Shell sees aviation fuel demand for 2024 recovering to pre-pandemic levels

Shell sees aviation fuel demand for 2024 recovering to pre-pandemic levels


By Isabel Coa and Florence Tan

SINGAPORE (Reuters) – Global demand for jet fuel is expected to fully recover to pre-pandemic levels of 300 million tons annually in the next year or two, the head of Shell’s aviation division (LON) said on Tuesday.

Demand in the United States has returned to its 2019 levels, while Europe’s consumption has recovered to more than 80%, and is on track for a full recovery next year, Jan Tochka, President of Shell Aviation, told Reuters on the sidelines of the 38th Asia Pacific Petroleum Conference. . APPEC).

โ€œAsia has been a bit of a bumpy road with markets opening and closing, but mostly we expect Asia in particular, next year, but it could be another year before we see the full potential of the market,โ€ he said.

However, jet fuel supplies in Europe are shrinking as EU sanctions on Russian oil products kick in on February 5, prompting the region to import more fuel from the United States, China, India and the Middle East.

“The market needs to buy from remote refineries… Shipping, railways, all kinds of distribution are under more pressure now with this new type of (trade) routing,” Tochka said.

sustainable aviation fuel

Tochka said Shell is considering building more sustainable jet fuel (SAF) plants in the United States, as it aims for renewable fuels to account for 10% of its global aircraft sales by 2030.

One of the projects will use the traditional hydrotreated esters and fatty acid (HEFA) technology while Shell hopes to leverage the latest technology for a second time.

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“There are limits to producing HEFA-based products…we need to consider cellulosic materials, jet alcohols, and less restrictive feedstocks,” he said.

He said Shell may also make a final investment decision for its Singapore plant by the end of 2022 or early 2023, which is expected to come online in 2026 with production of up to half a million tons of SAF in the city state.

Meanwhile, the biofuel plant in Rotterdam is expected to start production in 2024 or 2025, says Tochka.

“We will have more than two million tons of SAF annually by 2030,” he added.

He added that SAFs from airlines and other sectors such as technology firms, accounting firms and banks, are gradually growing as companies seek to reduce carbon emissions, but still represent a relatively small percentage of the total jet fuel market.

Philippines’ Cebu Pacific signed a memorandum of understanding with Shell on Tuesday, which will supply the low-cost carrier with 25,000 tons of SAF annually for five years starting in 2026. The airline said this is part of its long-term plan to achieve net zero emissions by 2050.

Aviation, which accounts for 3% of the world’s carbon emissions, is one of the most difficult forms of transportation to decarbonise.

To achieve net-zero targets by 2050, Tochka said, the industry will have to spend $50 billion annually and build 5,000 SAF plants.

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