Building the Technology Foundation for Sustainable Aviation Fuel

The aviation sector is responsible for 2% of global CO2 emissions. Among the set of measures to reduce emissions — such as new aircraft technologies and operational efficiencies — Sustainable Aviation Fuel (SAF) could be the most impactful intervention. Blending SAF into traditional jet fuel (and eventually replacing traditional jet fuel entirely) could contribute up to 65% of the emission reductions required for air travel to reach net zero. As such, SAF could be the single most important initiative related to aviation decarbonization.

The increasing demand for SAF is being driven by both regulatory mandates and voluntary initiatives. Products that include SAF are becoming more commercially attractive to energy companies that supply jet fuel, and technological advances related to both raw materials and production efficiencies are making SAF incrementally more viable. RefuelEU, the relevant mandate covering EU countries, has set a target for SAF to make up 2% of aviation fuel consumption in 2025, with the SAF rate rising to 70% by 2050. Such mandates, along with voluntary purchases (fixed volume, percentage, or bulk) are challenging fuel suppliers to incorporate SAF into their mainstream jet fuel supply chains.

However, bringing SAF products to market is more complicated than it might at first seem. Blending SAF into jet fuel products requires changes in business processes, physical infrastructure, and IT systems to both support physical delivery and maintain full traceability of SAF molecules in the fuel value chain for regulatory compliance purposes. A fully integrated supply chain for both SAF and jet fuel will need to support both “segregated” and “commingled” delivery methods, enable “book and claim” transactions, and precisely track SAF concentrations and production methods from initial production all the way to consumption.

To address these challenges, Wipro has been working with market leaders in the jet fuel sector to build new capabilities for SAF enablement. Based on these experiences and engagements, we are increasingly focused on a specific set of process and certification imperatives (see Figure 1).

As evident from the above table, SAF presents unique challenges to a jet fuel business looking to transact in SAF. The two distinct fuels have different requirements at each stage of the value chain, from forecasting and planning through production, procurement, and fulfilment. Certifying and tracing SAF concentrations in the value chain add a fundamentally new dimension for jet fuel businesses. Given the role SAF plays in energy transition mandates, these unique requirements will continue to evolve as compliance and regulatory frameworks on net zero mature.

Our Approach to SAF Enablement: A New Energy Product Framework

SAF is just one aspect of larger energy transition. As we build pathways for that energy transition, our core principle is to acknowledge the ongoing co-existence of hydrocarbon and new energy products during a lengthy transitional period. As such, leveraging existing hydrocarbon-based business and technology capabilities to introduce new energy products is at the heart of our approach.

Any successful introduction of a new energy product such as SAF will rest on three pillars: thoughtful value chain design, a modular platform to support the product, and an ongoing strategy for operationalizing and optimizing product delivery. Here is how these three pillars will impact the SAF go-to-market journey:

• Value Chain Design: New energy products will require a value chain design that caters equally to traditional and new products, while at the same time addressing the differences between hydrocarbon products and new energy products. Suppliers will need to consider each deviation and convergence point in the larger value chain.

As the figure above illustrates, ERP systems would require modifications to both accommodate the SAF-related pricing differences and precisely track SAF volumes blended into conventional jet fuel. SAF volumes may need to be tracked outside of legacy ERP software, via customised platforms such as PowerBI. Further, retailing SAF to both meet voluntary demand and supply mandated markets requires a thorough and automated certificate repository to track sustainability documents such as Proof of Sustainability (PoS) and Mandate Declaration Documents (MDD) across the supply chain, enabling certificate generation at each handover/tax point (see figure below).

• Modular Platform Design: After a layered value chain has been designed, suppliers will need to support that value chain with an AI-driven technology platform. As they build this new platform, suppliers should exercise a strong preference for leveraging existing applications and systems. Development will require both re-platforming legacy systems and introducing new systems and capabilities, most often in a hybrid cloud environment. For SAF transactions, the new systems will typically address certification and tracking of SAF for the purpose of audits, credits, and compliance.
• Operate and Optimize: The platform should be introduced to users through a business-aligned change management approach. Constant monitoring of the platform will be needed to address process deviations and improve workflows. AI-enabled technologies can conduct RCA and optimize the platform.

The approach above enables clients to transact renewable energy fuels including SAF. By leveraging existing technologies and systems, then modernizing and adding new capabilities, CapEx investments are kept low and change management can drive adoption. The approach creates an architecture that builds the core and creates possibilities for new use cases when new products are introduced.

Particularly for energy suppliers currently selling jet fuel in places like the EU, incorporating SAF into the supply chain will not be voluntary; it will be a prerequisite for doing business. But manufacturing or procuring SAF is only the first step in a complex process. To build viable business solutions around SAF, energy suppliers will need to carefully construct value chains and platforms that will result in a profitable, resilient, and compliant SAF infrastructure.

About the Authors

Manu Sharma
Consulting Partner, Energy Consulting

With more than 25 years of experience, Manu consults with clients on the energy transition, new product introduction, and customer-centric transformation initiatives. His special interests are energy transition pathways, sustainable fuels, industry diversification, and the development of AI-centric technology platforms to enable the energy transition.

Dinakar Ayalasomayajula
Global Business Manager, Energy Consulting

Dinakar is a consultant and a former automotive engineer with a decade of experience across the energy, aviation, and automobile industries. An alumnus of HEC Paris and IFP School, he specializes in energy transition issues, sustainability, and low-carbon energy solutions. He has driven solutions that advance strategic capabilities in complex regulatory landscapes to generate value and improve energy efficiency.

Sudhansu Sekhar Choudhury
Senior Partner, Energy Consulting

Sudhansu is a senior consulting partner in the energy domain with over 24 years experience in core energy industry and IT domain consulting. He drives solutions and services for global energy clients and focuses on building capability at scale, orchestrating new age solutions, developing thought leadership, and driving customer-centric transformation across hydrocarbon product supply chain, customer and mobility, and new energy. He has helped energy enterprises advance new business capabilities and deliver business solutions and transformation initiatives within their downstream and new energy businesses.