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Virgin Australia and Air New Zealand sign agreements with Australian company Licella to develop aviation biofuels

Virgin Australia and Air New Zealand sign agreements with Australian company Licella to develop aviation biofuels | Virgin Australia,Air New Zealand,CSIRO,SAFUG

Wed 14 Dec 2011 – Australian biofuel company Licella has signed Memoranda of Understanding with both Virgin Australia and Air New Zealand to assist with the development of the Licella’s technology to convert ligno-cellulosic biomass such as wood waste into sustainable jet biofuel. The ‘supercritical’ water technology involves a patented process using a Catalytic Hydro Thermal Reactor (CAT-HTR) that breaks down pulverised biomass to produce high-quality bio-crude oil. The process has been developed over the past three and a half years at Licella’s pilot facility in Somersby, NSW, and today a new demonstration plant was opened. Virgin Australia and Licella will jointly explore and test the potential of CAT-HTR to produce aviation fuel with the aim of supporting certification and reaching a commercial off-take agreement. Under the Air New Zealand MoU, the two parties will explore the potential of the technology to produce aviation biofuel in New Zealand.


The process can use a wide range of biomass, including agricultural and farm waste, to produce the bio-crude. The pilot plant has worked with a range of energy plants and sawdust although in principle, says Licella, any lingo-cellulosic biomass can be used. The new Commercial Demonstration Plant has been part-funded with a A$2.4 million ($2.38m) Australian federal government grant under the ‘Gen II’ fuel programme.


“By pioneering the use of water technology, Licella’s CAT-HTR offers a clean, fast and cost-effective method of processing biomass,” said Virgin Australia Group Executive of Operations Sean Donohue. “We were particularly drawn to Licella because its activities support Australian jobs, rural communities and our natural environment.


“Our strategy on sustainable aviation fuel is to work with a range of stakeholders across the industry. This is because we know creating a financially viable biofuel will require a variety of feedstocks and processes.”


Donohue explained the Licella technology could potentially complement a variety of sustainable Australian feedstocks the airline was exploring. In July, Virgin Australia announced it was joining a Western Australia consortium that plans to use pyrolysis technology to process mallees, a species of eucalypt tree, into jet fuel (see article).


Commenting on the agreement, Licella CEO Steve Rogers said: “With the opening of our new, potentially energy game-changing facility, along with Virgin Australia’s support, Licella is on its way to achieving its goal of producing 500,000 barrels a year of bio-crude oil by 2015-16.”


Air New Zealand Deputy CEO Norm Thompson said his airline too was collaborating with a number of parties to research and develop bio-derived sustainable fuels, with a particular focus on growing a local aviation biofuel industry in New Zealand.


The airline was the first-ever airline to operate a sustainable aviation fuel flight back in January 2009 (see article). Along with New Zealand Trade and Enterprise, it has been working closely for more than two years with Licella and Norske Skog, a Norwegian paper manufacturer.


Licella Fibre Fuels, a new joint venture formed by Licella and Norske Skog Australasia, holds the exclusive licence of proprietary knowledge and intellectual property for converting lingo-cellulosic biomass into bio-crude using the CAT-HTR technology.


Licella’s Steve Rogers hoped the JV would lead to the construction of a large-scale second generation bio-crude oil production plant in New Zealand or Australia.


“Our ability to be able to make a bio-crude oil which can be dropped in and blended with traditional crude is a key differentiator of our technology, as it significantly reduces the capital costs of its implementation and enables us to increase volumes over time,” he said.


Both Virgin Australia and Air New Zealand are members of the Sustainable Aviation Fuel Users Group (SAFUG) and the SAFUG Sustainable Aviation Fuel Road Map (SAFRM) Australasian grouping.




Virgin Australia – Sustainable Aviation Biofuel

Air New Zealand – Environment & Sustainability






(L-R) David White, Virgin Australia Manager, Sustainability and Climate Change; Martin Ferguson, Minister for Resources and Energy; and Robert Boyd, Virgin Australia Principal Economic Analyst at the opening of the Licella demonstration facility:




Licella’s Chairman, Dr Len Humphreys, explains the company’s technology and process:


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