Macquarie pumps $290m into green aviation fuel

afr.com:

London | Macquarie has made its first foray into the green aviation fuel sector, tipping €175 million ($290 million) into Netherlands-based SkyNRG to help it build production facilities in Europe and the US.

Macquarie Asset Management has been on the hunt for an investment in the sustainable aviation fuel (SAF) sector for more than two years, as airlines begin scrambling en masse for green fuels to meet voluntary or mandatory emissions-cutting targets.

KLM is one of the key offtake partners green jet fuel maker SkyNRG. iStock

But MAM’s global head of green investments, Mark Dooley, said scouring for an investment in the SAF industry had been tricky because the world’s oil and gas majors held the best cards.

“Big oil and gas have some natural advantages there, and over time will inevitably be leaders – those advantages being just the comfort with molecules, the logistics to deal with, store and transport molecules, and the distribution chains and the client base,” Mr Dooley said.

“But we also thought that if we could find the right player, this stuff still needed to be pioneered. And that requires a certain amount of single-minded focus and nimbleness.”

The 14-year-old SkyNRG supplied the world’s first commercial flight using SAF back in 2011. Until now, though, its focus has been on trading, advisory services and research and development.

Mr Dooley said that because the business was now looking to develop production facilities on both sides of the Atlantic, it needed a new tranche of investment.

The company’s plan is to get those facilities up and running by 2030, with the additional backing of Boeing and KLM as offtake partners, whose combined long-term SAF purchasing commitments total up to €4 billion.

SAF is produced