Representatives of Shell International Petroleum 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.

Unlike most SAF supply arrangements in which 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.

Chief executive William Todts insisted: “We can have transport and the environment. The problem is not transport, it’s pollution.”

He argued: “The problem with aviation is the size of emissions and that we don’t have the regulations or tools to bring them down. As emissions in the rest of the economy go down, aviation’s share is going to go up and up. That is what makes environmentalists, regulators and governments nervous.”

Appearing on a webinar hosted by European air traffic management body Eurocontrol, Todts agreed “there is too much flying”.

But he said: “You can say the same about driving and ordering stuff on Amazon. As long as we haven’t got rid of the carbon emissions in these products and processes, we consume too much.”

Asked if he supports a tax on flying, Todts said: “In principle, a frequent flier tax is a good idea. If you fly a lot, you or your company should pay a bit more and that can be used to help clean up the sector.

“It is rich people who fly most. It’s possible for these people to pay a bit more.”

But he added: “People seem to think if we have a tax on short-haul flights, we’ve solved the problem. That is false. This is a long-haul problem. Eurocontrol data shows how big a problem long-haul flights are.”

European air traffic management body Eurocontrol reported last year that the 6% of flights over 4,000km create 52% of airlines’ CO2 emissions.

Todts noted pressure to decarbonise from major companies, saying: “We’ve seen with the pandemic that we can do business without getting on a plane all the time.

“Companies are going to be obliged to report on their carbon emissions and, for a lot of companies, flights are a significant share of their emissions. There is a going to be a lot of pressure to cut back.

“Business travel is not going to return to what it was in 2019.”

He added: “These corporations are big buyers. They have clout with the airlines. That is why Air France and Lufthansa are getting more serious about sustainability. Their corporate customers are demanding it. If I was the airlines, I would be worried.

“Some people in aviation think sustainability is going to go away. It’s not, it’s only going to become bigger.”