🇮🇸 Icelandair signs a memorandum of understanding with IdunnH2 on the offtake of sustainable aviation fuel to reduce carbon emissions by up to 10%

March 4, 2023

Press release from Icelandair

Icelandair and IdunnH2 entered into a memorandum of understanding (MoU) today regarding the offtake of up to 45,000 tonnes of sustainable aviation fuel from 2028 and onwards which would account for around 10% annual reduction of carbon emissions from Icelandair´s international network. IdunnH2 will produce this carbon-neutral e-fuel at its site near Keflavík International Airport, which will be blended with conventional jet fuel and can be used on the current fleet for certifiable emission reductions.

Icelandair has set ambitious targets to reduce carbon emissions by 50% per operational ton kilometer (OTK) by 2030 compared to 2019 and reach net zero emissions by 2050. Icelandair has already made progress towards achieving these goals, especially with the implementation of the Boeing 737 MAX that are of a new generation of more fuel-efficient and therefore more environmentally friendly aircraft. A combination of further measures is required to reach the carbon reduction targets and the implementation of sustainable aviation fuels (SAF) is key to this development.

Sustainable aviation fuel is an umbrella term for several categories of low carbon, drop-in fuels that can be blended with conventional jet fuel. Most sustainable aviation fuel today comes from bio-based resources, but the synthetic types, e-fuels, are produced from green hydrogen and recycled CO2, which is the method that IdunnH2 aims to utilize. By recycling CO2, its amount in the atmosphere remains the same but does not increase as is the case when burning fossil fuels.

Iceland is an ideal location for the commercial scale production of e-fuels, as the island’s power grid is both competitively priced and renewable. The 300MW facility will allow for meaningful reductions in emissions and bring Iceland closer to reaching its climate goals.

Bogi Nils Bogason, CEO of Icelandair:

„Entering into this memorandum of understanding, shows that we want to pull our weight to support pioneers that are working on the development of sustainable aviation fuels in Iceland. We at Icelandair have set ambitious goals to reduce carbon emissions and have already invested significantly in fleet renewal which is currently the most effective measure to reduce emissions. It is however going to be the utilization of sustainable aviation fuels that will play an important role on this journey in international aviation over the next years. The challenge is that there is not enough production in the world today and therefore not enough supply. We believe there are great opportunities for Iceland to start such production.”

Audur Baldvinsdottir, CEO of Idunn H2:

“We are pleased to have Icelandair join us in supporting the domestic production of sustainable aviation fuel. Our project in Helguvík Harbour will lead to verifiable emissions reductions, added energy security, and supports the local economy. We’ve worked diligently on bringing the relevant stakeholders to the table to establish the benefits of having such a facility in Iceland, and we are pleased that our largest carrier is prepared to step up and support our development plan. Taking bold steps now is imperative to reach Iceland’s goals for carbon neutrality by 2040, and IdunnH2 wants to harness Icelandic ingenuity to meet those goals and shift our long-term position as an importer of fuel. This memorandum of understanding is an important step toward realizing that vision.”

Originally published on 2 March.

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