The Future of Aviation: How Sustainable Aviation Fuels Are Poised to Reshape the Industry
In recent years, electric vehicles have brought transformative changes to the automotive industry, offering a viable alternative to traditional combustion engines. However, the aviation sector has yet to witness a comparable shift. The majority of commercial aircraft still rely heavily on petroleum-derived fuels despite ongoing experiments with biocombustibles. Aviation is a significant contributor to carbon emissions, burning approximately 380 billion liters of fuel annually and emitting about one billion tons of CO2, accounting for just over 2% of global emissions.
While the industry aims to achieve carbon neutrality by 2050, the development and implementation of sustainable aviation fuels (SAFs) remain more of a promise than a widely realized solution. However, a breakthrough may emerge from chemical innovations.
Enter Twelve, a California-based startup that has recently secured $645 million in funding and reached a valuation exceeding $1 billion. Their groundbreaking technology mimics photosynthesis through a chemical process, producing low-emission aviation fuel using atmospheric CO2 instead of petroleum. The funding round was led by TPG, a prominent private equity firm. TPG Rise Climate has committed $400 million, supplemented by $200 million from a Series C funding and an additional $45 million in financing.
The capital will be directed towards building Twelve’s inaugural synthetic fuel production facility in Washington State. According to Twelve, this plant will be the first of numerous planned factories focusing on creating E-Jet—a synthetic fuel that reportedly reduces carbon emissions by up to 90% compared to conventional fossil fuels.
The creation of these fuels involves a catalytic process where an electrolyzer breaks down carbon dioxide (CO2), generating oxygen and carbon monoxide (CO). The CO is then combined with hydrogen gas (H2) to create a synthetic gas, which undergoes another chemical reaction to become liquid fuel. In theory, this technology can produce limitless fuel quantities without petroleum. The main limitation lies in the electricity required for electrolysis. Thus, access to affordable and clean energy is crucial for scaling this technology sustainably.
Twelve is not alone in this venture. Other startups are offering similar innovations. Brookfield Asset Management, for instance, has announced a $200 million investment in Infinium, another California-based company completing its first eFuel plant in Texas. There are plans for Brookfield to further invest up to $850 million to support global construction of sustainable fuel factories.
Dubbed ‘electrofuels,’ these new-generation fuels avoid pollutants such as sulfur and offer potential applications not just in aviation but for trucks, ships, and even as green substitutes for naphtha in plastic manufacturing. In Brazil, SAF investments focus on developing biocombustibles from vegetable oils or ethanol for blending with aviation kerosene. However, commercial-scale production hasn’t started yet. A recent piece of legislation, the Combustível do Futuro Bill, aims to support SAF development by mandating that from 2027, at least 1% of aviation fuel must be sustainable, increasing to 10% by 2037.
Still, cost remains a significant hurdle. SAFs can be up to three times the price of conventional aviation kerosene. While subsidies exist in the U.S. and Europe, SAFs still represent a small fraction of the aviation fuel market. The European Union targets a 2% SAF usage by 2025, aiming for 70% by 2050. In the United States, major airlines have pledged to reach a 10% SAF use by 2030.
Efforts to incentivize research in this field are evident. In Brazil, BNDES and Finep have launched a program offering up to R$ 6 billion in financing to boost SAF development. While challenges such as production costs and infrastructure remain, ongoing investments and technological advances in sustainable aviation fuels pave a hopeful path toward a greener, more environmentally conscious future in aviation.
