Finnish study identifies locally sourced green diesel as a route to aviation biofuel use if price can be met
Tue 9 Dec 2014 – A study commissioned by the Finnish Ministry of Transport and national aviation and biofuel companies has indicated the country is well positioned to start production of aviation biofuels but there are challenges over the higher costs of the fuels and whether airlines would be prepared to pay the differential. The study has examined different business models that could cover the additional costs but the authors say public aid would be required initially to kick-start the market. The extent of biofuel use would, in the end, depend on the interest and readiness of stakeholders to pay. The study identifies green, or renewable, diesel produced at Neste Oil’s Porvoo refinery as a biocomponent for aviation fuel, which would require no separate investment in production although investment would be needed in logistics to make deployment cheaper and faster.
Commenting on the study, the Finnish transport minister, Paula Risikko, said the use of biofuels in aviation would strengthen the country’s image as an innovative forerunner in clean technology and the bioeconomy. “It would also provide many Finnish companies with an entirely new business area, make Helsinki-Vantaa Airport more widely known and increase its attractiveness as an important gateway between Europe and Asia,” she added.
As well as Neste Oil, others involved in commissioning the study included Finnair and Finavia, which operates the country’s 25 airports as well as its air navigation system.
The participants are now considering the study’s findings and proposals, which are based on the assumption that the demand for aviation biofuels will create a supply, that would see the creation of a 'Helsinki Green Hub'. The study proposes the public sector and so-called forerunner companies would be the first to participate in financing the additional costs, which could later be covered by other players as well as through passenger ticket prices. However, the study admits the actual readiness of stakeholders to pay is uncertain and not easily predictable.
Green diesel is currently going through an industry and regulatory approvals process before it can be certified for everyday commercial aviation use. Last week, Boeing successfully carried out the first test flight of Neste’s green diesel product as part of a blended fuel (see article).
Headquartered in Espoo, just outside Helsinki, Neste Oil is one of the world’s largest producers and suppliers of green diesel.
“In 2013, more than 50% of our feedstock was waste and residues and today it is more than 60%, with a target to further increase this percentage,” reported Roger Lindfors of Neste Oil Renewable Products. He said the waste and residues came from animal and fish fat, technical corn oil, palm fatty acid distillate and spent bleaching oil, with future feedstocks expected to come from microbial oil, algae oil and harvesting residues and biomass.