Navigating the Future of Aviation Challenges and Innovations in Sustainable Aviation Fuel (SAF) 

Climate change is currently affecting all living things and has become a major concern across various sectors. The aviation industry is one of the contributors to environmental impact, as it accounts for 2% of global greenhouse gas emissions. In response, there has been a shift toward energy-saving policies and the adoption of alternative energy sources, such as Sustainable Aviation Fuel (SAF). SAF is a new renewable energy option that can reduce carbon dioxide emissions by up to 80% compared to traditional aviation fuel. This shift is especially important as the aviation industry aims to reach its Net Zero target by 2065. 

Chemical House & Lab Instrument, a company specializing in providing high-quality laboratory testing equipment and solutions for the industrial sector, places great importance on SAF technology. To support this, the company organized a seminar to exchange knowledge with experts in the fields of energy and the environment. The seminar covered topics such as SAF production, certification requirements, and technologies used in SAF production. 

The seminar, held under the theme “Navigating the Future of Aviation Challenges and Innovations in Sustainable Aviation Fuel (SAF),” took place at the Novotel Bangkok Bangna in July. 

Laying the Foundation for Building an SAF Production Plant 

Mr. Suraporn Petchdee, General Manager of BSGF Company Limited (BSGF), revealed that as a producer of Sustainable Aviation Fuel (SAF), the primary raw material used in production is used cooking oil (UCO). Additionally, SAF can also be made from other types of waste oil. All raw materials are sourced, produced, and distributed under ISCC certification standards. The choice to use waste oil as the main feedstock clearly addresses sustainability concerns. Currently, the public consumes about 3-4 million liters of vegetable oil per day. If roughly 30-40% or around 1 million liters—can be collected, which seems feasible, the company plans to design a SAF production unit with a capacity of 1 million liters per day. At present, about 50-60% of the required oil can be collected. BSGF has partnered with Bangchak Corporation Public Company Limited, BBGI Public Company Limited, and Thanachok Vegetable Oil (2012) Company Limited, its major shareholders, to communicate and promote awareness about the benefits of collecting used cooking oil for SAF production. 

In the future, if it is found that the supply of UCO is insufficient to meet the demand for SAF in Thailand, the government will consider the possibility of allowing crude palm oil to be used as a feedstock. However, it would first need to receive certification from the ISCC, as the ISCC currently prohibits the use of crude palm oil due to potential negative impacts on the entire food supply chain, particularly since palm oil production in Europe is limited. Nonetheless, since Thailand has an abundant supply of palm oil, there is a possibility that the country could receive an exemption to produce SAF from crude palm oil. This would also help promote the domestic agricultural sector. 

Moreover, using SAF can reduce carbon dioxide emissions by up to 80%, while also providing various other benefits. Environmentally, it helps prevent UCO from being discarded into the ecosystem, where it can combine with waste to form fatbergs, clogging drainage systems and increasing the risk of flooding. In terms of health, it reduces the reuse of cooking oil, which in turn lowers health risks for consumers, such as clogged arteries and cancer. Economically, it also creates an additional source of income for the public through the sale of UCO. 

The SAF market is expected to gradually grow as countries implement SAF usage policies. For example, Europe has announced a 2% SAF blending mandate starting in 2025. In Thailand, there is a plan to introduce a policy requiring a 1% SAF blend in 2026. As blending percentages increase according to each country’s roadmap, demand for SAF is expected to grow steadily. However, competition in the market will likely intensify as more producers enter the space. Thailand is well-positioned to compete globally, as domestic SAF production will begin early next year with BSGF’s plant under the Bangchak Group. In the future, global awareness of environmental issues and the push toward Carbon Neutrality and Net Zero will increase, and SAF is the best solution for the aviation sector. Therefore, demand is projected to rise. At the same time, there may be challenges related to feedstock. If the world relies primarily on UCO, supply may become insufficient, prompting the need for further studies to identify alternative feedstocks. 

Currently, Bangchak Corporation Public Company Limited and BSGF Company Limited are constructing a SAF production plant, which is expected to be completed by the first quarter of 2025. Once completed, SAF products will be available to consumers. The target customers will include both domestic and international airlines interested in using SAF. Any surplus after domestic sales will be exported to international markets. BSGF’s SAF production process involves Thanachok Vegetable Oil (2012) Company Limited, which supplies the feedstock for production. Once the production process is completed, the fuel will be transported by Bangkok Fuel Pipeline and Logistics Company Limited – BFPL through its pipeline system, which connects to Don Mueang International Airport (DMK) and Suvarnabhumi International Airports (BKK). 

It is evident that the benefits mentioned align with the BCG (Bio-Circular-Green) Model, which promotes holistic economic development by focusing on three key economies: Bioeconomy, Circular Economy, and Green Economy. This approach will undoubtedly enhance Thailand’s competitiveness on the global stage. 

Developing Environmentally Friendly Fuel Businesses 

Mr. Cheerapan Panyanan, Executive Vice President – Biodiesel Business Operations Group of Energy Absolute Public Company Limited (EA) has announced that, as a producer of SAF, it has begun investing in the construction of an SAF production plant. The plant is expected to be completed around the third quarter of 2024, with commercial operations set to commence in the fourth quarter of the same year. 

In terms of sourcing raw materials for production, we have invested in Hydroprocessed Esters and Fatty Acids (HEFA) technology, which converts vegetable oils and animal fats into hydrocarbons. In the short term, we will primarily rely on used cooking oil (UCO) as the main raw material. We anticipate that the demand for UCO within the country will be sufficient to meet our needs for the next five years. However, if global regulations mandate an increased percentage of SAF in aviation fuel, we will need to depend more on imported raw materials, a reliance that may not be sustainable in the long run. 

To support future business development and raw material sourcing, EA has established a subsidiary named Green Technology Research Co., Ltd. (GTR). This company will focus on researching and developing future business opportunities, including potential raw materials. We see several promising possibilities, such as using waste derivatives from palm oil, including oil from factory wastewater, oil attached to bleaching clay, and animal fats. Additionally, we are in discussions with both the government and international partners about future oil crops. Currently, we are working with the government on promoting jatropha oil, an initiative being pushed through the Federation of Thai Industries. We are also seeking collaboration with the Ministry of Energy, the Ministry of Agriculture and Cooperatives, and the Ministry of Industry to drive and promote sustainability and environmental friendliness within the aviation industry. 

Mr. Cheerapan envisions the long-term prospects of the aviation fuel market, noting that the SAF fuel business is a promising investment that can contribute to the longevity of the planet and its inhabitants. Although current pricing mechanisms are not yet fully clear and the technology is still developing, he anticipates that as technology advances, production costs will decrease significantly within the next 5 to 10 years. This would prevent prices from being passed on to consumers and promote sustainability. He emphasized that achieving sustainability requires collaboration from all sectors. At present, government policies play a crucial role in supporting and driving this initiative forward. Thailand, as an agricultural country, has high raw material potential, with many products derived from key agricultural crops. If the government recognizes the long-term plan and supports the policies, Thailand could significantly outpace its neighboring countries in future competition. 

Challenges and Risks on the Path to Becoming a Green Airline 

Mr. Chaiyong Ratanapaisalsuk, Director of Corporate Strategy & Development Department of Thai Airways International Public Company Limited, stated that currently, airlines flying to European countries, such as France or Sweden, were required to use SAF at a rate of 2%, as per regulations set by each country. Thai Airways is participating in meetings with sub-committees to advocate for the use of SAF, with the Civil Aviation Authority of Thailand (CAAT) and Thai Airways working together to establish a target of 1% SAF blend by 2026 and increasing to 3-5% by 2027. The government is also making efforts to support this initiative, but the agreement is not yet finalized and further discussions are needed.  

From the airline’s perspective, a major risk in the aviation fuel business is cost. Currently, the cost of jet fuel accounts for about 30% of operational expenses. Adding SAF could increase this cost by 4-5 times compared to regular fuel. However, if the SAF blend is at 1%, airlines can still manage the adjustment. The high cost of aviation fuel could potentially impact passengers if fuel prices remain elevated. Typically, airlines charge a fuel surcharge, but in the future, there might be additional costs such as emissions charges and carbon taxes. Airlines are reluctant to pass these costs on to passengers. Therefore, it is crucial for the government to establish clear policies to help compensate for these expenses. 

Another risk is market competition. If regulations are applied only to domestic airlines while international airlines are not subject to the same rules, it creates an unfair competitive environment. This situation puts domestic airlines at a disadvantage, bearing the costs and risks alone. Moreover, if domestic fuel prices are not competitive with international markets, it could hinder the government’s plan to position Thailand as a regional aviation and transportation hub. For instance, if fuel prices in Singapore or Vietnam are lower, international airlines may prefer to refuel and make stopovers there. This could draw passengers and flights away from Thailand, highlighting the need for careful consideration of these factors. 

Mr. Chaiyong added that both Thai Airways and international airlines would need to use aviation fuel or SAF as demand increases. For Thailand to meet this demand, it must ensure a sufficient supply of raw materials and production capacity; otherwise, future issues may arise. Therefore, alternative sources, such as using raw materials from sugarcane or cassava, should be explored. Another concern is the quality of raw materials, which affects emissions. Different raw materials can result in varying emission levels, and a standardized measure is necessary. Thai Airways is committed to achieving Net Zero targets, so we aim to use raw materials that effectively reduce emissions. This aligns with carbon offsetting, as the airline operates under the International Civil Aviation Organization (ICAO). Consequently, SAF produced in Thailand must be certified and comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) established by ICAO. This environmental measure aims to reduce greenhouse gas emissions contributing to climate change. Certification from ICAO would likely increase demand for SAF. 

Certification Standards for CORSIA and ISCC for Sustainable Aviation Fuel 

Mr. Kuppusamy Devandran, Project Manager of Petersons Projects & Solutions said Sustainable Aviation Fuel (SAF) aligns closely with existing biofuel and biomass industries. The evolution of these sectors under the European Union’s Renewable Energy Directive illustrates the power of regulation. Initially overlooked, this directive has transformed biofuels into a lucrative market by establishing a robust compliance framework that incentivizes participation across the supply chain. Currently, SAF benefits from the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which mirrors the EU’s approach. By 2027, CORSIA will mandate compliance from airline operators, creating a fully regulated market and spurring investor confidence. In summary, legal frameworks like CORSIA are essential for market expansion. As they evolve, they will enhance the maturity and appeal of the SAF industry, paralleling the success seen with the EU directives in biofuels.  

Currently, there are several standards related to bioenergy that organizations can choose to apply. Among these, the most widely recognized standard is the International Sustainability and Carbon Certification (ISCC). This system is designed for implementing and certifying carbon and sustainability practices. It provides traceability and ensures that the supply chain does not involve deforestation, protects biodiversity, and helps reduce greenhouse gas emissions. The ISCC is also a well-known certification standard in our market. 

The International Sustainability and Carbon Certification (ISCC) scheme is highly regarded within the industry, with around 50,000 certificates issued globally, including about 4,000 in renewable energies. It provides a comprehensive certification option, covering not only the SAF industry but also polymers and the chemical sectors. This versatility makes ISCC an attractive choice for companies seeking to optimize their operations across various industries, including both energy and non-energy products. The ISCC’s flexibility allows certification even before waste is generated, enhancing sustainability efforts across the supply chain.   

One challenge with CORSIA is the lack of mechanisms like carbon credit trading or a Cap-and-Trade system. These tools could provide significant incentives for stakeholders by allowing them to monetize excess carbon reductions. Although carbon credits generated under the Verified Carbon Standard (VCS) can be sold within CORSIA, the reverse isn’t currently possible. Introducing a system where CORSIA credits could be traded in voluntary carbon markets or a compliance Cap-and-Trade program could significantly boost industry growth. The financial aspect is crucial for sustainability to thrive, highlighting the importance of integrating economic incentives into environmental efforts.  

Future of SAF Market 

Mr. Samuel Wong, Vice President – Asia Pacific of Petroleum Analyzer Company (PAC) said PAC brings 93 years of experience in the petroleum industry to the table. We began our involvement with SAF in 2009, joining the ASTM committee’s jet fuel group at an early stage to collaborate on reviewing and approving new pathways. We’ve been developing and refining technology for SAF testing, such as Thermal Oxidation and Sulfur Nitrogen Distillation, for over a decade. Our significant investments and contributions have supported the industry, and it’s exciting to witness the SAF market finally taking off.  

At a recent seminar today, I identified 12 key issues facing the SAF market, including policy, mandates, pricing, feedstock, and pathways. However, I concluded that the primary challenge is not resources or technology but determination. The industry, governments, and stakeholders need a strong resolve. With determination, the SAF industry can thrive. At PAC, we are committed to moving the world forward safely and sustainably, reflecting our core values of safety and sustainability.  

Back in June 2017, we hosted the first SAF conference here, a modest gathering compared to today’s larger and more committed audience. The industry has progressed significantly from initial discussions to concrete execution. While challenges remain—policy, mandates, and pricing—the 2027 mandate deadline is fast approaching. Thailand, with its strategic location and robust tourism sector, is well-positioned to lead in SAF production and support services, such as aircraft maintenance.  It’s imperative to act now, harnessing this potential before others capture the market, much like the EV shift in China. The opportunity for Thailand is substantial, but time is of the essence.   

Assessing the Quality of Aviation Fuel for Market Competitiveness 

In the pursuit of becoming a regional aviation hub, aligned with the government’s vision to advance the aviation industry, SAF (Sustainable Aviation Fuel) will be mandated in the coming years. For example, airlines flying in Europe are required to use 2% SAF. With global competition in mind, the quality of SAF must meet high standards. Ms. Phanvadee Arkaleephan, Managing Director of Chemical House & Lab Instrument (CH) a provider of analytical and testing instruments for petroleum and petrochemicals for over 45 years, commented that the industry is committed to reducing carbon emissions to achieve Net Zero by 2065, as declared by the Thai government. The transition from traditional jet fuel (Jet A1) to SAF represents a significant step in the oil and aviation industries, helping to reduce carbon dioxide emissions and move towards carbon neutrality in both the fuel and aviation sectors. 

Since SAF and Jet Fuel differ in several aspects, additional testing is necessary to ensure both the fuel’s performance and flight safety. With extensive experience in oil quality analysis, our company has developed expertise in the properties, requirements, and testing standards for various types of fuel. We offer guidance and provide modern, accurate analytical and testing instruments for SAF research and development. This support aims to help Thailand efficiently produce sustainable aviation fuel and includes training services on testing standards and SAF-related technologies. 

Additionally, our company has a network of SAF producers, research centers, quality certification agencies, and airlines both domestically and internationally. We offer advice, share experiences, and foster collaboration among organizations to maximize benefits for the industry and Thailand. 

Thailand is set to transition to a new energy paradigm to achieve Net Zero by 2065 and drive its domestic economy. To succeed, all sectors must collaborate, and the government must implement supportive policies. Thailand has several advantages, such as being an agricultural country, having a large tourism industry, and being well-suited to lead in SAF production, aircraft maintenance services, and other support functions. To maintain this competitive edge, Thailand must plan and act promptly before other countries capture this market share.