Industry Insights: Keith Lawless from SAF+ International Group

In the Industry Insights blogpost series, we sit down with each SASHA member to find out what drives them in their work and what challenges they face.

Here we speak to Keith Lawless, Chief Commercial Officer of SAF+ International Group, an e-fuel project developer convening actors across the supply chain to produce e-kerosene to decarbonise aviation.

As the SASHA Coalition well knows, uniting diverse actors is key to making progress in decarbonisation. Also following this approach is SAF+ International Group, a project developer bringing together technology providers to drive aviation e-fuels, otherwise known as e-SAF or e-kerosene, production.

Keith Lawless, SAF+’s Chief Commercial Officer explains how the company links up point source carbon capture companies, green hydrogen producers, and e-fuel technology providers. “What we really do,” Keith says, “is put everything together in the most efficient and economical way.” Getting into the weeds, the importance of collaboration in accelerating climate solutions becomes even clearer. “We coordinate mundane, but critically important, activities such as site selection, financing, permitting, distribution, technology integration, contracts, creation of a digital twin, etc.,” Keith explains. “We know that we cannot be experts in everything, so our role is assembling the best possible stakeholders and help them to be successful.”

SAF+ makes e-kerosene, a synthetic fuel which has the highest potential to reduce emissions from the range of sustainable aviation fuels (SAFs) available. Keith explains that by SAF+’s analysis, e-kerosene produced with captured carbon and green hydrogen from electrolysis “has a lifecycle emission reduction of over 90%, with scope for nearing 100%.” This reduction is significantly greater than that of other alternative fuels like biofuels, which reduce emissions by 50-80%. For that reason, e-kerosene is widely regarded as the most promising long-term SAF pathway aligned with aviation’s decarbonisation goals.

Not all SAFs are made equal

Given these key differences, the point of departure for policy driving e-fuels in aviation must be distinguishing them from other SAFs. “When airlines want SAF they’re not necessarily interested in what SAF they get, so they go for the cheaper option, usually biofuels,” Keith explains, “We’re selling apples and they’re buying kumquats.” The policy tool to address this problem is mandates that oblige certain levels of alternative fuel usage in certain time horizons. Sub-mandates can be designed to promote e-SAF over biofuels. Keith says that because of the low initial eSAF blending requirements, in the beginning the RefuelEU mandates would raise European ticket prices by less than 2% according to research by SkyPower, meaning such policies would force airlines to adopt more sustainable practices while incurring only relatively small extra costs on their business.

E-fuels need policy support from the get-go

The need to make this differentiation between SAFs is that much greater since however sustainable it may be, e-kerosene is by no means an easy option. Keith emphasises that these projects are hefty undertakings that need government support from the get-go. “It’s not like Lego, right? You can’t buy some Lego blocks and just build a refinery and start producing,” he laughs, “it takes years to do this.” Given the limited resources we have, we need them to be used for the right solutions from the outset.

Weak policies driving alternative fuels are a worldwide problem, but Keith explains that Europe is in a better position compared to North America. “The fact that there are mandates in Europe is great. I think SASHA is very useful for helping people to understand their importance,” he says. “The issue is that e-SAF is much more expensive than kerosene. Without the regulatory environment, it's not going to work.”

Another reason mandates are so crucial is in establishing a timeline that sends important demand signals and subsequently prompt production. “Everyone’s like ‘Yeah, great idea, we’ll get round to it when we can.’,” Keith says, “so funding goes to other projects that have more sense of urgency.” Getting that initial momentum is crucial, Keith continues, “because if you don't build the first plant, which is going to be the most expensive, you're not going to get the second, third and fourth generations and drive costs down.” The touchstone analogy for this investment-cost trajectory is wind and solar, the rollout of which has seen costs consistently fall decade by decade. “Government support at the beginning leads to private investment down the line.”

Derisking e-fuel production

A worrying trend for recent e-fuel projects is their inability to get to final investment decision (FID) and therefore realise production. “The main barrier to getting to FID is funding the FEED (Front-End Engineering and Design) study,” Keith says, “this is a very site-specific study that gives you a good idea of the cost.” But FEED studies can cost a whopping €50 million, a phenomenal investment given you might find out your project is ultimately not fit for purpose.

Derisking the FEED study is therefore a key intervention policymakers can make to help e-fuel projects cross the FID finishing line. “We could have many investors lined up with bags of money,” Keith says, “and they say ‘hey, if you get to FID we’ll be more than happy to invest, but investing in FEED studies is too risky.’” France is ahead of the game in this area, Keith notes, whose Agency for Ecological Transition (ADEME) covers 50-60% of FEED study costs. Other governments could follow suit.

Providing revenue certainty for e-fuels

There’s another matter of the teething issues for airlines shifting from conventional to alternative fuel offtake. “Airlines generally don’t like long term agreements,” Keith says, with 21 years of experience working for an airline under his belt, “that’s not the way they’re used to buying fuel. So they’re a bit nervous about price.” Conventional fuel purchase agreements are generally made on an annual basis, meaning airlines are less likely to find themselves locked into long-term fuel purchases at high prices if fuel costs fall during the duration of the agreement. SAF agreements, generally 10 years or more, are strikingly longer.

While longer SAF offtake agreements are considerably riskier for airlines, for e-SAF producers they’re essential. Making the business case to investors necessarily means demonstrating a guarantee of future sales. Keith explains that governments could help companies like SAF+ by developing policies which help with the higher cost of e-fuel – such as price certainty mechanisms or contracts for difference – the latter of which is a financial scheme by which governments pay the difference between an agreed price and future fluctuations to absorb risk for investors and encourage investment in face of volatile prices. Such policies would derisk investment in production and give buyers the confidence of a long-term supply.

Getting your hands on the green hydrogen feedstocks also poses a potential supply chain bottleneck for e-SAF producers. “It’s one of the reasons we like to work with SASHA,” Keith says, “you’re clear that the supplies of green hydrogen we have must be allocated to aviation instead of to, for example, hydrogen-powered trains. We already have electric trains and automobiles, is that really the best use of hydrogen?”

E-fuel distribution challenges

Keith points to one final challenge SAF+ faces which concerns distribution. “Currently the petrochemical companies control fuel distribution,” Keith says. Individual companies, usually oil and gas, own pipelines to airports, giving them the power to ice out competitors. This amounts to a monopoly over the infrastructure. “You could produce the best product in the world but if you can’t get it to your customer what are you going to do?” Keith says. “Fair access is critical. And governments could help by forcing distribution companies to allow SAF into their system.”

Find out more about SAF+ International here. The views expressed here do not necessarily reflect those of the wider SASHA Coalition.