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A 30 per cent share of sustainable aviation fuel at Norway’s airports by 2030 is achievable with public funding help, finds report

A 30 per cent share of sustainable aviation fuel at Norway’s airports by 2030 is achievable with public funding help, finds report | Ramboll,Avinor,Air BP,Bergen Airport

First supplies of jet biofuel delivered by Air BP to Bergen Airport (photo: Avinor)

Fri 25 Aug 2017 – Around 30% of all jet fuel, or 400 million litres, supplied at Norwegian airports could be sustainable by 2030, finds a new report produced on behalf of the country’s aviation sector. However, because of the high price premium of jet biofuel compared with its fossil equivalent, this would only be possible with the help of policy intervention and public funding. A domestic aviation biofuel market could be created either by implementing a blending requirement or through a fund to raise the necessary finance for production, which would be based on feedstocks from Norwegian forestry residues and pulpwood. The report suggests two potential funding models. Meanwhile, following the introduction of commercial jet biofuel supplies at Oslo Airport in January 2016, a first batch of biojet has been delivered to Bergen Airport in Norway by Air BP.

 

The new report by Rambøll for the Norwegian aviation sector and airport operator Avinor updates a previous study it carried out in 2013 (see article). This time, Rambøll focused on sustainable feedstock supply in Norway and new certified biofuel production technologies, along with proposing policy instruments that would be needed to implement commercial supplies of jet biofuel at Norwegian airports.

 

With its abundant forestry resources, the study says two obvious feedstock value chains can be used for jet biofuel production: forest residues, including twigs and treetops, and other waste fractions from the forestry industry that are not currently exploited, and pulpwood that was once used by the paper industry and is now exported. The sustainable forest feedstock potential amounts to 13 TWh if logging is kept at present levels and by utilising pulpwood currently exported or unused. If logging increased to the maximum sustainable volume, the resource potential increases to 22 TWh. This amounts to between 600 and 1,000 million litres of biofuel production per year, of which half could be dedicated to sustainable aviation biofuel, estimates Rambøll.

 

However, it says, there are no current technologies available for producing such fuels from forest feedstock on a commercial scale and in order to reach the 400 million litre target by 2030, imports will probably be necessary.

 

The other major challenge is the cost of producing sustainable aviation fuels (SAF). Rambøll estimates the cost of aviation biofuel production is 7-25 NOK ($0.90-3.20) per litre, depending on the feedstock used, the production technology and other factors, compared to conventional fossil aviation fuel at 4-5 NOK ($0.50-0.64) per litre and sold at around 6 NOK/litre. The lower end of the production cost of SAF is achieved only through HEFA-derived fuels, which utilise oil crops and animal fats as feedstock, which are not considered relevant for Norwegian production.

 

Technologies for producing aviation biofuels from forestry feedstock, such as Fischer-Tropsch and alcohol-to-jet, are yet to be commercial due to the higher costs. The report finds though that possible cost reductions can be achieved by implementing selected measures over the time period to 2030 and other bi-products can be derived from the production process. However, it adds, production of SAF based on forest feedstock in general requires considerably higher crude oil prices than at the present in order to be profitable. In order to increase production, long-term policies are therefore necessary to reduce the risk arising from low prices of crude, it argues.

 

Two alternative solutions are put forward in the report to achieve this: implementing a blending requirement or through a fund. The former would create a market but also add an extensive extra cost to airlines, and a requirement only taking effect in Norway could induce those airlines to refuel in other countries.

 

A fund, on the other hand, could be created by uniting the current Norwegian carbon tax on fuel used on domestic flights (1.1 NOK/litre, equating to 430 NOK/kg) with air passenger tax and use it to buy SAF, thus contributing to increased production. The fund could be distributed in different ways, suggests Rambøll, for example to cover the SAF price premium or to purchase the fuel on behalf of airlines wishing to use it and subscribing to the fund. A long-term contract between a supplier and the fund, providing a specified fuel volume at a set price would remove the supplier’s market risk, it says. The funding should be phased out over time and deliveries would eventually be based solely on commercial terms.

 

Commenting on the report, Torbjørn Lothe, Director General of the Federation of Norwegian Aviation Industry, said: “Authorities and politicians will have to facilitate large-scale investment in the commercial production of biofuel in Norway with financial incentives that work. The environmental charges currently paid by the airlines would have to be used for activities that benefit the climate. This would allow us to create a commercial market as quickly as possible for the production of aviation biofuel, which would go to those sectors of the aviation industry that currently have no other technological alternatives.

 

“The fund system could help the Norwegian aviation industry to reduce greenhouse gas emissions by 30% by 2030. It would also have a knock-on effect in terms of emissions trading allowances and would achieve reductions in other sectors.

 

“We have outlined the options and now it is up to the authorities and politicians to turn the aviation industry’s green initiative into reality.”

 

Dag Falk-Petersen, CEO of Avinor, welcomed the report’s findings and added large-scale production of sustainable fuels would also create new businesses and jobs in the country.

 

Small quantities of SAF have been made available to airlines at Avinor-operated Oslo Airport by Air BP since January 2016 (see article) and this month a first batch of around 100-150 tonnes was delivered to Bergen Airport that was produced by AltAir in the United States from a feedstock of used cooking oil. The fuel was blended by Air BP in Sweden.

 

“That is not a huge volume but it is important for us – as we did in Oslo – to sort out all the initial logistics and administrative issues,” said Avinor’s Olav Mosvold Larsen. “The aim is to expand if and when more sustainable fuel becomes available in the market at an acceptable price. The future ambition is to source locally-produced jet biofuels from Norway.”

 

Aslak Sverdrup, Director of Bergen Airport, said: “With the aviation industry’s ongoing commitment to protecting the environment, we are very pleased to collaborate with Air BP on the introduction of biojet at Bergen. As with Oslo, we hope to inspire other airports to follow suit so we can all work towards the desired lower carbon future.”

 

Together with Oslo and Halmstad Airport in Sweden, Bergen is Air BP’s third airport in Scandinavia where it is making commercial supplies of jet biofuel available. Last November, the company announced an investment of $30 million in US waste-to-biojet producer Fulcrum BioEnergy (see article).

 

 

Link:

Rambøll Report – ‘Sustainable Aviation Biofuel Status 2017’

 

 



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