Air Freight News

Shell and Lufthansa Group dign non-binding Memorandum of Understanding for sustainable aviation fuel (SAF) supply

Aug 01, 2022

Representatives of Shell International Petroleum Co Ltd. and Deutsche Lufthansa AG (Lufthansa Group) have signed a non-binding Memorandum of Understanding (MoU) for exploring the supply of Sustainable Aviation Fuel (SAF) by Shell to the Lufthansa Group for seven years at airports across the globe, starting in 2024.

The parties contemplate negotiating towards reaching a definitive purchase agreement with the total volume supplied reaching up to 594 million gallons (1.8 million metric tonnes). If a definitive agreement is reached it would be one of the most significant commercial collaborations for SAF in the aviation sector and Shell’s largest SAF commitment to date.

Jan Toschka, President, Shell Aviation, commented: “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 decarbonise 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 decarbonisation in the aviation industry.”

Katja Kleffmann, Head of Fuel Management Supply Lufthansa Group, commented: “We are happy to enhance our long standing global business with Shell by signing this MoU. As an industry we have to work jointly towards making flying more sustainable and to achieve net-zero carbon emissions by 2050. Shell is very experienced with the global handling of Jet fuel and that is one key element for our trust for smooth operations of Sustainable Aviation Fuel, too.”

Unlike most SAF supply arrangements where the fuel is produced from only one technology, the potential SAF to be supplied by Shell is to be produced by up to four different approved technology pathways and a broad range of sustainable feedstocks.

The MoU contributes to Shell’s ambition of having at least 10% of its global aviation fuel sales as SAF by 2030 and on the Lufthansa Group’s ambition to drive the availability, the market ramp-up and the use of SAF as a core element of its sustainability strategy. The Lufthansa Group is already the largest buyer of SAF in Europe and one of the airlines enabling their customers to report their emission reductions by an audited certificate.

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