Shell to study large-scale SAF supply to Lufthansa

Oil giant Shell Plc (LON:SHEL) has agreed to explore the supply of up to 1.8 million metric tonnes of sustainable aviation fuel (SAF) to Deutsche Lufthansa AG (ETR:LHA) at airports across the globe.

The two companies have signed a non-binding memorandum of understanding (MoU) and are considering starting talks on a definitive agreement, Shell said on Monday.

Under the plan, Shell would produce the sustainable fuel using up to four different approved technology pathways and a broad range of sustainable feedstocks. The SAF should be delivered to the German airline in the period between 2024 and 2030.

"It is encouraging to see large flagship carriers coming to us to discuss SAF supply deals, knowing there will be a lot of things to be defined and determined at a later stage, including established price markers," said Shell Aviation's president Jan Toschka.

"The potential SAF purchase agreement contemplated under the MoU, by its anticipated volume size, term period and geographic scope, is expected to be a milestone if concluded and shows the way forward for decarbonisation in the aviation industry," Toschka added.

If agreed, a definitive deal will support Shell’s plan to have at least 10% of its global aviation fuel sales as SAF by 2030 and Lufthansa’s ambition to promote the market ramp-up and the use of SAF.

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