Case study: Sustainable aviation & shipping — a leading organization's implementation and lessons learned

Aviation and maritime shipping together account for approximately 5% of global CO2 emissions—yet these sectors received <3% of total climate technology investment in 2024, according to BloombergNEF's Energy Transition Investment Trends report. In North America, where freight tonnage moved by sea exceeded 1.4 billion metric tons and commercial aviation consumed 18.6 billion gallons of jet fuel in 2024, the decarbonization challenge is immense but increasingly actionable. Sustainable aviation fuel (SAF) production capacity in the United States tripled between 2023 and 2025, reaching 1.5 billion gallons annually, while the International Maritime Organization's Carbon Intensity Indicator regulations forced 23% of the global fleet into compliance remediation. This case study examines what leading organizations have learned implementing sustainable aviation and shipping solutions—including the unit economics that make projects viable, the adoption blockers that derail them, and what decision-makers should prioritize in the next 24 months.

Why It Matters

The urgency of decarbonizing aviation and shipping stems from their structural resistance to electrification. Unlike ground transportation, where battery-electric vehicles have achieved cost parity in many segments, aircraft and ocean-going vessels require energy densities that current battery technology cannot provide. A fully electric transatlantic flight remains physically impossible with projected battery technology through 2040; a container ship running on batteries would dedicate 70% of its cargo capacity to energy storage. These sectors must pursue alternative pathways—sustainable fuels, operational optimization, vessel design improvements, and eventually hydrogen or ammonia propulsion—that introduce complexity, cost premiums, and coordination challenges absent from simpler electrification transitions.

The regulatory pressure is intensifying. The International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) entered its mandatory phase in 2024, requiring airlines to offset emissions growth above 2019 baselines. The European Union's ReFuelEU Aviation regulation mandates 2% SAF blending by 2025, rising to 6% by 2030 and 70% by 2050. In maritime, the IMO's 2023 revised strategy targets net-zero emissions by approximately 2050, with intermediate checkpoints requiring 20% emissions reduction by 2030 compared to 2008 levels. For North American shippers and airlines, these regulations translate into concrete procurement obligations and capital allocation decisions within current planning cycles.

The economic stakes are substantial. The U.S. Department of Energy estimates that SAF production at scale could generate $35 billion in annual revenue and 180,000 jobs by 2035. Maersk, the world's second-largest container shipping company, has committed $1.4 billion to methanol-fueled vessels for North American trade lanes. Delta Air Lines announced $1 billion in SAF purchase commitments through 2030. These investments reflect both regulatory compliance requirements and emerging competitive dynamics—shippers and airlines with credible decarbonization pathways increasingly win business from sustainability-conscious corporate customers.

Key Concepts

Sustainable Aviation Fuel (SAF) refers to jet fuel produced from non-petroleum feedstocks—including used cooking oil, agricultural residues, municipal solid waste, and synthesized from captured carbon dioxide and green hydrogen. SAF is chemically similar to conventional jet fuel, enabling drop-in use in existing aircraft and infrastructure without modification. Current SAF pathways achieve 50-80% lifecycle emissions reductions compared to fossil jet fuel, though feedstock sourcing and processing efficiency vary significantly. The critical economic challenge is the "green premium": SAF costs 2-4x more than conventional jet fuel in 2025, though the gap is narrowing as production scales.

Maritime Decarbonization Pathways encompass multiple parallel strategies given the diversity of vessel types and trade routes. For existing vessels, slow steaming (reducing speed 10-15% to cut fuel consumption 20-30%), hull coatings, propeller optimization, and wind-assist technologies offer near-term emissions reductions without major capital investment. For new builds, dual-fuel engines capable of burning methanol, ammonia, or LNG represent the primary pathway, though green methanol and ammonia production remain supply-constrained. The IMO's Carbon Intensity Indicator (CII) rating system, mandatory since 2023, grades vessels A through E based on emissions per cargo-ton-mile, with operational restrictions applying to poorly rated vessels.

Life Cycle Assessment (LCA) provides the analytical framework for comparing decarbonization options across aviation and shipping. Credible LCA accounts for emissions across feedstock production, processing, transportation, and combustion—not merely tailpipe emissions. This matters enormously: some biofuel pathways that appear carbon-neutral at the combustion stage generate substantial upstream emissions from land-use change or fertilizer-intensive feedstock production. The California Air Resources Board's GREET model and the European Commission's RED III methodology represent the primary LCA standards applied in North American markets.

Book and Claim Accounting enables SAF emissions reductions to be credited to purchasers who do not physically receive the fuel. Because SAF fungibly blends with conventional jet fuel in pipeline and airport systems, tracking physical molecules to specific flights is impractical. Book and claim systems issue certificates representing SAF environmental attributes separately from physical delivery, allowing corporations to purchase SAF credits for their air travel emissions regardless of which airports their flights use. This mechanism dramatically expands the addressable market for SAF producers but requires robust chain-of-custody verification to prevent double-counting.

Emissions Reduction Targets and Carbon Intensity metrics structure corporate and regulatory goal-setting in these sectors. Airlines typically set targets in emissions per revenue passenger kilometer (RPK) or per available seat kilometer (ASK); shipping companies use grams of CO2 per ton-nautical-mile. These intensity metrics allow for growth while demonstrating efficiency improvements, though they have attracted criticism for enabling absolute emissions increases. The Science Based Targets initiative (SBTi) provides validated methodologies for setting aviation and maritime targets aligned with Paris Agreement goals.

What's Working and What Isn't

What's Working

SAF Offtake Agreements with Creditworthy Buyers: The SAF production bottleneck has less to do with technology than with financing. Producers need bankable long-term purchase commitments to secure project financing for capital-intensive biorefineries. When major corporations commit to multi-year SAF purchases at agreed premiums, projects advance. Microsoft's 2024 agreement with World Energy for 40 million gallons of SAF over five years exemplifies this model—the tech company's AA credit rating and public sustainability commitments made the deal financeable. United Airlines' Sustainable Flight Fund, backed by commitments from 30+ corporate partners, has catalyzed over $200 million in SAF production investment through guaranteed demand.

Operational Optimization in Shipping: The most cost-effective maritime emissions reductions come from operational changes requiring minimal capital investment. Slow steaming alone can reduce fuel consumption and emissions 20-30% with no equipment modification—the main cost is longer transit times. Maersk's deployment of fleet performance monitoring across 700+ vessels identifies optimal speed-route combinations that reduced fleet-wide emissions intensity 12% between 2022 and 2024. Weather routing software from providers like DTN and StormGeo saves 3-5% fuel per voyage by optimizing paths around adverse conditions. These measures generate positive ROI immediately rather than requiring payback periods.

Port Electrification and Shore Power: Ships idling at port burn dirty bunker fuel to generate onboard electricity, creating localized air quality impacts and emissions. Shore power (cold ironing) allows vessels to plug into grid electricity while docked. The Ports of Los Angeles and Long Beach have invested $2.3 billion in shore power infrastructure since 2020, with 80% of container terminals now equipped. California Air Resources Board regulations require 80% of port calls to use shore power by 2027, creating regulatory certainty that justifies investment. Ships equipped with shore power connections avoid auxiliary engine operation, reducing portside emissions 95% during berth time.

Hydrogen-Electric Propulsion for Short-Sea Shipping: While transoceanic hydrogen shipping faces range and storage challenges, hydrogen fuel cell propulsion works for shorter routes. The Norled hydrogen ferry MF Hydra, operating in Norway since 2023, demonstrates commercial viability for routes under 100 nautical miles. In North America, Hornblower Group's zero-emission ferries in San Francisco Bay and New York Harbor use battery-electric propulsion with similar operational profiles. These deployments establish operational experience and supply chain capabilities that will scale to larger vessels as hydrogen production costs decline.

What Isn't Working

SAF Production Economics Without Policy Support: At current costs of $4-8 per gallon versus $2-3 for conventional jet fuel, SAF cannot compete on price alone. Projects that assumed purely market-driven adoption have stalled. The Blended Tax Credit under the Inflation Reduction Act—providing $1.25-1.75 per gallon depending on lifecycle emissions reduction—materially improves project economics, but the credit expires in 2027 unless extended. Producers report that without long-term policy certainty, investors discount project valuations 30-40%, making financing prohibitive. The lesson: SAF investment decisions must model policy scenarios, not assume policy persistence.

Voluntary Commitments Without Procurement Infrastructure: Many corporations announced net-zero aviation commitments without understanding how to procure SAF at scale. When these companies approach the market, they discover that SAF supply is fully contracted years ahead, verification systems for book-and-claim are fragmented, and their own travel management systems cannot track or report SAF usage. The gap between commitment and execution creates reputational risk when stakeholders question unfulfilled pledges. Organizations succeeding in this space invested in procurement capability before announcing targets.

Ammonia and Hydrogen for Long-Haul Shipping Without Infrastructure: The theoretical potential of green ammonia and hydrogen as zero-carbon maritime fuels collides with practical infrastructure absence. No North American port offers green ammonia bunkering at commercial scale. Onboard storage for these low-density fuels requires vessel redesigns that sacrifice cargo capacity. Safety protocols for ammonia (toxic at low concentrations) remain under development. First-mover shipowners ordering ammonia-ready vessels face stranded asset risk if infrastructure buildout lags expectations. The lesson: fuel pathway selection must consider infrastructure deployment timelines, not merely technical feasibility.

Carbon Offsets as Primary Strategy: Airlines that relied primarily on carbon offsets to meet emissions targets face growing skepticism about offset quality and regulatory exclusion of offsets from compliance pathways. CORSIA accepts offsets, but ReFuelEU does not—and SBTi guidelines limit offset use for scope 1 and 2 emissions to neutralizing residual emissions after reduction efforts, not as primary decarbonization. Organizations that treated offsets as the solution rather than a transitional bridge now face accelerated timelines for actual emissions reductions.

Key Players

Established Leaders

Delta Air Lines has committed $1 billion to SAF through 2030, signed the largest SAF purchase agreement in industry history (1 billion gallons from Gevo through 2038), and achieved the highest SAF consumption of any North American carrier at 0.5% of total fuel in 2024.

Maersk leads maritime decarbonization with 25 methanol-enabled vessel orders totaling $1.4 billion, operation of the world's first green methanol-powered container ship, and 2040 net-zero targets validated by SBTi.

United Airlines launched Ventures, the airline industry's first corporate venture fund focused on sustainable technology, and the Sustainable Flight Fund pooling corporate SAF demand to de-risk producer investments.

Chevron acquired Renewable Energy Group for $3.15 billion in 2022 and is investing $10 billion in lower-carbon energy through 2028, with significant SAF production expansion at Geismar, Louisiana and El Segundo, California refineries.

Carnival Corporation operates North America's largest cruise fleet and has deployed LNG-powered ships across multiple brands, reducing CO2 emissions 20% per voyage versus conventional fuel, with $5 billion committed to fleet modernization.

Emerging Startups

Twelve (formerly Opus 12) produces SAF through direct air capture of CO2 combined with electrolysis, partnering with Alaska Airlines for flight demonstrations. Their pathway offers feedstock availability unlimited by agricultural constraints.

Prometheus Fuels develops electrofuel production technology that synthesizes hydrocarbon fuels from captured CO2 and renewable electricity, with pilot-scale SAF production operational in California.

Amogy develops ammonia-to-power technology for maritime applications, enabling ships to use ammonia fuel with onboard cracking to hydrogen for fuel cells—addressing ammonia's combustion challenges.

Fleetzero is developing battery-electric container ships for coastal shipping, with a vessel design that swaps battery containers at port rather than recharging, addressing charging time constraints.

ZeroAvia leads hydrogen-electric aviation propulsion, completing 300+ test flights and securing orders for 600+ engines, targeting regional aircraft (19-90 seats) for commercial service by 2027.

Key Investors & Funders

Breakthrough Energy Ventures has invested over $2 billion across climate technologies including SAF producers (Twelve, LanzaJet) and maritime decarbonization (Amogy), providing patient capital for pre-commercial scaling.

The U.S. Department of Energy allocated $3 billion through the Inflation Reduction Act for SAF production facilities and technology development, with grant programs targeting 35 billion gallons annual production by 2050.

Amazon Climate Pledge Fund has invested in multiple sustainable aviation and logistics startups, motivated by Amazon's air cargo operations and shipping-intensive supply chain.

AP Moller Holding (Maersk's parent) operates Maersk Growth, investing in maritime decarbonization startups, and committed $500 million to the Copenhagen Infrastructure Partners green fuels fund.

TPG Rise Climate manages a $7 billion fund targeting climate solutions including sustainable fuels and transportation, with significant aviation and shipping portfolio allocation.

Examples

Alaska Airlines and Microsoft SAF Partnership: In 2024, Alaska Airlines and Microsoft executed a pioneering SAF agreement demonstrating corporate-airline collaboration at scale. Microsoft committed to purchasing SAF equivalent to its employee business travel on Alaska, approximately 10 million gallons over three years, at a negotiated premium above conventional fuel pricing. Alaska agreed to use the premium to fund additional SAF procurement beyond Microsoft's direct allocation. The structure included third-party verification through RSB certification and quarterly reporting to Microsoft's sustainability team. By December 2024, the partnership had delivered 4.2 million gallons of SAF consumption with verified emissions reductions of 12,400 metric tons CO2-equivalent. Key lesson: book-and-claim accounting enabled participation despite SAF's limited availability at Alaska's hub airports; Microsoft's willingness to pay premiums made the economics work.

CMA CGM Methanol Vessel Deployment on Trans-Pacific Routes: French shipping giant CMA CGM, operating extensive North American port calls, launched the first 15,000 TEU methanol-capable container vessels on Asia-Pacific-North America routes in late 2024. The vessels cost approximately 15% more than conventional equivalents but achieve 20% emissions reduction when burning bio-methanol sourced from European producers. CMA CGM secured methanol supply agreements at Rotterdam and Singapore, with Los Angeles infrastructure development underway for 2026 availability. Initial operating data showed fuel costs 35% higher than heavy fuel oil on a per-voyage basis, partially offset by carbon credit value under EU ETS when calling European ports. The investment thesis relies on tightening IMO CII ratings making conventional vessels commercially disadvantaged within 5-7 years.

Port of Vancouver Cold Ironing Expansion: The Port of Vancouver completed a $180 million shore power expansion in 2024, bringing total electrified berths to 18—the highest capacity in North America. The project, funded through a combination of port authority capital, Transport Canada infrastructure grants, and BC Hydro utility investment, provides 100 MW aggregate capacity serving cruise ships, container vessels, and bulk carriers. Shore power utilization reached 67% of eligible vessel calls in 2024, with cruise ships showing 92% connection rates versus 54% for container vessels (reflecting longer cruise berth times). Emissions monitoring documented 45,000 metric ton annual CO2 reduction from eliminated auxiliary engine operation. Success factors included regulatory mandates (BC's CleanBC program), rate structures making shore power cost-competitive with onboard generation, and standardized connection equipment across vessel types.

Action Checklist

• Quantify your organization's aviation and shipping emissions exposure using primary data from carriers, not industry averages, to establish credible baselines for target-setting.

• Evaluate SAF procurement pathways including direct purchase, book-and-claim certificates, and airline-specific programs; assess verification mechanisms and pricing structures for each.

• Engage logistics providers and shipping carriers on their decarbonization roadmaps; incorporate emissions performance metrics into RFP scoring and contract terms.

• Map regulatory exposure across jurisdictions—CORSIA, ReFuelEU, IMO CII, California LCFS—to anticipate compliance requirements and timeline mismatches.

• Model internal carbon pricing scenarios that account for SAF premiums (2-4x conventional jet fuel) and green shipping surcharges (15-40%) to inform budget planning.

• Identify port infrastructure availability for shore power, alternative fuel bunkering, and intermodal efficiency improvements on high-volume trade lanes.

• Establish monitoring and reporting systems capable of tracking emissions at voyage and flight level, enabling verification of reduction claims and identification of optimization opportunities.

• Engage with industry coalitions—Sustainable Aviation Buyers Alliance, Getting to Zero Coalition, Cargo Owners for Zero Emission Vessels—to leverage collective procurement power.

• Develop supplier engagement programs requiring carriers to disclose emissions data and demonstrate year-over-year intensity improvements.

• Build internal expertise on LCA methodologies and fuel pathway analysis to evaluate vendor claims critically and avoid greenwashing exposure.

FAQ

Q: What is the realistic cost premium for SAF versus conventional jet fuel, and when will parity occur? A: As of early 2025, SAF commands a 100-300% premium over conventional jet fuel, depending on production pathway and contract structure. HEFA (hydroprocessed esters and fatty acids) pathways using used cooking oil or animal fats trade at $4-5 per gallon versus $2.50-3 for Jet A. Power-to-liquid and gasification pathways remain more expensive at $6-8 per gallon but offer greater feedstock scalability. The Inflation Reduction Act's SAF blender's tax credit ($1.25-1.75 per gallon) closes approximately half the gap for qualifying fuels. Industry projections suggest cost parity for HEFA pathways by 2030-2032 as production scales and feedstock competition stabilizes; power-to-liquid parity likely requires 2035-2040 timeframes absent breakthrough cost reductions in electrolyzers and direct air capture.

Q: How do IMO CII ratings affect vessel operations and charter markets? A: The Carbon Intensity Indicator system rates vessels A (best) through E (worst) based on CO2 emissions per capacity-distance traveled. Vessels rated D for three consecutive years or E in any single year must submit corrective action plans to flag states, potentially facing operational restrictions. Market impacts are emerging: charterers increasingly demand C-rated or better vessels for term contracts, and D/E-rated tonnage faces discount pressure of $2,000-5,000 per day versus equivalent well-rated vessels. Shipowners with poor-rated fleets face choices between expensive retrofits (hull coatings, propeller modifications, engine upgrades), operational changes (slow steaming, route optimization), or early scrapping. The system's methodology remains controversial—some vessel types face structural disadvantage—but its market impact on charter decisions is already measurable.

Q: Can corporations use SAF certificates (book-and-claim) for Scope 3 emissions reporting under GHG Protocol? A: Yes, with appropriate documentation and disclosure. GHG Protocol's Scope 3 guidance permits market-based allocation of emissions reductions from fuels like SAF when certificates meet specific criteria: clear chain of custody, no double-counting, retirement of certificates matching the claim period, and independent verification. The RSB (Roundtable on Sustainable Biomaterials) and ISCC (International Sustainability and Carbon Certification) provide accepted certification schemes. However, reporting entities must disclose the use of market-based accounting and may need to report both location-based (physical fuel) and market-based (certificate-adjusted) emissions in parallel. Some ESG rating agencies and investor frameworks evaluate book-and-claim claims with skepticism; organizations should anticipate due diligence questions about physical versus attributed reductions.

Q: What infrastructure investments are most urgent for North American ports to support maritime decarbonization? A: Three infrastructure priorities emerge from current vessel orderbooks and regulatory trajectories. First, shore power expansion—California mandates and voluntary programs elsewhere require 100+ MW capacity at major container and cruise ports by 2027. Second, methanol bunkering capability—with 200+ methanol-capable vessels on order globally, early availability at gateway ports (Los Angeles, Houston, Vancouver) confers competitive advantage. Third, hydrogen and ammonia safety and storage infrastructure—while commercial-scale demand remains years away, permitting and safety protocol development require lead time. The U.S. Maritime Administration's Port Infrastructure Development Program and DOE's hydrogen hub designations provide federal funding pathways, but port authorities must move quickly to secure awards amid intense competition.

Q: How should organizations evaluate SAF pathway claims about lifecycle emissions reductions? A: Scrutinize three dimensions. First, boundary conditions: does the LCA include land-use change emissions for crop-based feedstocks, energy inputs for processing, and transport to blending facilities? Narrow boundaries systematically overstate reductions. Second, feedstock additionality: used cooking oil and agricultural residues offer genuine waste valorization, but purpose-grown crops may displace food production or natural ecosystems. Third, certification and verification: RSB, ISCC, and CORSIA-approved certifications apply standardized methodologies; unverified claims from producers should be treated skeptically. Organizations should request full LCA documentation using recognized methodologies (GREET, RED III) and verify that claimed reductions align with certified pathway ranges—typically 50-80% for HEFA, 70-90% for gasification, and potentially 90%+ for power-to-liquid with renewable inputs.

Sources

• International Air Transport Association, "Net Zero Roadmaps," 2024 Update
• International Maritime Organization, "2023 IMO Strategy on Reduction of GHG Emissions from Ships"
• BloombergNEF, "Energy Transition Investment Trends 2024," January 2025
• U.S. Department of Energy, "SAF Grand Challenge Roadmap," September 2024
• California Air Resources Board, "LCFS Pathway Certified Carbon Intensities," 2024
• International Civil Aviation Organization, "CORSIA Implementation Status," 2024
• Environmental Defense Fund, "Zeroing in on Healthy Air: Maritime Shipping Emissions," 2024
• Rocky Mountain Institute, "Mission Possible Partnership: Shipping Sector Transition Strategy," 2024