ICCT paper on tankering and SAFs

19 May 2021: The International Council on Clean Transportation (ICCT) has published a working paper on the 'Potential tankering under an EU sustainable aviation fuels mandate'. It analyses the potential for tankering to undermine the environmental objectives of an EU SAF mandate, which is currently being prepared by the European Commission under the ReFuel EU initiative.

Under one option of the ReFuel EU initiative, the obligation would fall on fuel providers who would be obliged to provide fuel at certain airports and airlines would be indirectly regulated to purchase SAF blends, which are more expensive than conventional jet fuel. A lack of obligation on the airlines to purchase SAF would allow airlines to purchase fuels at other airports where prices are lower (for example in neighbouring countries without equivalent SAF mandates). This practice is called tankering, which occurs when airlines uplift additional cheap jet fuel at airports in order to avoid purchasing more expensive fuels elsewhere. This practice allows airlines to save money, however, it increases fuel use and emissions.

According to a study, tankering saves circa €265m annually on flights within the ECAC region, generating an additional 900,000 tonnes of CO2 emissions per year, given that the practice increases the take-off mass of the plane.

Results

The paper does not expect tankering on domestic or intra-EU flights due to the price assumptions used. Tankering should be minimal in 2025 but could increase significantly as SAF share in blends increases. By 2035 tankering could reduce SAF sales by 22 per cent at EU airports and increase the fuel use by 0.9 per cent, in particular if neighbouring countries do not adopt a SAF mandate. The paper finds that most of the tinkering will occur from the United Kingdom (52 per cent of the tankered flights in 2030), followed by Switzerland, Turkey and Russia.

Most of the tankering takes place on short-haul flights (900-1,700 km in 2030) as savings from purchasing cheaper fuel at one airport becomes offset as stage length increases. These flights would link states within the EU27 to neighbouring countries like the United Kingdom, Northern Africa or Eastern Europe. For long-haul flights it would not be economical to tanker due to the large fuel penalty.

Solutions

The paper suggests that eliminating tankering from neighbouring countries would increase SAF volumes available at EU airports and, therefore, safeguard the integrity of the SAF mandates in Europe. For example, eliminating tankered flights from the United Kingdom would increase SAF sales by circa 20 per cent in 2030.

This will be possible with measures that reduce the incentive to tanker:

• by requiring all carriers operating at EU airports to purchase SAF;
• by prohibiting the carriage of excess fuel;
• by having neighbouring countries adopt a SAF mandate.