Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’

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Updated 13 November 2022
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Boeing executive sees sustainable aviation fuel as ‘key to airline industry’s decarbonization’

  • Sustainability Policy region lead Robert Boyd tells “Frankly Speaking” the industry is committed to decarbonization over next 30 years
  • He calls for investment in sustainable fuel, replacement of old fleets, and operational and traffic-management improvements

DUBAI: The aviation industry is committed to decarbonizing, but with air travel set to triple by 2050, alternative energies such as electric and hydrogen will not solve the challenge; airlines must replace old fleets, airports should improve air traffic management structures and industry must invest in sustainable aviation fuel.

However, there is a “huge amount of work” needed to drive down SAF prices, including more research and development, and technological development on feedstock. Also, SAF must be available to developing countries to make an impact beyond the largest aviation hubs. This is according to Robert Boyd, an expert in SAF and the regional lead of aircraft manufacturer Boeing’s global sustainability policy and partnerships.

Appearing on “Frankly Speaking,” the Arab News weekly current-affairs talkshow that dives deep into regional headlines and speaks with leading policy makers and business leaders, he said: “The good news is that there are several pillars of action that the aviation industry has at its disposal, and these are working to essentially execute the decarbonization challenge over the next 28 years.”




Boeing executive Robert Boyd being interviewed by Katie Jensen on Frankly Speaking.

But given that “technology limitations do not allow for hydrogen or electric to power wide-body, long-haul aircraft, SAF is the key.”

With climate change taking center stage at the UN Climate Change Conference in Egypt, many people are wondering whether the aviation industry — currently responsible for 2.5 percent of global emissions — can really go green, or if real progress is still decades away.

“In a decarbonizing world, if all sectors are not doing it at the same pace, then the relative scale of emissions for aviation or shipping makes it hard to decarbonize,” he said. “So, it is absolutely critical to decarbonize. There is a clear plan to achieve net zero by 2050. And that can be done through various pillars.

“The obvious one is new aircraft. A new aircraft can be anywhere from 20 to 25 percent more fuel efficient than its predecessor.”

Boyd called them “significant numbers,” pointing out that something like 25 tons of carbon dioxide can be saved per day saved by using the best-in-class modern fleet. “That can be a couple of hundred thousand tons of CO2 over its lifetime. So, we need to ensure that we are using the most efficient modern fleet, which might get 15 to 25 percent CO2 dividend globally. It is not small.”




An Airbus A350-900 is refueled with sustainable aviation fuel produced by French energy group Total at France's Roissy airport on May 18, 2021. (AFP file)

He cited operational efficiencies as another opportunity for improvement. “Aviation has been on this for several years or even decades. A lot of the easy operational improvements are already there. They’re embedded in the technology that we use today,” he said.

Improvements in air traffic management offer yet another opportunity, but these solutions have limitations, according to Boyd, will not fix the aviation emissions problem. “The major one is replacing the energy source with something sustainable. That’s where we put significant emphasis on sustainable aviation fuel as it is doing to do the heavy lifting on decarbonization till 2050.”

What about ideas of electric or hydrogen as a potential replacement for kerosene? “These are really exciting, and there has to be continued work on this, but they won’t, by themselves, solve the decarbonization challenge,” Boyd told “Frankly Speaking” host Katie Jensen.

“Today about three quarters of all of the international emissions are from wide-body long-haul travel, and technological limitations don’t allow for hydrogen or electric in that space just yet. Maybe it may be in due course, but today it’s not a viable solution. So, SAF is the key over the next 30 years.”

The problem with SAF is of course the price: More than double the price of regular jet fuel, plus it is in short supply. Figures from 2019 show that SAF accounted for just 0.1 percent of global fuel use for jets, while the 2025 target was to have 2 percent of global jet fuel come from SAF.




Surging jet fuel prices have hampered airline efforts to rebound from two years of the COVID-19 pandemic. The cost of sustainable aviation fuel is currently double that of regular jet fuel.  (AFP)

Under the circumstances, should governments step in and subsidize, or will travelers be forced to pay with higher airfares?

“We do talk in a very positive way about sustainable aviation fuel and the potential. But that realism around where we are at today is really important because it shows what degree of challenge lies ahead,” said Boyd. “What is going to be needed is exponential growth. We are on track for around somewhere between 4 and 6 billion liters of SAF by 2025. But it still leaves a huge mountain to climb in terms of scaling up.”

Having said that, Boyd acknowledged there are big barriers to scaling up faster. “Definitely cost. If SAF was at cost-cost parity today and it was available, every airline would use it. We need to benefit from the efficiencies of getting scaled. That is really just starting. There is a huge amount of work, sort of research and development and technology, pure technology work on feedstock, which can bring some of these prices down,” he said.

He cited the US as a good example where the Inflation Reduction Act of 2022 “provides a huge incentive to develop green hydrogen and renewable fuels for (uses in) both ground and in air especially. There is a wave of supply coming along. And with that, I expect we will see price improvements.”




A Hop (Air-France low cost company) plane is refueled at Roissy-Charles de Gaulle Airport, north of Paris, on August 6, 2018. (AFP file) 

Boyd said he is optimistic about SAF supplies too. “There is expansion of existing facilities and new facilities are being developed. Some of these are starting to come online now, 2022,” he said. “There will be more in 2023 going right through to 2025 and beyond. We have visibility, with some respectable granularity, out to about 2027.”

There is talk about hydrogen-powered planes, but hydrogen requires a large volume to store it which would require a complete redesign of a plane. What does Boyd think of the potential of the zero-emission fuel?

“Certainly, there is a lot of work going on with hydrogen. There is still a lot of learning to do there. It is accurate to say we can do it,” he said. “But what if you have a drastically different-looking plane? Moreover, trying to totally redesign airports could change the whole efficiency of aviation in terms of restrictions for how you refuel a hydrogen plane. There are trillions of dollars of fuel infrastructure already, either in the ground or pipelines going to airports.”

He described these as “really complex questions” that need answers before you can have a sort of a sensible discussion on whether hydrogen is actually realistic as a solution for aviation in a 2050-2100 timeframe. This is “certainly not to say that there should not be continued work going on there, but it really will not be the silver bullet.”

Does Boyd think the carbon reductions that are being talked about COP27 and other big events will change the future of airports such as Saudi Arabia’s NEOM Airport? “If you are building a brand new airport, (you have to) think 10 or 15 years into the future. What is likely to be feasible, plausible or actually implemented, things like, should you have hydrogen supply built into the airport? It is much easier to do this when you are building the airport than to do a patched-up effort.”

Boyd does not rule out the idea of retrofitting carriers, something in which Ryanair has invested about $200 million. He cited the example of the eco demonstrator, a program by which Boeing buys back an existing aircraft from an operator. “We set it up as an experimental lab, putting all sorts of technology on board to test anything and everything. There have been about 300 different technologies tested on the eco-demonstrator over the past decade. Many of these you now see being introduced into planes today.”

He also talked about how Boeing is trying to make planes lighter and more fuel efficient, and whether these will change travelers’ experience. “People may not appreciate the amount of carbon fiber that in a Boeing in a Dreamliner or a 787. But that is tremendous in terms of weight,” he said. “It is incredibly strong and incredibly light, allows the appropriate amount of flex, which can give better aerodynamic properties from the wings.”

As of now, most of the aviation emissions are coming from developed nations, but the future of growth is expected be in developing countries. Will they have the deep pockets of nations like the US and Europe to fund emission reductions? “This comes to the crux of why decarbonization is critical,” Boyd said. “You need to decouple carbon dioxide from aviation itself.

“If we just focus on a couple of (advanced industrial) countries and think the job is done, then it is not at all. The same momentum needs to translate to China, India, parts of Asia, all of Asia. There are some fast-growing areas like Indonesia, Bangladesh, South America and Africa. (It is important) to make sure no country is left behind.”

 


More than two-thirds of UAE retail investors hold stocks in AI companies: eToro survey

Updated 24 min 59 sec ago
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More than two-thirds of UAE retail investors hold stocks in AI companies: eToro survey

RIYADH: More than 70 percent of retail investors in the UAE have stocks of companies developing artificial intelligence, according to a survey by trading platform eToro.

The 71 percent mark underscores a widespread understanding of AI’s potential as a catalyst for innovation and a source of competitive edge.

UAE retail investors’ interest in AI goes beyond holding stocks. When asked about their use or plans to use AI tools like ChatGPT to guide investment decisions, 39 percent reported that they already employ these technologies.

Global Markets Strategist at eToro, Ben Laidler, said: “Microsoft’s recent $1.5 billion investment in Abu Dhabi’s G42 is a big endorsement of the UAE’s potential as a global AI hub, which is reflected in the survey results showing widespread AI adoption by local investors and consumers.”

Millennials lead the charge when it comes to generational users, with 40 percent of those aged 25-44 using AI tools.

Baby Boomers and Gen X investors follow closely, with 39 percent and 38 percent, respectively.

Underlining the critical role that artificial intelligence might play in future investment strategies, an additional 52 percent of respondents, beyond those already using AI tools, said they are willing to adopt the technology to guide or adjust their portfolios in the future.

This trend defies generational stereotypes, with the older cohorts of investors directing the charge.

Baby Boomers lead in interest in integrating AI into investment planning, with 60 percent showing enthusiasm, followed by Gen X at 58 percent.

Laidler said: “AI stocks were the performance juggernauts of 2023, leading the tech sector revival and propelling the S&P 500 into bull market territory. AI trends helped make NVIDIA and Meta the best S&P 500 stock performers of last year, with their share prices tripling.”

He added: “Whilst we’re unlikely to see a repeat performance in 2024, the benefits of AI’s rapid adoption are broadening across the stock market and economy as it rapidly moves from hype to reality.”

Furthermore, eToro analyzed which companies experienced the highest proportional increase in UAE-based investors on its platform from quarter to quarter, revealing that AI stocks were the most popular theme during the first three months of the year.


Omani officials forge economic alliances with Saudi Arabia, Japan, and US

Updated 25 April 2024
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Omani officials forge economic alliances with Saudi Arabia, Japan, and US

RIYADH: Oman’s industrial infrastructure is set to receive a boost following a new agreement with Saudi Arabia, fostering private sector participation in the country’s economic growth. 

A memorandum of understanding, aimed at financing the infrastructure of several industrial zones in Oman, was signed during a meeting between Minister of Finance Sultan bin Salem Al-Habsi and Sultan Abdulrahman Al-Marshad, CEO of the Saudi Fund for Development, the Oman News Agency reported. 

Discussions centered on cooperation mechanisms between Oman and the fund, along with updates on collaborative development projects. 

The aim is to develop the industrial and logistical sectors by providing all necessary basic services, thereby encouraging the private sector to contribute to Oman’s economic development in line with Oman Vision 2040, as reported by the agency. 

This memorandum falls within the framework of cooperation between the two parties to support developmental areas in Oman. These encompass infrastructure, higher and vocational education programs, and water, along with the industry and mining sectors. Additionally, it includes transportation and communications sectors, as well as developmental projects in the energy sector. 

On another note, Ali bin Masoud Al-Sunaidi, chairman of the Public Authority for Special Economic Zones and Free Zones, met with Ken Saito, minister of economy, trade and industry of Japan, and his accompanying delegation in Tokyo. 

During the meeting, they reviewed the business cooperation between the two countries and the major projects under construction in the economic and free zones and industrial cities in Oman, notably the low-carbon iron production project in the Special Economic Zone in Duqm. 

The visit also included meetings with officials from companies engaged in iron and its derivatives production, and renewable energy equipment manufacturing companies, as well as a visit to Yokohama Port to learn about its experience in receiving ships specialized in energy and petroleum product transportation. 

Also on April 24, Oman and the US explored ways to enhance trade, investment, and address challenges comprehensively during the second strategic dialogue held in Washington. 

The Omani side was chaired by Sheikh Khalifa bin Ali bin Issa al-Harthy, undersecretary for Diplomatic Affairs, Ministry of Foreign Affairs, while the US side was chaired by Jose Fernandez, undersecretary of state for Economic Growth, Energy, and the Environment.

Both sides discussed opportunities for American companies in Oman, focusing on ICT, semiconductors, and clean energy services, expressing commitment to enhancing cooperation in clean energy solutions and mineral investments.  

They addressed environmental priorities under the Omani-American cooperation memorandum, fostering communication between researchers from both countries for clean energy research. 


Saudi NHC, Spain’s Urbas to construct almost 600 housing units in Al-Fursan suburb 

Updated 13 min 58 sec ago
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Saudi NHC, Spain’s Urbas to construct almost 600 housing units in Al-Fursan suburb 

RIYADH: Saudi Arabia’s Al-Fursan suburb will soon be home to 589 new residential units worth around SR1 billion ($266 million) thanks to a deal sealed by the National Housing Co.

Inked with Urbas Middle East Real Estate Co., a subsidiary of the Spanish Urbas Group, the agreement involves the development as well as construction of the housing units on an area spanning 150,000 sq. m, the Saudi Press Agency reported. 

This collaboration marks a significant milestone in the development of the Al-Fursan suburb. It also promises to set new standards in property development. 

“This agreement complements the efforts of the recent visit to Spain and continues to attract international investments with major companies to provide various housing products that fulfill and meet the desires of citizens,” Saudi Minister of Municipal and Rural Affairs and Housing Majid Al-Hogail said in a post on X.

“As an extension of our journey in attracting the best international experiences and expertise in the real estate development industry, I was pleased to meet the CEO of the Spanish company Urbas, which is planned to be one of the companies developing the Al-Fursan neighborhood project in Riyadh,” Al-Hogail added. 

The minister also highlighted how this step will contribute to providing innovative housing options and facilitate the exchange of experiences between Saudi and international developers.

 

Moreover, NHC has also revealed the sale of 1,300 residential units within Al-Fursan in the first quarter of 2024, generating a total value exceeding SR1.5 billion. 

This accomplishment emphasizes the firm’s keenness in creating vibrant, quality living spaces that meet and exceed the expectations of modern residents. 

Al-Fursan, known as one of the largest urban development projects in the region, is designed to align with the Kingdom’s Vision 2030. 

The suburb covers an area of 35 million sq. m. and is set to feature over 50,000 housing units, accommodating more than 250,000 residents. 

It is equipped with over 190 crucial facilities, including educational, healthcare, and recreational services, all surrounded by more than 6 million sq. m. of green spaces. This widespread greenery is part of a broader initiative to further elevate the living environment and contribute to the Saudi Green Initiative by planting over half a million trees. 

Urbas Group has experience in over 20 countries with 30,000 residential units. Urbas Middle East plans to grow in Saudi Arabia, showing its commitment to global expansion. 


IMF surcharges on borrowings exacerbate global inequities: report 

Updated 25 April 2024
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IMF surcharges on borrowings exacerbate global inequities: report 

BENGALURU: Countries, mostly middle and lower-income, have been burdened by surcharges on top of interest payments on their borrowings from the International Monetary Fund, widening global inequities, according to a report by US think tanks. 

WHY IT’S IMPORTANT 

Indebted member countries paid about $6.4 billion in surcharges between 2020-2023, the report from Boston University’s Global Development Policy Center and Columbia University’s Initiative for Policy Dialogue released on Tuesday showed. 

And the number of countries paying these surcharges has more than doubled in the last four years. 

The IMF is expected to charge an estimated $9.8 billion in surcharges in the next five years, according to an earlier report by the Center for Economic and Policy Research. 

Critics of the policy argue that surcharges do not hasten repayment and instead punish countries already struggling with liquidity constraints, increase the risk of debt distress and divert scarce resources that could be used to boost the struggling economies. 

BY THE NUMBERS 

Countries such as Ukraine, Egypt, Argentina, Barbados and Pakistan pay the most in surcharges, the report showed, accounting for 90 percent of the IMF’s surcharge revenues. 

These surcharges, levied on top of the fund’s increasingly steeper basic rate, are IMF’s single largest source of revenue, accounting for 50 percent of total revenue in 2023. 

KEY QUOTES 

“IMF surcharges are inherently pro-cyclical as they increase debt service payments when a borrowing country is most need of emergency financing," Global Development Policy Center’s Director Kevin Gallagher said. 

“Increasing surcharges and global shocks are compounding the economic pressure on vulnerable countries.” 

CONTEXT 

Data published by the Institute of International Finance earlier this year showed global debt levels hit a record of $313 trillion in 2023, while the debt-to-GDP ratio — a reading indicating a country’s ability to pay back debts — across emerging economies also scaled fresh peaks. 

IMF shareholders agreed last week on the importance of addressing challenges faced by low-income countries, Managing Director Kristalina Georgieva said on Friday.


China’s wealth fund joins with Bahrain’s Investcorp for $1bn Middle East investment

Updated 25 April 2024
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China’s wealth fund joins with Bahrain’s Investcorp for $1bn Middle East investment

RIYADH: China’s growing interest in the Middle East continues as the country’s sovereign wealth fund partnered with Bahrain’s Investcorp to establish a $1 billion investment pot. 

According to a press statement, Investcorp Golden Horizon fund will assist companies across Saudi Arabia, the wider Gulf Cooperation Council region and China. 

The reserve will be anchored by reputable institutional and private investors from the GCC, as well as China Investment Corp. 

The press statement revealed that target companies are expected to have high growth potential in sectors including consumer, health care, logistics and business services.

“During the past couple of years, we have built several bilateral funds with leading financial institutions to facilitate industrial cooperation between China and major economies in the world,” said Bin Qi, executive vice president and chief information officer at CIC. 

He added: “Currently, we are working closely with Investcorp to build a similar bilateral fund to strengthen financial and industrial ties between China and GCC countries.” 

This commitment from CIC comes when the GCC’s appeal to institutional investors is gathering pace, thanks to its stable regulatory environment and pro-business policies, driven by economic diversification efforts in the region and strategic privatization mandates. 

“This commitment by CIC, one of the world’s largest sovereign wealth funds, is a testament to Investcorp’s unparalleled franchise in the GCC and reinforces the trust placed in the firm’s global platform and teams. We are looking forward to building on this relationship and growing our partnership in the future,” said Mohammed Al-Ardhi, executive chairman of Investcorp. 

Co-CEO of Investcorp Hazem Ben-Gacem said the launch of the new fund will facilitate cross-border cooperation and investments between the GCC and China. 

Trade and economic relationships between the Middle East and China have always been strong. 

In 2023, China’s exports to Saudi Arabia and the UAE amounted to $42.86 billion and $55.68 billion respectively. 

On the other hand, the Asian giant’s imports from Saudi Arabia totaled $64.36 billion in 2023. 

In November, Saudi Arabia’s central bank, also known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion. 

SAMA, in a statement, said that the three-year agreement “has been established in the context of financial cooperation between the Saudi Central Bank and the People’s Bank of China.”

The Asian country’s central bank said that the agreement will help strengthen financial cooperation between Saudi Arabia and China, promote the use of local currencies, and strengthen trade and investments between nations.