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Air-France-KLM Announces One of the Largest Sustainable

Aviation Fuel Supply Agreements in History

Air France-KLM Group said that it has purchased 1.6 million tonnes, or approximately 2 billion liters, of sustainable aviation fuel (SAF) from Nestle and DG Fuels. This is one of the largest SAF announcements in the aviation sector to date.

Under the terms of the new agreements, Nestle will provide the fuel to Air France-KLM over an 8-year period beginning in 2023, while DG Fuels will provide 600,000 tonnes between 2027 and 2036.

The agreements come at a time when the aviation industry is under increasing scrutiny as a large source of greenhouse gas (GHG) emissions, accounting for 2% to 3% of global emissions, with this percentage projected to increase considerably over the next few decades if no action is taken. SAF is viewed by market participants as one of the industry's most important options for mitigating its climate effect, as it produces much fewer carbon emissions than regular jet fuel.

Benjamin Smith, chief executive officer of Air France-KLM, stated:

"Decarbonization is the greatest challenge ever faced by the aviation sector. Air France-KLM is utilizing all available levers to reduce its environmental effect, including fleet replacement, eco-piloting, and increased usage of certified Sustainable Aviation Fuels. The contracts we have secured represent our long-term commitment to the global expansion of SAF production capacity, to the benefit of the entire industry."

The statement follows the introduction earlier this year of Air France-CO2 KLM's emissions reduction strategy, which aims to generate 30% less CO2 emissions per passenger/km by 2030 and net zero emissions by 2050. The new policy envisions using 10% SAF on all flights by 2030, and 63% by 2050, along with other efforts such as fleet renewal, adoption of eco-piloting techniques, and the development of multimodal transport options for short-distance journeys, among others.

Air France-SAF KLM's sourcing policy requires the firm to purchase SAF that do not compete with human food or animal feed supplies, is RSB or ISCC+ certified for their sustainability and does not include palm oil.

Air France-KLM Group Director of Sustainability Fatima Gloria de Soussa stated:

This deal represents our long-term commitment to expanding SAF's global production capacity for the benefit of the whole industry.

"MY Sustainable Aviation Fuel" by Nestle is produced entirely from renewable waste and leftover raw materials, such as discarded cooking oil. Compared to fossil jet fuel, the fuel cuts greenhouse gas emissions by up to 80 percent when utilized in its purest form. The fuel is compatible with existing aircraft engines and fueling infrastructure at airports, needing no additional expenditure. By the end of the next year, Neste anticipates reaching an annual SAF production capacity of 1.5 million tonnes.

Neste President and CEO Matti Lehmus stated:

"Neste is dedicated to assisting the aviation industry in achieving its 2050 target of net-zero carbon emissions, and sustainable aviation fuel will play a crucial part in this endeavor. Today's news, which represents a significant step forward in our partnership with Air France-KLM Group, demonstrates how we continue to assist businesses in reducing greenhouse gas emissions."

The SAF produced by DG Fuels utilizes cellulosic waste items, such as wood scraps from the logging sector, which do not threaten the food supply and are near water neutral. Additionally, the fuel generation system relies solely on renewable energy sources such as the sun and wind.

The CEO of DG Fuels, Michael C. Darcy, stated:

"DG Fuels is devoted to developing and supporting programs that provide airlines with practical and long-term benefits. We are pleased to take this next long-term step with Air France KLM to help the long-term sustainability of our world by lowering the environmental effect of air travel."

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