SAF Budgeting: Test Delivery, Cost and Emissions Assumptions Before Committing

Build a budget that can survive a changed assumption

A sustainable aviation fuel budget can look straightforward when it contains one volume, one price and one expected emissions benefit. In practice, an airline or aviation fuel buyer may still be negotiating delivery timing, the scope of the quotation and the evidence behind the emissions estimate. Turning those open items into a single confident total can make later approval discussions harder.

For Indian aviation businesses evaluating SAF purchases, a useful finance exercise is to separate the funding request from the assumptions supporting it. Build a small set of scenarios, identify the decisions that release expenditure and state which outcomes remain provisional. The approach below is a proposed budgeting method, not a forecast of fuel prices or a calculation of any operator’s regulatory obligation.

Define what the budget is buying

Start with the commercial scope. Is the proposal for physical fuel, a supply-service package or a separately structured environmental-attribute purchase? Which entity will pay, what will it receive and when will the commitment become binding?

Do not put unlike proposals into the same comparison merely because they all mention SAF. If one quotation covers delivery and another covers only an attribute arrangement, show that difference before presenting unit costs. Ask procurement to explain which costs and obligations are included and which remain outside the offer.

Finance also needs a common comparison period. A pilot purchase and a full-year supply commitment can have different purposes and risk profiles. Give each a distinct approval request rather than allowing the pilot’s assumptions to become the annual budget without review.

Keep the emissions assumption separate from fuel volume

ICAO explains that emissions reductions associated with SAF under CORSIA depend on the fuel’s life-cycle emissions value, expressed in grams of carbon dioxide equivalent per megajoule. Its life-cycle guidance describes default and actual approaches for determining core life-cycle values. Default values depend on factors including feedstock, conversion process and production region; actual values require supporting technical information.

For budgeting, the implication is to avoid treating a volume label as a complete emissions estimate. Have the technical team identify the value being used, its basis and whether it applies to the proposed supply. Record the calculation assumptions alongside the commercial forecast.

ICAO’s eligible-fuels framework concerns aircraft operators’ use of eligible fuels under CORSIA. A corporate travel buyer should obtain a separate assessment of its own reporting treatment. An airline’s treatment should not be copied into a corporate purchaser’s budget as though the rights and accounting were identical.

Separate cash requirements from incremental cost

Ask finance to show both the total cash requirement and the incremental cost relative to the chosen alternative. Those measures answer different questions. The first concerns funding; the second concerns how much additional expenditure the proposal introduces under the stated comparison.

Define that alternative carefully. For a physical-fuel purchase, align the comparison’s delivery scope and commercial assumptions. Identify costs that are common to both options and costs that arise only in the SAF proposal. If the offer involves attributes instead, do not force it into a physical-fuel comparison that obscures what is being purchased.

List exclusions explicitly. Potential items to clarify with the supplier include logistics, administrative services, documentation support and transaction charges. This is a request for a complete commercial scope, not an assertion that every purchase incurs each item.

Test a few decision-relevant scenarios

Choose scenarios that reflect the actual unresolved questions. A useful initial table might look like this:

Scenario	Assumption being tested	Decision it informs
Planned delivery	Agreed quantity arrives in the intended period	Base funding request
Delayed delivery	Part of the purchase moves to a later period	Cash timing and reporting expectations
Revised commercial scope	An excluded service becomes necessary	Contingency and approval limits
Revised emissions estimate	Technical review changes the planning value	Expected outcome and value comparison

Use supplier evidence and internal estimates to populate the scenarios. Assign an owner to each input and distinguish a quotation from a working assumption. Avoid manufacturing a pessimistic or optimistic case simply by applying an arbitrary percentage to every line.

Where the team calculates cost per expected tonne of emissions reduction, use a consistent cost boundary and an appropriately supported reduction estimate. Keep the measure provisional until the relevant assumptions are resolved. It is a decision aid, not evidence that the benefit has already occurred or is available for every reporting purpose.

Link commitments to review points

Consider a hypothetical buyer evaluating a small initial purchase before a larger programme. The first decision might authorise a defined procurement exercise and technical review. A later decision could consider expanded purchasing once delivery arrangements and reporting treatment are understood.

Describe what information is needed at each stage and who may approve the next commitment. The commercial agreement must support any proposed flexibility; an internal stage-gate does not remove a binding purchase obligation. Have procurement and the authorised commercial team reconcile the budget plan with the actual terms.

Specify which changes require renewed approval. A different supply scope, a larger financial commitment or a materially changed expected outcome may warrant another review. Set thresholds appropriate to the organisation rather than importing a generic rule.

Reconcile the budget after execution

Maintain separate records for committed expenditure, payments, delivery status and the supported reporting outcome. This lets management see whether a difference arose from timing, commercial changes or revised technical information. It also prevents a payment from being presented as proof that the anticipated emissions benefit has been realised.

At the next budget review, update the assumptions using the transaction’s actual experience. Keep an explanation of changes so the next decision maker can understand the revised request.

ClimateCred’s SAF and Fuel Desk service area provides a starting point for discussing supply and procurement scope. Bring the proposed offer, comparison basis and unresolved budget assumptions to a consultation. The immediate objective is a funding decision with clear conditions and a transparent account of what remains uncertain.