Lufthansa Group and chemical solutions company HCS Group announced today a new agreement for the production and supply of sustainable aviation fuel (SAF) beginning in 2026, from a planned new 60,000 metric tonne per year biogenic SAF facility.

The companies have signed a Letter of Intent (LoI) for the HCS Group to supply Lufthansa with SAF produced using Alcohol -to-Jet (AtJ) technology, which converts alcohols derived from residues from agriculture and forestry into an alternative jet fuel blendstock.

The SAF will be produced at the Haltermann Carless site in Speyer, Germany, with initial production volume estimated at 60,000 metric tons per year, anticipated to be the first large-scale producer of biogenic SAF in Germany.

Sustainable aviation fuel is seen as one of the key tools to help decarbonize the aviation industry, which currently accounts for 2-3% of global greenhouse gas (GHG) emissions.

Demand for SAF is likely to rise dramatically over the next few years, as airlines turn to the technology as one of the key solutions to hit their climate goals, and as governments begin to mandate increased SAF use to achieve their own decarbonization ambitions. In May, for example, lawmakers at the European Parliament and EU Council announced an agreement on new rules requiring a minimum SAF share of fuel at EU airports, rising to 70% by 2050.

According to Lufthansa, the agreement underpins its goals to drive the market and ramp use of sustainable aviation fuels. The company has set a target to achieve a neutral CO2 balance by 2050, and an ambition to halve its net CO2 emissions by 2030, compared to 2019. Lufthansa Group is one of the largest SAF customers globally, and the company said that it expects to invest up to $250 million in SAF procurement over the coming years.