Airlines Must Ink Long-term Deals on Greener Fuels to Boost Volumes: Bayer Exec

MONTREAL, June 3 (Reuters) - Airlines need to reach long-term agreements to buy bigger quantities of sustainable aviation fuel if they want to boost global volumes of the lower-emission fuel required for industry climate targets, a Bayer executive said on Tuesday.

Airline members of the International Air Transport Association are sticking to a target of net zero emissions by 2050 despite warnings that carriers will struggle to meet such sustainability goals due to low production of SAF, which is more expensive than conventional jet fuel.

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IATA, which wrapped up a summit in India on Tuesday, expects the amount of sustainable aviation fuel produced to double in 2025 to reach 2 million tonnes, representing 0.7% of airlines' fuel consumption.

While airlines have called for greater action by energy companies and other partners to boost SAF volumes, Matthias Berninger, a Bayer executive vice president and sustainability head, said in Montreal there needs to be more long-term purchases of the fuel, similar to some commitments in the renewable energy sector.

Bayer, which acquired Monsanto in 2018, said its crop science unit sells seeds and pesticides to farmers who produce crops for biomass-based feedstocks used to develop biofuels.

“If they (airlines) commit to buy a certain amount over a certain period of time, we can guarantee that farmers will grow it and processors will process it,” Berninger told Reuters on the sidelines of the International Civil Aviation Organization's aviation climate week.

"And the question whether or not that supply meets the market (demand) depends on long-term purchasing contracts of the airline industry sending a very clear demand signal comparable to what we have in the renewable space."

SAF can be produced from plants, used cooking oil or wastes, among other products. ICAO's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), seeks to cap emissions from international flights at 85% of 2019 levels.