Skift Travel News Blog

The European Parliament has passed one of the first sustainable aviation fuel, or SAF, mandates that would force production of the low-carbon fuels to ramp up quickly in the coming decades.

The legislature approved what are known as the “ReFuelEU Aviation” standards Thursday that lay out a rapid ramp up in SAF adoption in five-year increments through 2050. In just three years, 2 percent of all aviation fuel in the bloc will need to be SAF, with the percentage rising to 85 percent by 2050.

In a win for environmental groups, the parliament approved higher mandates than most airlines wanted. SAF must make up 6 percent of all aviation fuel in Europe by 2030, with 2 percent of that coming from synthetic sources — also known as e-kerosene. Airline trade group Airlines for Europe (A4E) and many of its members had supported a 5 percent mandate by the end of the decade, while International Airlines Group backed the 6 percent requirement.

The European parliament also removed palm oil byproducts from the list of approved SAF feedstocks. Production of palm oil is notably carbon intensive.

“If we are serious about fighting climate change and de-carbonizing aviation, Europe needs to make more choices like the one we witnessed today,” advocacy group Transport & Environment Aviation Policy Officer Matteo Mirolo said in a statement. “EU lawmakers have gone a good way towards a definition of SAFs that is positive for our planet and the credibility of aviation’s green future.” 

The SAF mandates, however, are not a done deal yet. They still need to be finalized across the branches of the EU government, including the parliament and European Commission, before a planned implementation target of January 2023. 

SITA, a global technology provider for the aviation industry, has raised $400 million in so-called green financing.

As Skift described in its 2022 Megatrends report, green financing is an emerging trend where investments are made in companies that support or provide planet-friendly practices or products.

Four new banks have now signed up to support SITA with a sustainability-linked revolving credit facility, which has a minimum three-year term, the company said on Thursday.

The new funds will be directly linked to pre-agreed environmental key performance indicators and yearly targets, with a bonus (or penalty charge) on the interest margin depending on SITA’s performance. Performance against the targets will be externally audited.

The cash will go towards supporting the company’s general business needs, “such as developing new solutions and strategies to alleviate the air transport industry’s challenges of today and in the future,” it said in the statement.

SITA said it had ramped up its emission reduction efforts in recent years, achieving carbon neutral status under The CarbonNeutral Protocol in 2021. More recently it announced its commitment to setting science-based targets via the Science Based Targets initiative (SBTi) to join other leading companies to combat climate change aligned to net-zero and the 1.5C scenario of the Paris Agreement.

SITA’s five existing banking partners also participated in the raise.

“Sustainability is high on our agenda and we are deeply committed to ensuring a sustainable future for all, including for our employees, customers, and partners,” said Nicolas Husson, SITA’s chief financial officer. “We are delighted to secure financing that is directly linked to the performance of our sustainability ambitions.”

Speaking at Skift’s Sustainable Tourism Summit at the end of June, Intrepid’s chairman revealed that the tour operator recently received a large investment from a family-owned private equity firm because of its sustainability stance.

Saudi Arabia is also aiming to prop up its Red Sea tourism project with an up to $2.7 billion loan in green financing.

During the pandemic, SITA’s CEO said the tech provider had weathered the storm. but the private company will undoubtedly have been impacted by poor performances from its airports and airline customers as the pandemic continued to hammer travel.

“We contained our fall in revenue to -27% for the year, at $1.34 billion, compared to the previous year’s $1.8 billion,” said Barbara Dalibard in her 2020 report. “In reacting quickly to the crisis, we decreased our cost base in 2020 by 18 percent versus prior year, while reducing external support by 50 percent.”

It also achieved $300 million in cost reductions.

SITA was formerly known as Société Internationale de Télécommunications Aéronautiques, and was founded by 11 airlines more than a decade ago. The company’s board includes executives from several airlines.

The chairman and co-founder of Intrepid Travel has said there was too much “rhetorical flourish” from travel companies when it comes to discussing sustainability.

Speaking at the Skift Sustainable Tourism Summit on Wednesday, Darrell Wade bemoaned how organizations were touting a “build back better” ethos, while failing to take action.

“It’s disappointing, embedded into marketing, or even worse the boardroom,” he said during the online event.

“Half of the companies, probably more, will have done nothing. At the World Travel & Tourism Council, a good number of companies are talking the right way, and committing, but not enough are putting the rubber on the road.”

While some companies had managed to go beyond what he described rhetorical flourish, he said travel companies needed to ensure there was”company engagement” from the top, and they needed to commit measurable action, including science based targets. “You need to sign up to have that line in the sand,” Wade told moderator Rafat Ali, Skift CEO and co-founder.

“Sustainability is not easy, it’s heavy lifting. Even one aspect like climate change, to work out a pathway to zero emissions, is a lot of work,” he added.

Tour operators like Intrepid are at the forefront of the sustainability movement, Wade argued, because they are, in a physical sense, on the ground and dealing with locals, going face to face with communities.

“We’re often in remote areas, and that’s one of the reasons we go there,” he said. “It takes something climate change, and not a lot of imagination, to realize destinations will be impacted by climate change, before the New Yorks and Shanghais of the word,”

And overall he said that tour operators, including Intrepid, still have a long way to go, as they still emit a lot of carbon emissions.

By failing to take action, operators could end up alienating a public who are demonstrating intent to travel greener. Travel could become the new oil, Wade suggested, if tourists started saying “I’m not going to get in a plane.”

“It’s the role of every CEO, and staff member to start banging the drum,” he added.

CORRECTION: An earlier version of this article described Wade as CEO.

Multi-modal transportation platform Omio has raised $80 million, with plans to expand via new partnerships, acquisitions and further growth into the U.S. after Europe-wide expansion.

Omio launched in North America in 2020, but was then hit by the pandemic. However revenue has recovered to more than double pre-pandemic levels, and according to reports founder and CEO Naren Shaam said the U.S. market had “bounced back.”

The Berlin-based travel app, which integrates more than 1,000 transportation providers across trains, buses, ferries, cars, airport transfers as well as flights, may also be able to tap into increased demand for sustainable travel (it claims that one in four customers change their bookings from flights to trains), as well as travel’s holy grail of the connected trip.

Earlier this year Omio helped build a new international website for the UK’s London North Eastern Railway, to make train travel easier to book for overseas customers. The rail company counts 10 countries as its global market, including China, Japan, Spain, South Korea and Italy. The new search and booking engine lets customers in those countries purchase tickets in their own language and currency.

In March it added a partnership with CheckMyBus, a global intercity bus search engine, while it also has collaborations in place with Kayak, Huawei and Portugal’s state-owned railway company.

Omio’s Series E funding came from new investors Lazard Asset Management and Stack Capital Group. Existing investors NEA, Temasek and funds managed by Goldman Sachs Asset Management also contributed.

In 2020 Omio raised $100 million to fund the purchase of other travel companies, after buying Australia-based Rome2Rio in 2019.

American Express Global Business Travel, Shell and Accenture have teamed up to launch Avelia, a so-called book-and-claim platform designed to help businesses buy sustainable aviation fuel.

The book and claim model allows companies to pay for the fuel, and claim the benefits, even if it’s not available at their departure airport. The fuel is instead fed into another aircraft in an airport where available.

The goal is to drive down the costs of a fuel that’s between two and eight times dearer than conventional jet fuel.

“Once book-and-claim is approved by industry bodies as an acceptable form of emissions reduction, Avelia could enable airlines and companies who choose sustainable aviation fuel to authenticate, record and report the associated emissions reduction benefits of the fuel towards their voluntary environmental, social, and corporate governance reporting, regardless of where in the world the fuel is used to fuel a flight,” the company said.

The model is also used when purchasing “green electricity” and has been described as one of the most suitable solutions by the European Union. “It balances the fuel’s technical potential, the administrative burden for the aviation industry and fundamental EU Emissions Trading System requirements, like fraud protection,” according to one study.

Drop in the Ocean

The road to decarbonizing business trips is a long one, however. It’s still hard to tell if there’s any meaningful impact. The fuel is still very expensive, and as a pilot program, Avelia will initially offer one million gallons of the fuel, which it claimed was enough to power almost 15,000 individual business traveler flights from London-to-New York.

Overall this pilot wants to demonstrate the credibility of the book-and-claim model. Avelia was developed by Shell and Accenture, with the support of the Energy Web Foundation, but wants to tap into the buying power of Amex GBT’s 19,000 customers.

Will they pay the premium?

“Sustainable aviation fuel is a key enabler of decarbonisation in the aviation industry, and it’s available today. However, it’s currently scarce and costs more than conventional jet fuel,” said Jan Toschka, president of Shell Aviation. “Avelia will help trigger demand for sustainable aviation fuel at scale, providing confidence to suppliers like us to further increase investment in production, and in turn helping to lower the price point for these fuels.”

Amex GBT recently formed an alliance with Shell to help increase the supply of sustainable aviation fuel.

Shell has committed to purchasing the environmental attributes equivalent to 100,000 gallons of the fuel over the pilot phase. It said it would increase that as soon as more of the fuel is available, as it wants to abate 45 percent of its corporate travel emissions through sustainable aviation fuel by 2030.

Sustainable aviation fuel can be made from plant or animal material, and can reduce lifecycle emissions by up to 80 percent compared to conventional jet fuel

“We’re calling on all companies to join us and share the costs and benefits of sustainable aviation fuel across the travel and aviation sectors,” said Paul Abbott, CEO of Amex GBT.

United Airlines and United Airlines Ventures last week announced they were buying at least 300 million gallons of sustainable aviation fuel from utilization company Dimensional Energy over a period of 20 years. United aims to be a “100 percent green net zero” by 2050, without the use of traditional carbon offsets.

On Sunday, Qantas Airways and Airbus said they would invest up to $200 million to accelerate the development of a sustainable aviation fuels industry in Australia to help meet the airline’s goal of lowering carbon emissions.