Microsoft has become the first corporate customer to pilot a book-and-claim scheme that verifies the authenticity of sustainable aviation fuel production and ensures the attendant carbon saving can only be claimed once.
The scheme has been developed by the non-governmental organisation Roundtable on Sustainable Biomaterials. RSB is working in partnership with, among others, the recently formed Sustainable Aviation Buyers Alliance, of which Microsoft is a member. The pilot will allow Microsoft to claim exclusively the emissions reductions on 26,500 litres of waste-based SAF delivered by air BP (oil giant BP’s aviation subsidiary) to United Airlines at UK airports.
Microsoft was the first corporate buyer to agree a multinational purchase of SAF when it signed a deal with KLM and joint-venture partner Delta Air Lines in October 2019 for flights between the USA and Netherlands. 2021 has seen the announcement of many more agreements between airlines and corporate clients or travel management companies, but with no standardised verification of the true environmental gains. Put another way, it’s difficult to assess just how sustainable SAF truly is.
“I do see some areas of the industry trying to propose sustainable aviation fuel as the answer to all things and an easy solution when it is a complex space that requires at least some learning and understanding,” said Julia Fidler, senior sustainability manager for procurement for Microsoft.
“I was given guidance by our carbon removal team about the importance as we introduce a solution of making sure it meets certain criteria and that ultimately we need to be able to make an exclusive claim on the environmental impact our purchase has had. That mechanism doesn’t exist today [for SAF].”
It is often trumpeted that greenhouse gas emissions from SAF are up to 80 per cent lower than from fossil fuel, but there are several challenges to corporate buyers safely claiming this, or indeed any, level of saving.
The first difficulty the RSB scheme seeks to address is that it audits SAF sources. For example, said Fidler, who was part of Microsoft’s travel team for 12 years before assuming her current role, “RSB provides verification of feedstock. It looks down even to where the farm residue was produced and will certify and verify the quality of the feedstock.”
Among many other questions to ask about SAF provenance are whether fuel designated as waste oil was previously used for other purposes, the emissions resulting from transporting the fuel, where and how it was grown, and with what incentives. For ethanol made from corn, a key question is whether it displaced crops grown for food.
“You want to be sure that the claim you are making to the market is backed by real environmental integrity,” said Arianna Baldo, aviation sector lead for RSB. “SAF needs to prove it is environmentally and socially sustainable and that it achieves significant emission reduction because this is not automatic. You can have fossil fuels that are more efficient in terms of greenhouse gas emissions than biofuels.”
Fidler believes the new book-and-claim system has the potential to remove much of the fuel source verification that corporate clients would otherwise have to undertake themselves. “The implications start to become so complex,” she said. “Not all buyers have to understand that, but I think early buyers should help establish platforms that make it easier for other buyers to be sure of quality and avoidance of risk.”
Even when SAF has been verified as sustainable, the vexed question arises of who claims the savings it produces. “Carbon accounting is complex,” said Fidler, “but ultimately there should only ever be one claim that you reduced carbon from the environment.”
There are three different ways in which the same SAF savings could be double-counted illegitimately. The first would be both an airline claiming the saving as a Scope 1 (direct) emission reduction, while a corporate customers claims it as reduction of a Scope 3 (indirect) emission, of which business travel is one kind.
The next potential conflict is that a country (for example the country where a biofuel is produced) banks the saving as part of its Nationally Determined Contribution at the same time a corporation claims it. This is not allowable.
Finally, there is the risk of the same saving being sold to two or more corporate customers. “I would say that is slightly less significant a risk today because such small amounts of SAF are being purchased, but as it scales those are the types of risks that need to be officially addressed,” said Fidler.
The RSB-led pilot scheme creates a ledger in which all SAF savings claims can be recorded and verified. “These claims do not belong to the physical supply chain, but they are detached and transferred to a customer that does not physically take and burn the fuel,” said Baldo. “Microsoft doesn’t buy SAF and burn it in its own planes. A book-and-claim system is where a product can be booked somewhere and claimed somewhere else.
“There is still some work to do, which is why we are piloting the standard. It’s not a product that’s available yet in the public domain for widespread adoption. The pilot stage will probably last for the greater part of next year. We need to receive more feedback from stakeholders and then test the assumptions in more pilots,” Baldo said.
Both Baldo and Fidler urged more buyers to get involved. Fidler is “very optimistic” that an accurate, meaningful process can be created. “If we continue to get the right people together to collaborate on this and corporates continue to be in the room and support this challenging phase, then I feel we will get to it,” she said.
“In future it will be a fully accountable claim against our Scope 3 emissions. Today that is not accepted by the likes of Greenhouse Gas Protocol [a widely used set of GHG accounting standards]. Until we have a fully credible, traceable way to account for the purchase, it’s what is described as a line item. It’s a nice-to-have: a good thing that we’re doing but it’s not a full reduction on our Scope 3 emissions yet. We’re getting closer to that,” said Fidler.