TotalEnergies to produce 500,000 tons of sustainable aviation fuel by 2028

TotalEnergies (TTE) plans to produce over 500,000 tons of sustainable aviation fuel (SAF) annually by 2028, exceeding the EU's 6% SAF blending mandate for 2030 and positioning the company to supply over 10% of its European jet fuel volumes as SAF. The company is investing heavily in biorefineries across Europe, including a €500 million investment in its Grandpuits site, and has secured major supply agreements with Air France-KLM and Volotea. TotalEnergies is also partnering with aerospace companies to study the impact of higher SAF blends on aircraft performance as part of its broader strategy to decarbonize the aviation sector.

Analysis

TotalEnergies is making a significant strategic move into sustainable aviation fuel (SAF) production, planning to achieve an annual output exceeding 500,000 tons by 2028. This production capacity would enable the company to surpass the European Union's 6% SAF blending mandate set for 2030 and supply over 10% of its own jet fuel volumes in Europe with SAF. The commitment is underpinned by substantial capital allocation, including a €500 million investment to convert its Grandpuits facility into a biorefinery with an anticipated 230,000 tons annual SAF capacity by 2026. Further contributions will come from its La Mède biorefinery, producing 15,000 tons of SAF this year, and through coprocessing operations at refineries in Normandy (160,000 tons capacity), Antwerp (initially 50,000 tons, expanding to 80,000 tons), and Leuna (50,000 tons planned for 2026). Commercial viability is supported by major long-term supply agreements, notably with Air France-KLM for up to 1.5 million tons of SAF over ten years and a separate contract with Volotea extending until 2029. Additionally, TotalEnergies is proactively engaging in research with aerospace leaders like Airbus and Safran to assess the performance implications of higher SAF blends, aligning with its broader objective to decarbonize the aviation sector, an area with few immediate low-carbon alternatives. This strategic initiative, viewed with strongly positive sentiment (TTE sentiment: 0.85), positions TotalEnergies favorably to capitalize on the growing demand for lower-carbon aviation fuels and navigate the energy transition effectively.

Key Decisions for Investors

• Investors should recognize TotalEnergies' aggressive expansion into SAF production as a positive long-term catalyst, positioning the company as a key player in the decarbonization of the aviation sector and aligning it with growing ESG mandates and market demand.
• The substantial capital investments, including the €500 million for the Grandpuits biorefinery, and secured long-term offtake agreements with major airlines like Air France-KLM, significantly de-risk the venture and underscore a strong commitment to capturing market share in the sustainable fuels segment.
• Monitoring the successful execution of its production targets, particularly the ramp-up to over 500,000 tons by 2028, and the evolving regulatory landscape for SAF will be crucial for assessing the ongoing value creation from this strategic pivot.