Thu 16 June 2011 – The Inter-American Development Bank (IDB) has announced an initiative help finance public and private institutions in Latin America and the Caribbean to develop a sustainable jet biofuel industry from locally grown organic feedstock. The initiative will fund consultancy services, knowledge development, dissemination material and workshops, with the goal of demonstrating the feasibility of the fuels for the local aviation sector and for potential export. The IDB is partnering with organisations such as ICAO, the Commercial Aviation Alternative Fuels Initiative (CAAFI) and the World Economic Forum, as well as other aviation industry stakeholders and biofuel technology providers. Although the size of the available funding has not been disclosed the IDB provides more financing to the region than any other government-owned financial institution. Elsewhere, the US Department of Energy has awarded $13.4 million of federal funding to Virent towards the development of jet biofuels.
With its experience in producing ethanol and biodiesel, the IDB sees the Latin America and Caribbean (LAC) region playing a lead role in the supply of jet biofuels while contributing to local economic development and generating quality jobs. “We expect the production cost to be lower in LAC than in other regions, especially the major jet fuel consumer ones,” said the bank in a statement.
“This new biofuel market niche has excellent prospects due to its strong association with climate change issues, and the great stakeholder motivation and support for biojet fuels,” added Arnaldo Vieira de Carvalho, leader of the IDB team for the initiative.
The first expected activity will be concerned with establishing and applying sustainability criteria and standards, with the evaluation of GHG life-cycle performance of renewable jet fuels from one or more feedstocks, for example sugarcane, jatropha, African palm and others still to be defined. The exercise will be to benchmark with sustainability standards set down by the Better Sugarcane Initiative and the Roundtable for Sustainable Biofuels (RSB).
The results will also be compared with the IDB’s own Biofuels Sustainability Scorecard, which was created by the bank’s Sustainable Energy and Climate Change Initiative and the Structured and Corporate Finance Department. The Scorecard is based on the sustainability criteria of the RSB and is designed to encourage higher levels of sustainability in biofuels projects by providing a tool for producers to think through the range of complex associated issues. As the scientific debate continues to evolve, the Scorecard will continue to be updated and revised, says the IDB.
Laura Natalia Rojas, co-leader of the project, believes the aviation biofuels market will encounter fewer technical and market obstacles due to the ‘drop-in’ fuel approach being adopted by the aviation industry “This should make it easier to introduce the fuels,” she added.
The IDB will employ grant resources from its Sustainable Energy and Climate Change Fund to finance activities under the initiative. Countries that have already started developing sustainable jet fuels in the region, including Brazil, Mexico and Colombia, will be among the first to benefit from the grants, said the bank.
The IDB was set up in 1959 to reduce poverty and inequality in the region and to bring development in a sustainable and climate-friendly way. Its shareholders comprise 48 countries, including 26 LAC borrowing members. Last year, the bank’s capital base was raised to $170 billion, enabling lending to increase to $12 billion per year, doubling the levels before the global financial crisis, and allowing substantially increased lending to the private sector.
ICAO and the aviation sector have said that support from major regional and international financial institutions will be crucial in helping an aviation alternative fuels industry get off the ground.
Further north, meanwhile, the US Department of Energy has announced a $13.4 million federal award to Wisconsin-based Virent to employ its patented catalytic process in the conversion of corn stover, a lignocellulosic biomass, to jet fuel. It is part of a $36 million funding to help improve the economics and efficiency of biological and chemical processes that convert non-food biomass feedstocks into drop-in fuels.
Virent, backed by investors including Cargill, Shell and Honda, says its technology will be integrated with the biomass deconstruction technologies of the National Renewable Energy Laboratory, the state-of-the-art purification technologies of the Argonne National Laboratories and advanced computational modelling of Northwestern University.
The drop-in jet fuel generated in the three-year project will be able to be blended seamlessly into other jet fuels at high concentrations as the company’s patented process creates industry-ready molecules that can utilise existing refineries.
“We’ve been making jet fuel from conventional sugars for approximately three years,” explained Dr Randy Cortright, founder and Chief Technology Officer at Virent. “But this award will allow us to move quickly to leverage our recent breakthroughs with cellulosic biomass conversion.”
Inter-American Development Bank
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