Fri 17 Feb 2017 – Although sustainable alternative fuels are key to meeting the aviation sector’s long-term emissions goals, supportive government policies are required to bring these fuels to global deployment. This was a central theme of last week’s ICAO Seminar on Alternative Fuels in Montreal that brought together a range of stakeholders including biofuel producers, regulators, the airline and aerospace sectors, and government representatives. The seminar was a precursor to a high-level ICAO Conference on Alternative Fuels to be held in Mexico City next October in which States will convene to devise strategies for developing commercial-scale supplies of sustainable jet fuels. Speakers at the seminar said policy efforts were required to reduce financial risk, ensure a level playing field with other transport sectors and create public-private partnerships. The seminar was also a chance for biofuel producers and airlines to provide updates on alternative fuel projects.
“While today’s commercial aircraft may be 80% more fuel efficient and 75% quieter than the first commercial jets, we must also keep in mind that the fuel efficiency improvements achieved, whether through new technologies or more efficient flight procedures, will likely not be enough to keep up with projected traffic growth,” said Dr Olumuyiwa Benard Aliu, ICAO Council President, at the opening of the seminar. “More must be done, and sustainable fuels are now poised to make important contributions with respect to near-term gains. We will therefore be focusing greater attention this year on policies to enhance the use of alternative fuels.”
While the technological feasibility of alternative jet fuels may be fully proven, he said, barriers to large-scale deployment remained. “The most significant challenge restricting their demand continues to be the price gap with conventional fuels, which in turn limits investment in the new refineries needed to scale up production,” he told delegates. “This is precisely the sort of negative cycle we must work to reverse.”
Possible solutions, he proposed, would include more long-term agreements between airlines and biofuel producers in order to ensure continuous demand and sufficient supply, together with incentive schemes and amendments to national energy policies.
Dr Aliu reported that ICAO’s Committee on Aviation Environmental Protection (CAEP) was working on future projections in alternative fuels production and their life-cycle environmental benefits. The accounting methodology of these benefits, he said, will be incorporated into the eventual monitoring, reporting and verification (MRV) system for ICAO’s CORSIA carbon offsetting scheme. CAEP is due to submit its MRV proposals shortly, he added, and would be considered for adoption by the ICAO Council later this year.
Jane Hupe, ICAO Deputy Director Environment, told the seminar that CAEP’s Alternative Fuels Task Force was undertaking work to define how an aircraft operator’s offsetting requirements under CORSIA in a given year can be reduced through the use of sustainable alternative fuels based on:
- Sustainability requirements defined by a set of sustainability criteria;
- An emissions factor defined by a set of indirect land use change (ILUC) life-cycle analysis default values; and
- The application of a methodology to define life-cycle emissions.
She said the ICAO 2016 Assembly resolution on CORSIA (A39-3) had called for the promotion of the use of emissions units generated under the scheme that both benefited developing States and also encouraged States to develop domestic aviation-related projects. This, she said, meant CORSIA emission credits could be generated from sustainable alternative fuel projects.
The co-leads of a CAEP task group working on policy guidance for the deployment of sustainable alternative fuels (SAFs) for aviation, Robert Boyd of IATA and Wendy Aritenang of the Indonesia Biofuels & Renewable Energy initiative, said in a presentation there was a need for States to include SAFs in their policies but previously little information had been available and best practices to look at. The task force has, they reported:
- Performed a literature review and developed a repository of policy options;
- Developed a qualitative metric to assess the effectiveness of policies, presented as a check-list instrument for States to evaluate the potential impacts from their policy decisions;
- Performed quantitative project level modelling of policy options and evaluate specific case studies; and
- Developed a final report of guidance material.
In a separate presentation, Aritenang said Indonesia – a developing country that intends to join the pilot and voluntary initial phases of CORSIA starting in 2021 – considered ICAO climate goals could only be achieved through large-scale deployment of SAFs. However, to achieve a 20% emissions reduction from their use would require around 70 new biorefineries to be built every year from now to 2050, he said, quoting analysis developed by the Massachusetts Institute of Technology for CAEP assessment work. To achieve a substantial market penetration of SAF use by 2050, an annual capital investment similar to road transportation biofuels, which were developed under strong policy schemes, would be needed.
“As current global biofuels growth is fully driven by policies focused on road transport, without similar strong policy drivers for aviation, the ICAO goals would be unachievable,” he said, and suggested ICAO should undertake a stronger effort to promote and recommend policy action to States, as it had done with CORSIA.
He said as far as Indonesia was concerned, if sustainability criteria was made too stringent and there was uncertainty over calculating life-cycle emission values then this would discourage jet biofuel production. He was also concerned that CORSIA could actually be in competition with the deployment of SAFs. If the market price of emission units was very low, airlines would likely choose carbon offsetting over using SAFs. A possible solution would be to limit the percentage of emissions that could be offset under CORSIA, he suggested.
CORSIA had been a successful global policy driven by ICAO and he recommended the next step should be a similar effort to promote the use of green energy in aviation by establishing aspirational supply goals for States.
Pedro Scorza of Brazilian airline GOL, said his country would need to produce around 678,000 tonnes of SAF by 2030 to avoid emissions of close to 1.5 million tonnes of CO2e if carbon-neutral growth was to be met from Brazilian airlines flying on international routes under the CORSIA scope. However, he said, a more desirable scenario for the country was to be producing 4.6 million tonnes of SAFs by 2030 to offset the growth in emissions from all jet fuel use in Brazil. SAF production in Brazil also had the added benefits of potentially creating 60,000 jobs across the value chain and avoiding the huge cost of importing fossil kerosene that amounted to over $500 million in 2015, having peaked at $1.6 billion in 2013.
To achieve the desired 2030 scenario, Scorza reported, work had begun in the country to establish a set of policies and action plans that included production regulations, quality and sustainability certification, financial incentives, funding packages, R&D, biomass value chain integration, a national jet biofuel Act and partnership between airports, airlines and jet fuel suppliers.
Dr Lourdes Maurice of the FAA said in the United States government efforts had helped with the certification of new fuels and the public-private partnership through the Commercial Aviation Alternative Fuels Initiative (CAAFI) had facilitated a 15-fold increase in alternative jet fuel use in the US. However, she said, policies for SAF deployment would need to be specific for each State or region and ICAO could play a key role in coordinating policies to allow for consideration of unique circumstances. With experts from States, industry and civil society on CAEP’s Alternative Fuels Task Force and holding seminars and conferences on the subject, ICAO was an excellent forum for coordination, she said. Facilitating technical and information exchanges among Member States would help develop synergies and solutions, she added.
ICAO is involved in a €6.5 million ($7m) assistance project with the European Union that includes a study in the Dominican Republic to determine the feasibility of producing aviation alternative fuels in the country. The objectives of the study were to define opportunities for a potential value chain, as well as the potential capacity for feedstocks and biojet production, cost and demand considerations, local environmental impact and also ascertain policies, challenges and alternatives.
The study found, reported Eduardo Caldera-Petit, the project’s coordinator, that unlike in other countries where renewable jet fuel projects were in progress, there was little or no prospect for using feedstocks sourced from vegetable oils and fats, municipal or industrial wastes, or from agricultural residues. However, it discovered the country has a significant potential from locally grown sugarcane that could be used to produce Synthesized Iso-Paraffinic (SIP) or Alcohol-to-Jet (ATJ) fuels.
As a result of the study, a roadmap strategy has been implemented starting from 2017 that involves government, industry, airlines and airports.
“Technical assistance can act as a catalyst to trigger initiatives at the State level,” said Caldera-Petit. “This shows the important role ICAO can play.”
From a developed world perspective, European Commission transport adviser Peter Vis said EU biofuel policy was based on a blending obligation and had primarily focused on road transport. The current policy up to 2020 was a 10% target for the use of renewable energy in transport for each EU State, with a minimum 50% GHG saving from 2017, direct land use change effects taken into account and sustainability criteria following life-cycle analysis. However, he reported, the current biofuel share across the 28 EU States was less than 6% in 2014 and was forecasted to reach just 7% by 2020, with only four Member States expected to meet the 10% target.
The use of advanced biofuels is projected to rise from 0.5% in 2021 to 3.6% in 2030, with a declining contribution of crop-based biofuels that will be capped at 3.8% in 2030. Vis said aviation and maritime fuels were not in the blending obligation but, to encourage their use, can now be used to comply with the obligation with a 1.2 multiplier.
Using regional blending mandates can lead to higher fuel prices and causes competitive distortion, and a system whereby producers can opt in, such as in the US and the Netherlands, was preferable, said Leigh Hudson of the International Airlines Group (IAG)
Sustainable fuel production is expected to play a major role in meeting UK 2050 emission targets, she said. Under a UK aviation industry trajectory, up to 12 production plants are expected to be operational by 2030, supplying around 700,000 tonnes per year of SAF. This is expected to more than double to 1.5 million tonnes a year by 2040 and rapidly growing to 4.5 million tonnes by 2050. She added that in order to achieve a 24% reduction in CO2 emissions in 2050, the rate of production would require an annual growth of 14-18% after 2030 – slightly lower than seen in road transport fuels. Hudson estimated the global potential for the production of SAFs by 2030 was in the region of 13 million tonnes.
Carlos Calvo Ambel from the International Coalition for Sustainable Aviation (ICSA), which represents NGOs at ICAO, questioned whether it was fair to provide aviation alternative fuels with government incentives and provide a level playing field with road transport. Aviation fuel largely enjoyed a tax-free status, which didn’t apply to road transport, and only 5% of the world’s population had ever flown. He said biofuels could not solve aviation’s climate problem and faced sustainability and large-scale availability challenges.
The seminar heard from a number of biofuel producers and airlines engaged in commercial-scale SAF production projects. Bruno Miller of municipal solid waste (MSW) to jet fuel company Fulcrum said construction would start shortly on the company’s Sierra BioFuels Plant in Nevada, with operations beginning in 2019 that are expected to produce over 11 million gallons of renewable fuel annually. Its feedstock processing facility has already been completed and is in start-up operations. Fulcrum has identified a further seven potential projects in the US and has offtake and investment agreements with Cathay Pacific, United Airlines and Air BP that could eventually see production of 300 million gallons of renewable jet fuel annually.
Miller said consistent policy frameworks were required across the world as it was difficult to comply with different requirements in different regions or countries.
United has taken a $30 million investment in Fulcrum and is looking to co-develop up to five facilities and purchase around 90 million gallons of biojet per year. The airline is already involved in an initiative with AltAir in which it can purchase up to 15 million gallons annually, and started flying with AltAir’s fuel from its Los Angeles hub last March.
United’s Angela Foster-Rice said government support and engagement was required for commercial scale-up through policies and incentives, as well as by providing resources and funding for research and demonstration plants.
Laurel Harmon of LanzaTech, which is currently going through the ASTM approval process for its ATJ Lanzanol fuel, said that where incentives exist, a level playing field should be ensured for current, emerging and yet-to-be-invented technologies.
Robert Wood of Virgin Australia said the development of the aviation biofuels market was not happening nearly fast enough due to scale-up technology challenges, embedded fossil fuel subsidies, government policies and the significant capital requirements.
In partnership with Air New Zealand, the airline launched a ‘request for information’ in March 2016 from parties to produce 200 million litres of fuel in Australia or New Zealand for 10 years from 2020. Wood reported there had been a strong international as well as regional interest from governments and industry stakeholders, and the partners were currently in commercial negotiations with short-listed respondents.
The seminar concluded with a high-level roundtable session involving ICAO State representatives who discussed the outcomes from the seminar that could be taken forward to the Mexico City conference, which will take place October 11-13.
Slide presentations are available for download from the ICAO website, plus an animated graphic highlighting key statistics that were presented during the seminar.
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