A consortium led by Abu Dhabi’s clean energy company Masdar plans to produce sustainable aviation fuel (SAF) from methanol.
The consortium, which also includes France’s TotalEnergies and Siemens Energy, is currently focused on SAF from green hydrogen, but is “actively working” with licensors to certify a new production pathway for aviation fuel from methanol, the companies said in a statement on Wednesday.
Methanol, primarily used to produce chemicals such as acetic acid and formaldehyde, is also a clean-burning fuel that produces fewer smog-causing emissions.
SAF, considered by the aviation industry as the most significant contributor to reaching the net zero goal, requires a major boost in production from the current minuscule levels.
In 2021, airlines globally pledged net-zero carbon emissions from their operations by 2050 — bringing the air transport industry in line with the objectives of the 2015 Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.
Airlines are facing pressure from environmental groups to lower their carbon footprint and make operations greener after the Covid-19 pandemic.
Last week, Masdar, Siemens Energy and TotalEnergies signed an agreement to develop a demonstrator plant project in Masdar City.
“The demonstrator plant will help to establish the commercial viability of green hydrogen as an essential decarbonised fuel of the future and will support Abu Dhabi’s development as a green hydrogen hub,” Mohamed Al Ramahi, chief executive of Masdar, said in an earlier statement.
“While the hydrogen market is still at a comparatively early stage, we firmly believe that by working together with international partners on projects such as this, we can help the hydrogen market develop its full potential and it will really take off in the years to come.”
The global aviation industry could use 15 per cent to 20 per cent of the world's projected hydrogen supply of 600 million tonnes by 2050 for the production of SAFs and to power new aircraft, according to airline trade association the International Air Transport Association.
Aviation is projected to use about 100 megatonnes — 100 million tonnes — of hydrogen for the production of SAF and 20 megatonnes for hydrogen-powered aircraft, if they enter into service by 2035.
Last year, Etihad Airways operated a net-zero emissions flight from Dulles International Airport in Washington to Abu Dhabi, via the Egyptian Red Sea resort of Sharm El Sheikh, to carry delegates to Egypt's Cop27 climate change conference.
It joined up with net-zero services provider World Energy to operate the flight powered entirely by SAF through a book-and-claim system.
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Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
