Investment in eco-friendly aviation fuel made by Dutch retirement firm
In a significant move towards a greener aviation future, Dutch pension fund ABP has committed €250 million to SkyNRG, a company dedicated to developing and scaling up the adoption of sustainable aviation fuels (SAF) globally. This investment, ABP's first in the SAF sector, is part of a €300 million funding round for SkyNRG.
The investment aligns with ABP's ambition to create impact by investing in energy transition assets. This strategic move is expected to support the construction of SAF production facilities in Delfzijl, the Netherlands, Sweden (Project SkyKraft), and the United States (Project Wigeon).
Over the past two years, large institutional investors including Macquarie and IFM have made their first commitments to scaling up the development of greener alternatives to conventional aviation fuels. Notably, infrastructure manager Macquarie Asset Management (MAM) has increased its overall investment in SkyNRG from €175 million in 2023 to €225 million.
PGGM, another Dutch pension fund, has also shown support for SAF, committing €120 million to French SAF firm Elyse Energy.
Beyond APG and PGGM, major investors in SAF include Neste, a company known for its significant SAF production capabilities. Neste has expanded its production and is involved in large-scale SAF supply agreements, such as with DHL Express.
Fuels Europe, a coalition calling for increased policy support for SAF in Europe, represents a broader group of fuel suppliers investing in the transition to sustainable fuels. Hydrogen Europe, another coalition advocating for policy support, focuses on hydrogen-based solutions, which could play a role in future SAF developments.
Governments also offer significant support through policies like tax credits. For instance, the US Section 45Z tax credit is crucial for SAF producers, providing up to $1.75 per gallon based on lifecycle carbon intensity. Similarly, the European Commission's upcoming Sustainable Transport Investment Plan is expected to influence investments in SAF.
The aviation sector is supported by a range of participants, including airlines that invest in SAF, industry associations like IATA, and financial institutions backing sustainable infrastructure projects. However, detailed lists of investors beyond APG and PGGM are not readily available in the current search results. Typically, entities like venture capital firms, private equity investors, and government-backed funds also play significant roles in supporting SAF development.
This investment underscores ABP's commitment to supporting innovative solutions that drive the decarbonisation of the infrastructure industry. As more investors join the fray, the future of sustainable aviation fuels looks promising.
- ABP's investment in SkyNRG falls under the pension fund's ambition to create impact by investing in energy transition assets, specifically sustainable aviation fuels (SAF), which align with their goal of driving decarbonization in the infrastructure industry.
- The investment by major players like ABP and PGGM, along with other large institutional investors such as Macquarie and IFM, underscores a growing interest in scaling up the development of greener alternatives to conventional aviation fuels, demonstrating a strategic move towards a greener aviation future.
