Deep Dive: Sustainable Aviation & Shipping — From Pilots to Scale: The Operational Playbook

Quick Answer

Aviation and shipping together account for approximately 5% of global CO2 emissions, with both sectors on trajectories to more than double emissions by 2050 under business-as-usual scenarios. The transition from pilot projects to commercial-scale sustainable operations requires addressing three interconnected challenges: fuel supply development (SAF for aviation, green ammonia/methanol/hydrogen for shipping), infrastructure deployment (bunkering, storage, distribution networks), and demand aggregation (offtake agreements that de-risk capital investment). Leading companies are successfully scaling through structured partnerships between fuel producers, logistics operators, and corporate buyers, combined with supportive policy frameworks like the UK's SAF mandate and the EU's FuelEU Maritime regulation. The operational playbook emphasizes long-term offtake commitments, strategic infrastructure investment, and proactive engagement with regulatory developments.

Why This Matters

Aviation and shipping are among the most difficult sectors to decarbonize. Both rely on high energy-density liquid fuels that cannot easily be replaced by batteries or direct electrification. Both operate in highly competitive global markets where cost discipline is paramount. And both require coordinated infrastructure development across multiple jurisdictions.

Yet both sectors face intensifying pressure to decarbonize. The International Maritime Organization's 2023 strategy commits to net-zero emissions by 2050. ICAO's CORSIA scheme requires airlines to offset emissions growth, while regional mandates (EU SAF Blending, UK SAF Mandate) create direct requirements for sustainable fuel use. Corporate buyers increasingly demand low-carbon logistics for Scope 3 reporting.

The gap between commitments and implementation remains vast. In 2024, sustainable aviation fuel represented only 0.2% of global jet fuel consumption. Green ammonia and methanol for shipping remained in demonstration phase. Scaling these solutions requires an operational playbook that translates pilot project learnings into commercial deployment.

Key Takeaways

• SAF production capacity must scale from current 1.5 million tonnes to 30 million tonnes annually by 2030 to meet mandated blending requirements
• Long-term offtake agreements (7-15 years) are essential for financing new SAF production facilities, with 2024-2025 seeing major deals from United, Delta, and British Airways
• Green shipping fuels (ammonia, methanol, hydrogen) are 3-5 years behind SAF in commercial readiness, with first commercial-scale vessels launching in 2024-2025
• Port infrastructure investment is the critical bottleneck for green shipping, with less than 1% of global ports equipped for ammonia or methanol bunkering
• Book-and-claim accounting enables corporate buyers to support sustainable fuel development even when physical delivery to specific flights or voyages is impractical
• Policy frameworks (UK SAF Mandate, EU FuelEU Maritime, US 45Z clean fuel production credit) provide essential demand signals and price support
• Strategic partnerships between fuel producers, logistics providers, and corporate buyers are accelerating deployment faster than any single actor could achieve alone

The Basics

Understanding the Fuel Challenge

Aviation and shipping face similar fundamental challenges: they require fuels with very high energy density that can be stored and distributed using existing infrastructure. Current solutions include:

For aviation:

• Sustainable aviation fuel (SAF): Drop-in replacements for conventional jet fuel made from waste oils, agricultural residues, or synthesized from captured CO2 and green hydrogen
• HEFA (Hydroprocessed Esters and Fatty Acids): Most mature pathway, converting used cooking oil and waste fats into jet fuel
• Power-to-Liquid (PtL) / e-fuels: Synthetic fuels made from green hydrogen and captured CO2, offering near-unlimited feedstock potential but currently high costs
• Alcohol-to-Jet (AtJ): Converting ethanol or other alcohols to jet fuel, leveraging existing biofuel supply chains

For shipping:

• Green ammonia: Zero-carbon fuel when produced from renewable hydrogen, requiring new engine designs but offering high energy density and established industrial production
• Green methanol: Lower energy density but easier handling than ammonia, with Maersk leading adoption for container vessels
• Hydrogen: Direct combustion or fuel cell applications for shorter routes, constrained by storage volume requirements
• Biofuels: Drop-in replacements for marine fuel oil, but supply constraints limit scalability

The Scaling Challenge

Pilot projects have demonstrated technical viability for all major sustainable fuel pathways. The challenge is now commercial scaling, which requires:

1. Production capacity investment: Each new SAF refinery requires $500M-2B capital and 3-5 years construction time. Green ammonia plants require similar investment at scale.

2. Infrastructure development: Airports need SAF blending and storage capability. Ports need bunkering infrastructure for new fuel types with different safety and handling requirements.

3. Demand aggregation: Individual buyers cannot justify dedicated production capacity. Pooled demand through offtake agreements or consortia is essential.

4. Cost gap bridging: Sustainable fuels cost 2-5x conventional alternatives. Policy support (mandates, credits, carbon pricing) and premium pricing from corporate buyers must bridge the gap during scale-up.

Decision Framework

Factor	Aviation/SAF	Shipping/Green Fuels
Technology readiness	Commercial (HEFA), emerging (PtL)	Demonstration (ammonia), early commercial (methanol)
Supply availability 2025	~3 million tonnes SAF globally	~1 million tonnes green methanol, minimal ammonia
Cost premium over fossil	2-4x for HEFA, 5-8x for PtL	2-3x for methanol, 3-5x for ammonia
Infrastructure requirements	Blending at existing airports	New bunkering infrastructure required
Regulatory drivers	EU SAF mandate, UK mandate, CORSIA	IMO 2050 target, FuelEU Maritime
Demand aggregation	Book-and-claim systems operational	Emerging book-and-claim for shipping

Practical Examples

Example 1: United Airlines' SAF Procurement Strategy

United Airlines established the most aggressive SAF procurement strategy among US carriers, combining equity investments in SAF producers, long-term offtake agreements, and operational integration across its hub network.

Strategic approach:

• $100 million investment in Fulcrum BioEnergy (now part of Marathon Petroleum's SAF portfolio)
• Equity stake in Alder Fuels developing alcohol-to-jet pathway
• 15-year offtake agreement with World Energy for 1.5 billion gallons of SAF from new California facility
• Operational integration at Los Angeles hub with dedicated SAF receiving and blending infrastructure

Outcome: United secured commitments for 3 billion gallons of SAF by 2030, representing 25% of projected fuel consumption. The airline operates the world's first regular scheduled flights using blended SAF from commercial production. By taking early positions in production ventures, United captured supply access that later-moving competitors now struggle to secure. The investments also position United for Inflation Reduction Act clean fuel production credits through its producer stakes.

Example 2: Maersk's Green Methanol Fleet Transition

Maersk, the world's largest container shipping line, made an industry-transforming commitment to green methanol, ordering 25 container vessels capable of running on green methanol between 2021-2024.

Strategic approach:

• First-mover commitment to methanol-capable dual-fuel vessels, accepting higher capital costs for fuel flexibility
• Partnerships with green methanol producers (REintegrate, European Energy) to secure supply
• Port infrastructure investment through partnership agreements at key hub ports
• Book-and-claim system allowing customers to purchase green methanol shipping credits for voyages where physical supply is unavailable

Outcome: Maersk's first methanol-capable vessel, Laura Maersk, launched in 2024 with regular sailings between Shanghai and Denmark using green methanol. The company secured 730,000 tonnes of annual green methanol supply through long-term agreements. Major customers (Amazon, IKEA, Nike) signed premium freight contracts that include verified green fuel use. Maersk's demand signal catalyzed green methanol production investment that benefits the entire industry.

Example 3: Heathrow Airport's SAF Coalition

Heathrow Airport, in partnership with British Airways, Virgin Atlantic, and other airlines serving the airport, established a collaborative approach to SAF infrastructure development and demand aggregation.

Strategic approach:

• Coalition formation bringing together airport, airlines, and fuel suppliers to coordinate investment and demand signals
• Infrastructure investment in dedicated SAF receiving, storage, and blending facilities at the airport
• Joint offtake commitments from multiple airlines aggregating demand to justify supplier investment
• Connection to UK SAF Mandate implementation, positioning Heathrow as the primary SAF import and distribution hub

Outcome: Heathrow commissioned dedicated SAF infrastructure in 2024, enabling blended SAF supply to all airlines operating from the airport. The coalition secured commitments from multiple SAF producers for supply to Heathrow. British Airways and Virgin Atlantic announced joint offtake agreements totaling 500 million litres annually by 2030. The collaborative model reduced risk for individual participants while accelerating deployment faster than any single airline could achieve.

Common Mistakes

1. Waiting for Policy Certainty Before Acting

Companies that delay sustainable fuel commitments until regulatory frameworks are fully defined lose the opportunity to secure supply access and shape favorable policies. Early movers like United and Maersk secured advantageous supply agreements and production stakes that later entrants cannot access at equivalent terms.

2. Underestimating Infrastructure Requirements

Sustainable fuel deployment requires infrastructure investment beyond fuel production. Airports need SAF blending facilities. Ports need new bunkering infrastructure with different safety protocols. Companies that plan for fuel supply without infrastructure often face bottlenecks that delay deployment.

3. Pursuing Individual Solutions Rather Than Coalitions

No single airline or shipper can justify dedicated SAF production capacity or port infrastructure. Demand aggregation through coalitions, consortia, or book-and-claim systems is essential. Companies that pursue isolated bilateral deals often find suppliers unwilling to commit production without pooled demand.

4. Ignoring Scope 3 Customer Demand

Corporate logistics buyers increasingly require low-carbon shipping and aviation options for Scope 3 reporting. Carriers that cannot offer verified sustainable fuel options lose access to premium customer segments. Customer engagement should drive sustainable fuel strategy, not follow it.

FAQ

Q: What is book-and-claim accounting and how does it work for sustainable fuels?

A: Book-and-claim separates the physical delivery of sustainable fuel from the environmental attribute transfer. A producer generates verified sustainable fuel at Location A, sells the environmental attributes (avoided emissions) to a buyer whose actual consumption occurs at Location B (where physical sustainable fuel is unavailable). The buyer "claims" the emissions reduction while the producer "books" the physical sustainable fuel into the general supply. This approach enables buyers to support sustainable fuel production even when physical delivery to specific routes is impractical, similar to renewable electricity certificates. Credibility requires third-party verification (RSB, ISCC) and robust chain-of-custody documentation.

Q: How should corporate logistics buyers evaluate sustainable fuel programs?

A: Key evaluation criteria include: certification standard (RSB, ISCC EU provide highest assurance), feedstock transparency (lifecycle emissions vary significantly by feedstock), additionality (does the purchase drive new production or shift existing supply), and reporting methodology (can emissions reductions be reported under GHG Protocol Scope 3 guidance). Ask for: feedstock documentation, lifecycle emissions calculations, third-party verification reports, and clarity on whether emissions reductions are additional to baseline supplier obligations.

Q: What role does hydrogen play in aviation and shipping decarbonization?

A: Hydrogen is a medium-term solution for both sectors, but with different applications. In aviation, hydrogen will likely power short-haul routes (under 1,500 km) through direct combustion or fuel cells, with first commercial aircraft expected in the early 2030s. Longer routes will rely on SAF or e-fuels synthesized from hydrogen. In shipping, green ammonia (made from green hydrogen) is the leading candidate for long-distance routes due to higher energy density than pure hydrogen. Hydrogen may power ferries and short-sea shipping directly.

Q: How do the EU FuelEU Maritime and UK SAF Mandate requirements work?

A: The EU FuelEU Maritime regulation, effective 2025, requires ships visiting EU ports to progressively reduce lifecycle GHG intensity of energy used, reaching 80% reduction by 2050. Compliance can occur through blending sustainable fuels, using shore power, or purchasing credits from over-performing vessels. The UK SAF Mandate, effective 2025, requires jet fuel suppliers to deliver increasing percentages of SAF, reaching 10% by 2030 and 22% by 2040. Non-compliance triggers per-litre penalties that effectively set a price floor for SAF.

Action Checklist

• Conduct current-state emissions assessment for aviation and shipping activities, identifying highest-emitting routes and modes
• Evaluate sustainable fuel availability in key origin-destination markets, identifying where physical delivery is feasible versus where book-and-claim is necessary
• Establish sustainable fuel procurement targets aligned with corporate climate commitments and Scope 3 reduction requirements
• Join industry coalitions (SAF Buyers Alliance, Clean Cargo, Science Based Targets Initiative transport sector work) to aggregate demand and share intelligence
• Engage priority carriers on sustainable fuel capabilities, roadmaps, and partnership opportunities
• Evaluate offtake agreement options for long-term sustainable fuel supply, considering duration, volume flexibility, and pricing mechanisms
• Assess infrastructure requirements at key logistics nodes (airports, ports) and engage facility operators on development timelines
• Develop customer engagement strategy positioning sustainable fuel capabilities as premium service offering
• Monitor regulatory developments (SAF mandates, FuelEU Maritime, carbon pricing) and integrate compliance requirements into planning
• Establish verification and reporting systems for sustainable fuel use claims, ensuring GHG Protocol alignment and third-party verification

Sources

• International Energy Agency - Aviation and Net Zero 2024
• International Maritime Organization - 2023 IMO GHG Strategy
• UK Department for Transport - SAF Mandate Consultation Response 2024
• European Commission - FuelEU Maritime Regulation Implementation
• World Economic Forum - Clean Skies for Tomorrow Coalition 2024 Report
• Global Maritime Forum - Getting to Zero Coalition Progress Report 2024
• IATA - SAF Deployment and Production Capacity 2024
• Maersk - Green Methanol Strategy and Fleet Update 2024