Repsol, IAG sign Spain's biggest SAF purchase, eye lower prices

International Airlines Group and Spanish energy company Repsol have agreed Spain's largest sustainable aviation fuel (SAF) purchase deal to date, calling for greater government support to secure lower prices for the fuel.

The deal is for the purchase and supply during the next six months of more than 28,000 mt of SAF, Repsol said in a statement July 29. The company was not available to say if the deal will be repeated or to provide further details.

The SAF provided by Repsol will be used by the IAG airlines, including Aer Lingus, British Airways, Iberia, Iberia Express and Vueling, flying from Spanish airports.

"We are working intensely to secure our future SAF needs and comply with our commitments, which are more ambitious than what is established by EU legislation," Luis Gallego, CEO of IAG, said in the statement. "However, it is important that governments continue to support the development of a SAF industry that increases its availability and reduces its price," he added.

Platts, part of S&P Global Commodity Insights, assessed SAF on a CIF basis at Amsterdam-Rotterdam-Antwerp at a $1,379.25/mt premium to conventional jet cargoes in Northwest Europe July 26, making the SAF price 175% higher than the fossil fuel price.

Repsol began to produce 100% renewable fuels in 2024 at its facilities in Cartagena. The plant, the first large-scale plant in Spain and Portugal dedicated exclusively to the production of 100% renewable fuels and in which Repsol has invested Eur250 million, has a production capacity of 250,000 mt/year and can produce renewable diesel and SAF from waste.

Under the European Union's ReFuel initiative, SAF must make up at least 2% of aviation fuel in the EU by 2025, 6% by 2035, rising to 70% by 2050.

According to data from S&P Global Commodity Insights, SAF will account for 0.61% of global aviation fuel consumption in 2024, compared with 0.31% in 2023. This is seen rising to 3.24% in 2030 and 24.06% in 2050, when the total volume will be 2.2 million b/d, compared with 20,000 b/d in 2023.

The biofuels industry is struggling at present, with a string of projects paused in Europe, amid concerns about the economics of the sector.