Tue 18 June 2013 – This week’s Paris Air Show will bring together sustainable aviation biofuel interests at both a global and domestic level to help drive the aviation industry towards its carbon-neutral growth target from 2020. The Alternative Aviation Fuels Pavilion at the Show will host a full programme of presentations from industry, state and local interests, as well as a showcase of exhibiting aviation biofuel producers. Rich Altman, Executive Director Emeritus of the Commercial Aviation Alternative Fuels Initiative (CAAFI), who has coordinated the Paris programme, says since the last Show two years ago, the level of international dialogue and cooperation has increased dramatically in the quest to develop sufficient quantities of sustainable alternative fuels to meet the industry goal. Altman estimates there is a requirement for four billion gallons of such fuels to meet a five per cent share of overall global jet fuel consumption by 2020.
British Airways' new Airbus A380 arrives at Paris Air Show (photo: Airbus)
He notes that over the past couple of years, through CAAFI, the United States has signed bilateral agreements with Brazil, Australia, Germany and Spain, and says there is a strong need to draw global entities together and share best practices. Through its civil aviation authority (DGAC), dialogue with French local interests is developing and cooperation with the European Commission is also expanding, reports Altman.
“Collectively, we are far more global than we have ever been – and we need to be if the goals are to be met,” he says.
The four-day programme will include panel discussions and presentations from a range of international and national authorities, including ICAO and ATAG, and cover a diverse range of issues. Altman says there is no ‘one size fits all’ approach to developing alternative aviation fuels, and countries, and even regions within those countries, will have to tailor their own capabilities to support the development of processes and feedstocks that satisfy both national supply needs as well as local technology and supply chain developments. One panel, for example, will examine models and trends from five regions in France, Germany and the United States.
Other sessions will focus on the airlines’ perspective as fuel buyers, private and public sources of funding, and state and regional incentives and support for alternative fuels.
The task of bringing four billion gallons onstream annually by 2020 is formidable – the FAA has set a goal of achieving a quarter of this, one billion gallons, by as early as 2018. Altman says initial biojet refineries will produce around 50 million gallons per year, which works out as a global requirement for around 80 refineries within less than seven years, although the size of such facilities may grow to 200 million gallons annually. The cost of a higher end facility is maybe around $200 million, he estimates.
“The key to achieving this outcome is multiple pathways and success models now,” Altman told GreenAir. “That is why the British Airways/Solena and United Airlines/Altair projects are so important. Once they have been proven ‘investable’ by the private sectors, facilities can be built at a rapid rate. Witness, for example, the commercialisation of the wind power sector.”
Despite the attraction to suppliers of producing high-value specialty chemicals or cosmetics, he says the evidence is clear that there is a growing recognition that sustainable aviation fuels represents a viable market.
“Think of the production facility as an airline looks at its products,” he reasons. “How many high-yield first class tickets does an airline have available for a limited market? Like the airline needing to sell cheap seats to fill planes and maximise profits, so the biofuel production facility has to produce a suite of products to fill capacity and make money. Astute producers who understand their cost structure and are managing it can accomplish that goal.”
Another promising development in ramping up production the United States is the recent determination by the Environmental Protection Agency that jet biofuels are eligible to generate Renewable Identification Numbers, or RINs. Under the Renewable Fuel Standard (RFS2), transportation fuels in the US must have a specified proportion of renewable fuel, such as ethanol, blended with standard fossil fuel. To ensure the mandate is adhered to, each gallon of renewable fuel carries a RIN, which is carried through the supply chain and must be surrendered at the final point of delivery. Aviation fuel is exempt from RFS2 but RINs can be traded in the open market and the RIN value, or credit, creates an incentive to buy and trade aviation biofuel that meets the RFS2 sustainability criteria in terms of greenhouse gas reductions compared to the fossil equivalent.
According to a recent Platts article, there has been an increased demand for RINs this year that has pushed prices up, and many refiners are switching to conventional jet fuel production instead of diesel to avoid RINs obligation requirements. This could have the effect of lowering conventional jet fuel prices in the short term, therefore making biojet even more economically uncompetitive but those in the market believe the EPA may act to make biojet attractive to producers.
“The reason that there is no RFS2 mandate on aviation fuel, which the US aviation industry fully supports, is that it could create issues with safety,” says Altman. “But the RIN implications are very significant as value is added to the stream. The key point is that some airlines and producers consider that part of the value proposition. The bottom line is that the RFS2 system – without mandates and with RINs trading – is working as a policy instrument to move us forward towards achieving our carbon goals and the industry is working closely with all parts of the US government to ensure its continuation.”
The critical path to success, however, is likely not to be financing but rather sustainable feedstock readiness and capture, believes Altman. He sees at least half a dozen or so promising technology pathways being developed, with processes like alcohol-to-jet fuels being approved for commercial aviation use by 2014.
A company pioneering one of these pathways is LanzaTech, which has developed a technology that converts waste gas from industrial sources such as steel mills into low carbon jet fuel and chemicals. The company estimates that its process can apply to 65% of the world’s steel mills, offering the potential to provide 19% of the world’s current jet fuel demand and an overall reduction in GHGs by 50-60% compared to traditional jet fuel.
On the eve of the Paris Air Show, LanzaTech and its airline partner Virgin Atlantic were announced as joint winners in the Business Initiative category of the UK’s prestigious 2013 Observer Ethical Awards. Criteria include whether the business is ethical and commercially viable, whether it is leading the sector and if it inspires others. In March, the two companies won the Sustainable Biofuels Award at the World Biofuels Markets event and last week LanzaTech was named as one of the world’s top 100 sustainable solutions by Sustainia 100. LanzaTech was selected for the positive social, economic and environmental impact the company’s gas fermentation technology will have on local communities.
“At LanzaTech, we firmly believe that economics are not at odds with social or environmental responsibility and we are on a fast track to commercialising a technology that has the ability not only to reduce emissions but to promote economic growth and ensure increased access to energy,” commented Jennifer Holmgren, CEO.
The rapid progress that advanced alternative fuel companies such LanzaTech are making and the increased cooperation between international, national and local concerns are cause for considerable optimism, believes Altman. “The fact that all this is happening in poor economic conditions makes it even more impressive,” he says.
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