Fri 21 Sept 2012 – In its quest to secure new sources of sustainable jet biofuel, Lufthansa has signed agreements with Solena Fuels and Australian-based Algae.Tec. Solena has already identified a site for its first production facility in Germany, situated not far from the border with Poland in the Schwedt/Oder region. The project will be the first of its kind in Central Europe to provide synthetic biofuels from large-scale waste from landfills and incinerators. It will provide Lufthansa with drop-in, certified jet fuel for prospective use on commercial flights. Solena says an announcement on progress concerning its proposed London project with British Airways is imminent. Algae.Tec’s collaborative deal with Lufthansa involves the construction of a large-scale plant in Europe to produce aviation biofuel from algae. Both companies took part in the Alternative Aviation Fuels Pavilion at the ILA Air Show in Berlin last week, along with other biofuel producers including natural gas to jet fuel technology company Primus Green Energy.
“Lufthansa is pleased to assist Solena in developing its first plant in Germany and is working towards a long-term, bankable offtake agreement with Solena Fuels,” said Joachim Buse, the airline’s Vice President Aviation Biofuels. “We believe that Solena’s capabilities to process multiple types of waste feedstock represent a good opportunity in our endeavour to meet our emission reduction commitments.”
The facility will convert more than 520,000 tonnes of waste biomass into jet fuel, diesel fuel and electricity. The MoU between the two parties will see the joint development of fuel supplies and delivery to the new Berlin Brandenburg Airport, which is due to open in a year’s time.
“Lufthansa has been a pioneer in the biofuels industry and we are pleased to see their support to Fischer-Tropsch bio-synthetic paraffinic kerosene (FT-SPK), an industry accepted fuel which meets and exceeds ETS standards based on both Roundtable on Sustainable Biofuels schemes and Renewable Energy Directive methodology for life-cycle analysis evaluation,” commented Solena CEO Dr Robert Do.
He told GreenAir that the early identification and approval of the refinery site at the PCK Industry Park in Schwedt/Oder had contrasted with the length of time it was taking to select and get the necessary planning permission for a site in east London for its GreenSky project with British Airways. Do also said the technology that will be used in the London plant will be blueprinted for the German facility. He indicated that an important announcement would soon be made on the London project.
The existing PCK Refinery at the industrial park is among the largest companies in the state of Brandenburg and processes around 12 million tonnes of crude oil annually into mineral oil and petrochemical products, including jet fuel for Berlin’s airports. It was also one of the first refineries in Germany to use biofuels and is a leading producer of high-quality biofuel components.
“It was a pleasure for us to assist Solena in identifying a plant location that offers close proximity to biomass waste, jet fuel logistics to Berlin Brandenburg Airport and synergies with both traditional and biofuel refineries,” said Dr Marcus Schmidt, Director Chemicals at Germany Trade & Invest. “Solena’s facility will create substantial economic, development and employment opportunities benefiting the greater Schwedt/Oder area and the State of Brandenburg.”
The location for the Algae.Tec facility to produce jet biofuel from algae for Lufthansa has not yet been revealed – although it is likely to be in southern Europe – but it will be close to an industrial CO2 source, a prerequisite for the company’s technology, which captures carbon pollution from power stations and manufacturing facilities to feed into the algae growth system.
The process uses enclosed photo-bioreactors that are retrofitted into 40-foot shipping containers linked to solar light capture arrays. The containers can be linked together as modules, depending on the scale of production required.
“We put sunlight inside the containers via a fibre optic tube, take CO2 from the facility and add water and nutrients,” Algae-Tec’s Managing Director, Peter Hatfull, told GreenAir. “The technology inside the box is basically a very large surface area we have developed so, in effect, what is created is a very large pond and ideal growing conditions. This in turn creates a perpetual algal bloom within our boxes.”
What eventually comes out of the process is vegetable oil and a biomass of simple sugars and edible protein, which can be turned into animal feed or further hydro-cracked into jet fuel.
“The key to the technology is the high-volume growth we get that brings down the cost structure,” said Hatfull. “Compared to a pond system, it’s controllable and you can put it where you like, in different sizes and around your CO2 source. On a net basis, for every tonne of algae we produce, we capture two tonnes of CO2.”
Although the technology has only been tested under small-scale conditions and so far for less than a year, he is confident each container module is capable of producing 250 tonnes of algae per year. A standard plant consisting of 500 modules would therefore produce 125,000 tonnes per year and capture 250,000 tonnes of stackgas CO2 emissions.
At an operational cost of around US$185/tonne plus $50/tonne capital cost, Hatfull said this equated to “a very competitive” price of between $40 to $50 per barrel of oil. He estimates a two-year payback on the capital costs, with a minimum 20 to 30 modules necessary to break even but anticipates 250 to 500 being the more likely set-up for a commercial operation.
Last month, Algae.Tec opened a one-container test facility next to a flour waste to ethanol manufacturing plant south of Sydney with the aim of producing jet fuel. If the test goes according to plan then a 250-module plant will be built, potentially upgradable to 500. The photo-bioreactors were manufactured at Algae.Tec’s USA headquarters in Atlanta, which boasts a state-of-the-art laboratory, multiple test units and a fabrication facility.
Although a number of the major algae-based biotech companies are eyeing the pharmaceutical and nutraceutical markets as a potentially more lucrative income stream, Hatfull says this is not as attractive to Algae.Tec as jet fuel. “At the moment, airlines are showing tremendous interest in buying sustainable fuels at a competitive price and they have to do something about their carbon footprint. They are the ideal partners.”
Algae.Tec has recently recruited former Qantas sustainable fuels specialist Colin McGregor as General Manager Project Operations.
The relationship with Lufthansa is at an early MoU stage but Hatfull expects it to progress to an offtake agreement. “They are willing to partner with us to identify sites and talk to CO2 producers,” he says. “They have a real desire to do something to get a source of sustainable fuel.”
Another biofuel producer in the process of setting up a similar partnership with a major airline is US-based Primus Green Energy. The company is a developer of a syngas-to-gasoline technology that converts natural gas and/or biomass into high-quality, high-octane gasoline and jet fuel. With a pilot plant already in operation at its New Jersey headquarters, Primus is in the process of building an automated demonstration plant on the site.
Now it is planning to break ground next year on a commercial-scale plant in Louisiana capable of producing between 20 and 30 million gallons of fuel per year by the end of 2015, with 80% of the production in time being renewable jet fuel. Primus is in the process of reaching an agreement very shortly with an unnamed major US airline to take the full jet fuel output on a long-term – between 10 and 20 years – basis.
Details are still being worked out, said George Boyajian, VP Business Development of Primus at the ILA Air Show, but the airline may take the feedstock and front-end pricing risk as part of the agreement. The terms of the pricing structure of the jet fuel to the airline will remain confidential for the time being, he says. “We have a couple of different models but it largely depends on how they get their price on the front end. They have been very flexible and innovative on putting this deal together. For them, reducing the variability of the cost of the jet fuel is their highest priority. Their attitude has been ‘what do we need to do to make this succeed?’.”
Added Primus CEO Robert Johnsen: “And then the contract will become the basis that enables us to project finance the $180 million construction cost of this facility.”
The Primus technology of converting the feedstock to syngas and using a catalytic process to convert it to drop-in jet fuel is similar to Fischer-Tropsch (FT) but has many advantages over FT, said Boyajian. Capital and operating costs are much lower as the number of end products are lower – one or two, compared to six or seven from FT, he said. The Primus process also has a considerable advantage in terms of conversion efficiency by mass of the feedstock, which means more gasoline or jet fuel can be produced at a lower cost and competitive with fossil-based crude equivalents, at around $2 per gallon without a government subsidy, he claimed.
A controversial aspect of the process is that biomass feedstock can be replaced or supplemented with natural gas, of which there are abundant supplies in the United States compared with unreliable and potentially costly sources of woody or herbaceous biomass. Not all airlines will be comfortable with using natural gas as feedstock, despite claims of lower carbon life-cycle emissions than petroleum-based fuels. However, said Boyajian, locking in at current natural gas prices on a long-term basis, say for 10 years, could provide jet fuel at an equivalent price of around $70 per barrel. Even if in the unlikely event the price of natural gas was to treble, it would still represent a per barrel price of only $100, he added.
Another downside is that the pathway has not yet been approved by ASTM for use in commercial airline operations but Primus is confident that its high-quality jet fuel product will be passed within three years.
“We’ve had samples of our fuels tested in the labs and they have come up very well,” said Johnsen. “We have a partner that we will be announcing shortly who will guide us through the approvals process. The process will require a bigger supply of samples for testing purposes and we will be able to produce them at our new demo plant from next year.”
Given the ASTM approval hurdle and that its high-octane gasoline product is superior in quality to fuel found at the pumps, what is the attraction for Primus to supply the airline sector with jet biofuel rather than gasoline for ground transport? “It’s a discrete market that isn’t going to go away in that it isn’t going to be replaced by electric power,” said Johnsen. “The end users are so motivated to work with us and to have an alternative to crude that they are prepared to engage in a long-term supply contract that we in turn need in order to build a plant. We can provide a domestic North American solution that is an alternative to the global crude oil price mechanism they are currently subject to.”
Lufthansa - Biofuels
Primus Green Energy
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