon technologies company Topsoe will supply key technology to one of Southern Europe’s largest renewable fuels plants owned and operated by Cepsa and Bio-Oils.
Having signed a deal with energy firm Cepsa, Topsoe will provide its HydroFlex technology, which will enable the production of 500,000 tonnes of per year of sustainable aviation fuels (SAF) and renewable diesel from renewable feedstocks such as agricultural waste, fats, oils and greases.
Located in Spain, the plant began construction in February this year and will double the partners’ total renewable fuels production capacity to one million tonnes per year, creating one of the largest renewable fuel complexes in Southern Europe.
The project will also help to bridge the gap between supply and demand for SAF, which Elena Scaltritt, CCO at Topsoe, addressed, saying, “The demand for SAF and renewable diesel is there, but supply is still lagging behind.”
“Renewable fuels will be absolutely critical to support the energy transition – in particular in sectors such as long-distance transportation that are difficult to electrify.”
In 2024, S&P Global estimates global SAF supply will reach 2.13m tonnes, of which 2.03m tonnes will be HEFA-produced SAF. However, global SAF demand consistently lags supply, estimated at 1.24m tonnes in 2023 and rising to 2.16m tonnes in 2024.
As cited by the International Energy Agency (IEA)’s Net Zero Scenario, over 10% of fuel consumption in aviation needs to be SAF by 2030 to stay on course for Net Zero carbon dioxide (CO2) emissions by 2050.
In 2022, the International Air Transport Association (IATA) estimated global SAF production to make up only around 0.1% to 0.15% of total jet fuel demand.
According to Jose Manuel Martinez, Director of Technology, Projects and Services at Cepsa, the new facility will emit 75% less CO2 than a traditional biofuel plant and is designed to achieve Net Zero emissions in the medium term.
“This new 2G plant is central to our Positive Motion strategy and will set the European benchmark in the field of green molecules, directly supporting the rapid decarbonisation of sectors that cannot run on electrons, like aviation.”
SAF incentives
Several initiatives and incentives have been created to meet the supply and demand challenge for SAF.
A number of European countries are mandating airlines to use a certain percentage of the clean fuel by 2030 and the US Inflation Reduction Act (IRA) has incentivised airlines with an increased tax credit.
Within the private sector, international aviation organisations and global corporations have formed alliances, such as the Eco-Skies Alliance, to invest in biofuel production, carbon capture and sequestration and the purchase of SAF.
Another potential barrier to airline adoption of SAF is the high cost. To combat this, the IRA – which extends the $1 per gallon biodiesel and renewable diesel blenders tax credit – includes a new $1.25 to $1.75 credit for years 2023-2024.
The scheme also allocates $297m for new grants to advance SAF and low-emissions aviation technologies to reduce emissions from aviation.
