According to the company’s website news release on February 2, 2023, VARO Energy (“VARO”) and Deutsche Lufthansa AG (“Lufthansa Group”) signed a Memorandum of Understanding (“MoU”) to explore the production and supply of Sustainable Aviation Fuel (“SAF”).
- MoU will deepen existing partnership through potential agreement for VARO to sell SAF volumes to Lufthansa Group from as early as 2026
- SAF is a key element in the ONE VARO Transformation strategy, helping customers in hard to abate sectors like aviation decarbonize
- Companies will also jointly investigate the use of non-edible biogenic feedstock to produce green hydrogen to be potentially used at a later stage for SAF production
In July 2022 VARO announced its new strategy centred on two engines. Engine 1 is focused on VARO’s Conventional Energies business, generating high levels of cash flow to reinvest into Engine 2, focused on Sustainable Energies. Engine 2 consists of five strategic growth pillars targeting the most attractive low carbon growth markets in Europe: Biofuels; Biomethane & BioLNG; Hydrogen; E-mobility; Carbon Removals.
Providing solutions to decarbonize the aviation industry is a central element to VARO’s customer focused strategy. Today’s announcement of an MoU with the Lufthansa Group for the production and supply of Sustainable Aviation Fuel marks an important step in meeting these customer needs and is a core element in VARO’s Biofuels strategic growth pillar. VARO is targeting Biofuel production of more than 260,000 tonnes per year by 2026 with a long-term target of more than 500,000 tonnes per year.
The MoU will see VARO and the Lufthansa Group leverage their long-standing partnership to drive forward the market and grow the use of Sustainable Aviation Fuels. Lufthansa could offtake large volumes of SAF from VARO as early as 2026. Both companies intend to scale innovative processes such as the production of hydrogen from biogenic feedstock, such as sewage sludge, and to classify it as green hydrogen in Germany. This green hydrogen could then be used to produce e-SAF.
The MoU also builds on the Lufthansa Group’s ambition to drive the availability, market ramp-up and use of SAF as a core element of its sustainability strategy. The Lufthansa Group is already one of the largest customers of SAF in Europe and is enabling their corporate customers to report their CO2 emission reductions by an audited certificate.
Katja Kleffmann, Head of Fuel Management Supply Lufthansa Group, commented: “We believe in SAF being a powerful tool to make aviation more climate friendly. Therefore, we are engaged in the development of SAF markets and making SAF logistically available at airports. We are looking forward to our continued cooperation with VARO, which supports our sustainability strategy."
Dev Sanyal, CEO of VARO Energy, said: “Our ONE VARO Transformation strategy is centred on meeting the need of our customers to decarbonize as they progress in the Energy Transition while ensuring reliability of supply. This MoU builds on our long-standing partnership with the Lufthansa Group, one of the world’s largest airline Groups, and I am excited to be working with them to accelerate the development and use of Sustainable Aviation Fuels – a key element of our Biofuels strategic growth pillar.”
Notes to editors:
Sustainable Aviation Fuel (SAF) is the generic term for all aviation fuels that are produced without the use of fossil energy sources. The current SAF is mainly produced from non-edible biogenic feedstock. As a drop-in solution compatible with existing aircraft fleet and airport infrastructure, SAF can be blended with conventional jet fuel at a ratio of up to 50% with the result of creating an aviation fuel that is significantly lower in lifecycle carbon emissions.
In its pure form, SAF from biogenic residues can reduce lifecycle emissions by up to 80% compared to conventional fuel, making it a vital solution for decarbonising aviation.
VARO Media Relations
Florence Lebeau
Phone: +41 79 546 66 31
