Page 14 - DMEA Week 31 2022

DMEA NEWS IN BRIEF DMEA

systems will most likely be available for of 449-billion litres by 2050. Currently, global on-year, Fawaz bin Mohamed Al-Fawaz told
short-haul commercial flights by 2035, but SAF production capacity is 125-million Argaam.
the majority of emissions come from long- litres. Investments are already in place to However, cost of sales increased due
haul widebody flights and to tackle these increase this to five-billion litres a year by to higher average prices of feedstock and
emissions, SAF is the only proven solution,” 2025. But rapid large-scale ramping up of SAF production inputs, as well as an increase in
observed International Air Transport production after that would need incentives, freight and distribution prices, which affected
Association (IATA) senior VP: environment because of the current high cost of these the contribution of increased sales to the net
and sustainability Sebastian Mikosz at the fuels. Last year, the price of SAF varied from profit, he said.
body’s annual general meeting in June. “We two and four times that of conventional jet Tasnee reported a decline in first-half
know it works, and we need to double down fuel. However, this year the price of jet fuel profits of 11 percent to SR606 million ($162
our efforts to get all actors of the industry on has risen dramatically, making SAF more million), down from SR684.3 million in the
board, including governments, to increase competitive - for the moment. prior-year period, according to a bourse filing.
production, availability and uptake.” “Incentives to transition electricity The increase in the cost of financing and
SAFs are very similar in their chemistries production to renewable sources like solar Zakat provision affected net profit as well, he
to fossil fuels, but they are produced from or wind worked,” highlighted IATA director- added.
sustainable feedstocks. These feedstocks can general Willie Walsh at the June AGM. “With Tasnee is expected to see lower demand in
be rapidly growing plants (called energy similar incentives for SAF, we could see the third quarter and may be further into the
crops), forestry waste, food scraps, animal 30-billion litres available by 2030. Though fourth quarter of this year, due to the current
waste fat, used cooking oil, and solid waste still far from where we need to be, it would global recession, Al-Fawaz said.
from businesses and homes, including paper, be a clear tipping point towards our net-zero Demand levels traditionally fall during the
packing and textiles, or a mixture of these. ambition of ample SAF quantities at affordable summer period by rates ranging between 15
Air bp, for example, makes its SAF from used prices.” and 20 percent, due to products required by
cooking oil and animal waste fat. The US, he pointed out, had taken the lead. customers as per their needs, he explained.
All the major commercial airliner That country was providing large incentives He added that global events are not
manufacturing companies (in alphabetical that will take its production of SAF to allowing much stock to be formed, leading to
order, Airbus, Boeing and Embraer) and 11-billion litres by 2030. pressure on demand and consequently selling
aeroengine companies (CFM International, EN prices.
GE, Pratt & Whitney and Rolls-Royce) have Tasnee has not received any official
worked to make their products compatible decision to increase feedstock prices in the
with SAF. Most, if not all, have successfully PETROCHEMICALS Kingdom so far, Al-Fawaz confirmed.
flown their aircraft/engine combinations using Feedstock prices were already noticeably
100% SAF. Already, fuel blends containing Tasnee profits drop despite increased, leading to a direct increase in
up to 50% SAF have been certified by ASTM production costs and inputs, thus reducing
International, the recognised authority on sales increase profit margins, he said.
these matters (ASTM originally stood for Shipping and distribution costs are still
the American Society for Testing Materials). Global economic pressures have eaten high compared to previous years, but are
Certification of 100% SAF for airliners now into the profits of Saudi Arabia’s National starting to ease noticeably for the first time
seems only a matter of time. Industrialization Co., also known as Tasnee, since the beginning of the pandemic, he
According to IATA, SAF would provide despite a sales increase, according to its added.
65% of commercial aviation’s carbon Finance Manager. ARAB NEWS
mitigation by 2050. Achieving this goal would The petrochemical maker saw a rise in
require an annual SAF production capacity sales in the second quarter by 38 percent year-

P14 www. NEWSBASE .com Week 31 04•August•2022