Representatives of Shell International Petroleum and Deutsche Lufthansa AG (which is the Lufthansa Group) just signed a non-binding deal for exploring the supply of Sustainable Aviation Fuel (SAF) by Shell to the Lufthansa Group for 7 years at various airports, starting in 2024.
The parties are currently considering more negotiations in order to reach a definitive purchase agreement, with the total volume supplied reaching upwards of 594 million gallons (1.8 million metric tonnes).
If a definitive agreement is reached, then this will be a major commercial collaboration for SAF in the aviation sector and Shell's largest SAF commitment to date.
"I am very happy to see the relationship between Shell and the Lufthansa Group moving towards reaching our respective sustainability goals. It is encouraging to see large flagship carriers coming to us to discuss SAF supply deals, knowing there will be a lot of things to be defined and determined at a later stage, including established price markers. SAF is the most significant way to decarbonize aviation over the decades to come. Our relationship goes beyond commercial arrangements – it is strategic and aligned regarding the view that SAF holds the key to achieving a sustainable aviation future. The potential SAF purchase agreement contemplated under the MoU, by its anticipated volume size, term period, and geographic scope, is expected to be a milestone if concluded and shows the way forward for decarbonization in the aviation industry," says Jan Toschka, President, Shell Aviation.
Unlike many other SAF supply arrangements where the fuel is usually produced from one technology, the potential SAF to be supplied by Shell is that it can be produced by up to four different approved technology pathways as well as a broad range of sustainable feedstocks.
The Lufthansa Group is the largest buyer of SAF in Europe right now and one of the only airlines that allow their customers to report their emission reductions by an audited certificate.