Cebu Pacific expects ‘green’ fuel cost to drop as suppliers scale up
By Ashley Erika O. Jose, Reporter
DEMAND for sustainable aviation fuel (SAF) is expected to grow in the coming years as it becomes cheaper when fuel companies scale up production, a Cebu Pacific Air official said.
Alex B. Reyes, chief strategy officer of Cebu Pacific, said the industry remains positive about adopting SAF, though prices remain high for the time being with SAF production still low.
“As more investment goes in… as you put technology behind it, you scale up, prices will go down over time,” Mr. Reyes told reporters on the sidelines of the 2023 Aviation Summit in Pasay City.
SAF can help reduce emissions from air transportation and is made from non-petroleum feedstock like agricultural waste and used vegetable oil.
“We are seeing high prices today because actual production is tiny and most of the plants built are small scale, eventually it will come down, overtime. It takes you three to five years to build an SAF plant… it will take a while before (the additional scale is) will be reflected in pricing,” he added.
The Department of Energy (DoE) has said it hopes to draft regulations on SAF to accelerate industry adoption.
“These are steps in the right direction. We want more, ideally a lot more engagement from the DoE, from all of the stakeholders. It is a very complicated supply chain,” he added.
The airline’s short-term target is to incorporate more SAF in regular operations, Mr. Reyes said, adding that for this year almost all of the company’s flights have been fueled with a blend of SAF.
He said that the airline will not set a specific target for SAF blends to hit by a certain year.
“We have seen other airlines doing so, but our circumstances in the Philippines are different. SAF industries are more developed in the US and Europe. In the Philippines there are no plants producing SAF,” Mr. Reyes said.
Instead of setting a minimum SAF blend like most countries do, Mr. Reyes proposed that the government offer incentives to encourage airlines to use more SAF.
“Our view is, let’s develop all of the policies and incentives to make sure that there is a response from the market rather than mandate it, it should really come from the producers. There is nothing like the profit incentive to drive that kind of growth and investments,” Mr. Reyes said.
