GREENAIR NEWSLETTER 23 SEPTEMBER 2016
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Design features of the EU’s aviation ETS should be strengthened to deliver real emissions reductions, finds T&E report
Thu 22 Sept 2016 – Despite imperfections, the inclusion of aviation into the EU Emissions Trading System (EU ETS) has functioned well and enjoys a high degree of compliance, finds a new report by Transport and Environment (T&E) that analyses performance over the 2013-2015 period. Even allowing for the reduced scope covering just intra-European flights, the cost to airlines has been far less than industry first predicted, says the Brussels-based NGO. T&E has proposed changes and reforms to the EU ETS to realise greater emissions reductions from the sector. Without further legislative intervention, the EU ETS will automatically ‘snap back’ from 2017 to include coverage of all flights between Europe and third countries pending a decision by countries on the proposed ICAO global carbon measure, and the European Commission is currently consulting on the EU scheme’s future.
Launched in 2012, the EU ETS quickly ran into international political and aviation industry opposition and was forced to back down from its original coverage intention, with temporary legislation enacted a year later called ‘Stop the Clock’. It is currently restricted to flights to and from airports within the European Economic Area (EU28 + Iceland, Liechtenstein and Norway). Although these flights are largely conducted by aircraft operators based in Europe, airlines from other third countries are also included in the scheme as they operate occasional or regular intra-EEA flights.
There are key differences in the design of the EU ETS compared with the global carbon scheme currently under negotiation at ICAO – emissions allowances instead of offsets, being binding rather than voluntary and full rather than partial coverage of emissions – which T&E argues makes it far superior. The use of allowances ensures greater transparency of emissions reductions, whereas the quality of carbon offsets can potentially be unreliable, it says, and the global measure as currently proposed falls well short of meeting ICAO’s own target of carbon-neutral growth by the aviation sector from 2020. In addition, points out T&E, the current draft proposal for the ICAO Carbon Offsetting & Reduction Scheme for International Aviation (CORSIA) includes text that is designed to thwart the EU ETS by making CORSIA the only MBM covering international aviation emissions.
“The EU stopped the clock on its own ETS to give ICAO time to develop an environmentally meaningful measure, not a voluntary scheme which postpones serious action for a decade or more,” said Andrew Murphy, Aviation Policy Officer at T&E. “Europe should be proud of setting the global benchmark, and never replace it with something inferior that is open to bogus offset programmes.”
In its report, ‘Aviation ETS – gaining altitude’, T&E calculates verified aviation CO2 emissions covered by the EU ETS for the three years 2013-2015 totalled 165.3 million tonnes. Aircraft operators were given 97.0 million free aviation allowances (EUAAs), leaving them to purchase and surrender allowances (EUAAs and general EUAs) totalling 68.3 million.
As emissions grew each year over the period, total costs also increased as a result of a need to purchase more allowances. These costs were approximately €152 million ($170m) in 2013, €148 million in 2014 and €178 million in 2015. While aviation emissions increased in 2014, the lower price of allowances in that year resulted in lower financial cost for operators.
Even taking into account the reduced scope (-75%) of the scheme as a result of ‘Stop the Clock’ (STC), the original forecasts by industry of the participation costs in the scheme have not been realised, says T&E. Under current carbon prices, the additional cost to operators of carrying each passenger to flight is insignificant compared to the broader environmental impact of aviation emissions, it contends.
T&E estimates that using the low carbon price during the 2013-2015 period, the EU ETS adds around €0.26 to a single economy class passenger ticket between London and Frankfurt, €0.76 to a ticket from London to Larnaca and, although exempt from the current scope and so hypothetical, €1.13 to a ticket from London to New York. Even under a hypothetical scenario of a much higher carbon price of €25 per tonne and with no free allocation of allowances, the same additional cost per ticket would be €2.11, €6.07 and €9.05 respectively if passed on to passengers.
The T&E analysis shows EU governments raised around €170 million from auctioning EUAAs during the three-year period as a result of the reduced scope. It estimates that under a €25/tonne scenario, a full scope Aviation EU ETS could generate more than €5 billion in revenue per year.
Besides sovereignty issues, industry and third countries opposed the scheme on the grounds that revenues raised by EU states would disappear into treasury coffers, despite the EU ETS directive recommending member states use at least 50% of auction revenues on projects to tackle climate change. Although states do not distinguish between EUAA and EUA revenues, T&E estimates more than two-thirds of both general and aviation auction revenues are spent on the environment.
T&E finds there has been a high degree of compliance with the current scope of the scheme, and third countries that had initially instructed their airlines not to participate, such as China, had now withdrawn their opposition. However, the NGO is critical of enforcement procedures by EU member states against operators that refuse to comply or settle payment notices, and says there is a lack of transparency and unreasonable delay from some states over requirements under EU rules to publicly disclose information on offenders.
The compliance rate of the scheme is as high as 99% of total aviation emissions covered, with between 93% and 94% of operators complying, and T&E considers Europe’s right to regulate flights within the EEA is now accepted international practice.
“Not only has the EU’s ETS disproved sceptics from both within and beyond Europe, but it has served as a model for nascent trading systems in such countries as China and Mexico,” said Murphy. “Replacing the ETS with the promise of something to take effect in 2021 which is far less than global, which sets a weaker target and lacks environmental safeguards, is not the way to strengthen Europe or the world’s climate ambition.”
The report recommends a number of improvements to strengthen the scheme, including reducing the cap by 2.6% annually and to introduce a similar declining cap for aviation allowances. By phasing out the free allocation of allowances, T&E says it would require aircraft operators to purchase more general EUA allowances “and reflect the true cost of their climate impact.”
To further address aviation’s climate impact, a multiplier of two should be applied to CO2 emissions under the scheme, it adds, to cover non-CO2 warming effects.
Controversially, from 2017 T&E also asks the EU to return to its original intention and extend the scope of the scheme to include flights to and from airports outside Europe, perhaps on a 50% coverage basis. After 2020, when the ICAO GMBM would come into effect, Murphy says a decision does not need to be made until after the outcome of the 2019 Assembly when the design of the global scheme becomes firmer but suggests the EU ETS could still be kept with an intra-EEA scope.
The report concludes the ETS for aviation shows potential to achieve emissions reductions at lower cost through trading allowances with stationary ETS sectors, but only if the EU addresses the oversupply of allowances within the overall system.
JetBlue signs with SG Preston in one of the largest ever airline renewable jet fuel offtake agreements
Tue 20 Sept 2016 – JetBlue has signed a 10-year binding deal with bioenergy company SG Preston in what it describes as one of the airline industry’s largest ever renewable jet fuel offtake agreements. The carrier plans to purchase more than 33 million gallons of blended jet fuel per year over the period. The blend is to be made up of 30% HEFA-derived renewable fuel produced from sustainable non-food plant oils that is targeted to achieve a 50% or higher reduction in greenhouse gas emissions on a per gallon life-cycle basis compared to the fossil equivalent. JetBlue is looking to supply the fuel to New York metropolitan area airports from 2019 and the amount purchased is equal to around 20% of the airline’s annual fuel consumption at New York JFK International. This is a first entry into the aviation market for Philadelphia-based SG Preston, which has ambitions for five 120 million gallon per year renewable jet and diesel facilities in the US and Canada.
“The future of aviation relies in part on renewable energy sources. We’re taking a leadership role in technology and other advancements including renewable jet fuel,” said JetBlue CEO Robin Hayes. “JetBlue is preparing for a world where we must reduce our production of greenhouse gases. With this in mind, we have executed one of the largest renewable jet fuel purchase agreements. This is just one step of many in our work towards a lower carbon future.”
The HEFA (hydro-processed esters and fatty acids) fuel is expected to meet the Environmental Protection Agency’s (EPA) qualification for renewable fuel standards, as well as the Roundtable on Sustainable Biomaterials (RSB) certification standard for sustainable production of biofuels. In June, JetBlue became the first US airline to join the RSB (see article). The HEFA-SPK fuel to be produced by SG Preston was approved by fuel standards body ASTM International for commercial airline use in 2011 and to date has been used to power more than 2,200 revenue flights by 22 airlines.
In 2015, JetBlue signed a White House climate pledge to reduce emissions from commercial air travel and last year began actively exploring the potential to purchase renewable jet fuel. The deal with SG Preston is the largest long-term binding commitment by any airline for HEFA-based jet fuel, it claimed.
“This is the first of many steps towards a slowly evolving change,” said Hayes. “With our partner, SG Preston, we are pursuing renewable jet fuel production from feedstock systems with the ability to lower CO2 emissions by 50% or more per gallon before blending. This is a proactive step to address customer demand and protect our business and the future of our industry.”
Founded in 2012, SG Preston says it is not a technology company but instead relies on licensing technologies proven at commercial scale “and backed by significant balance sheet guarantees.”
It announced in October 2015 the signing of a multi-facility programme with a Houston-based engineering, procurement and construction subsidiary of IHI Corporation for series of commercial volume, advanced biofuels manufacturing plants, initially in the US Midwest and Canada.
“The plants will use proven, commercial-scale technologies for the production of renewable diesel and jet fuel targeting US and global industries seeking a volume-based, competitively-priced solution to their environmental sustainability mandates,” said the company, which is looking at building five plants initially, each producing 120 million gallons of renewable fuel per year. It added it would provide “immediate partnering solutions to the global aviation industry, with targeted, competitive value-added market offerings.”
Commenting on the JetBlue agreement, SG Preston founder and CEO Randy Delbert LeTang said: “This strategic relationship with JetBlue is a continuation of our commitment to develop reliable products from renewable resources at commercial scale and volume for stakeholders who recognise renewable fuel has transcended buzzword status and is a critical component of responsible growth. Our strategy is to address demand versus supply gaps in the industry and align development and delivery mechanisms to meet our customers’ demand in the least disruptive way.”
The offtake agreement was welcomed by the wider aviation sector. “JetBlue is joining a group of industry-leading airlines which are taking the bold, but smart choice to put themselves at the forefront of our sector’s climate action. They should be warmly congratulated for making that choice,” said Michael Gill, Executive Director of the cross-industry Air Transport Action Group.
“Following eight years of exhausting testing and certification processes, in February this year Oslo Airport became the first to supply airlines with alternative fuels for regular daily flights. Los Angeles soon followed and today’s news will ensure that JFK and other New York airports also come on stream from 2019. The industry anticipates further similar announcements in the near future.
“The airlines that have signed substantial offtake agreements on alternative fuels are helping the whole industry by kick-starting this move to renewable energy.”
Added Nancy Young, VP Environmental Affairs for trade group Airlines for America (A4A): “With this announcement, US airlines continue to lead the way to a more secure and environmentally friendly future. Sustainable alternative aviation fuels help our members build on their already strong environmental record and help reduce price volatility and enhance energy security by providing a competitor for petroleum-based jet fuel.”
Other A4A airline members in the US that have purchase agreements in place for alternative fuels include United, FedEx, Southwest and Alaska, with United already receiving supply for aircraft operations at Los Angeles International.
JetBlue – Sustainability , SG Preston – Aviation
Paris high ambition countries call for urgent action on aviation emissions and a robust global carbon scheme
Mon 19 Sept 2016 – Members of the High Ambition Coalition, which played a pivotal role in the successful outcome of the global climate negotiations last December that resulted in the Paris Agreement, have joined forces to call for urgent action to curb the growth of emissions from the aviation sector. Representing both the developed and developing world, Mexico, the Marshall Islands and the European Union have issued a joint statement saying it was “time for us to make history again” and for countries to work to secure an ambitious and robust global market-based measure (GMBM) at the forthcoming ICAO 39th Assembly. It was crucial there was a broad participation of countries in the scheme, they said, and the widest possible emissions coverage. However, another key member of the Coalition in Paris, Brazil, has indicated it is unlikely to join the voluntary phase of the scheme (2021-2026) as it did not produce enough emissions to justify doing so.
The statement by the three High Ambition Coalition members, which was signed by EU Commissioner for Transport Violeta Bulc and EU Commissioner for Climate Action & Energy Miguel Aria Cañete on behalf of the European Union, said in order to meet temperature limits set in Paris and the long-term goal to reach net zero emissions in the second half of the century, action must be taken to curb aviation emissions.
“In order for us now to achieve ‘our Paris vision’, we need to ensure we all fully play our part, including every country and every sector,” they said. “We are now at a critical moment and, for the first time, we can secure a global sectorial deal for aviation.”
To ensure the scheme met its objective of carbon-neutral growth from 2020, they called for States, particularly those with major aviation sectors, to participate in the scheme from the beginning, “and to declare their intention to opt in as soon as possible, and no later than the Assembly.”
Other requirements for the scheme’s design, they said, should include a robust review mechanism that would adapt ambition in line with wider climate objectives and the Paris long-term temperature goals, and the use of carbon offsets with environmental integrity, the supply if which could come from the least developed countries. To ensure a fair agreement, routes to and from countries with a very small share of global emissions should be exempted, a provision already in the draft Assembly text. These are classified as Small Island Developing States (SIDS), Least Developed Countries (LDCs) and Land-locked Developing Countries (LLDCs).
Under this criterion, the Marshall Islands, a Pacific Island state at threat from rising seas levels, would be entitled to a permanent exemption as a SID state throughout the intended 15-year duration of the ICAO scheme. However, the country’s Minister for Transport, Mike Halferty, said in a statement: “Provided ICAO adopts an ambitious resolution guaranteeing environmental integrity and ensures there is a mechanism to regularly review and ramp up ambition, the Marshall Islands intends to be involved from the beginning.
“It is critical others now follow our lead and pledge to join the new scheme from the start, particularly those which can help ensure the greatest coverage in emissions. There is no point in having a patchwork of ambition. The very survival of our country depends on this.”
According to a report in Climate Home, the President of the Marshall Islands, Hilda Heine, believes other Pacific Islands may support the ICAO scheme from the beginning.
The republic’s former Foreign Minister and now Ambassador for Climate Change, Tony de Brum, was an architect of the High Ambition Coalition and is a strong campaigner for action on aviation and shipping emissions.
Another classified as a SID state, Singapore, is the latest to submit an official declaration to join the ICAO scheme, bringing the number to 51 ICAO Member States currently listed on the ICAO website.
However, it appears that Brazil, a member of the High Ambition Coalition in Paris, will not join the scheme in the voluntary phase. Although the country is one of the world’s fastest growing aviation markets, Bloomberg reports the Director of the National Civil Aviation Agency (ANAC), Ricardo Fenelon Jr, as saying it does not produce enough emissions to justify participating. Other developing countries should follow Brazil’s lead, he advised.
China has signalled its intention to join the scheme, but with Brazil seemingly not opting in from the start, there will be a focus on the intentions of the other BRICS members – Russia, India and South Africa. Although far from being the biggest in international aviation traffic terms, the loss of both Russia and India from the voluntary phase would be a blow for the scheme. Brazil and South Africa are also important and growing markets, as well as regional leaders, points out Dan Rutherford of the International Council for Clean Transportation (ICCT).
If the top 20 countries by international traffic all opted in to the scheme and other 171 smaller ICAO Member States did not, ICCT estimates around 60% of traffic growth would be covered. Rutherford says key countries that are required to reach this coverage and have yet to declare – in addition to Russia and India – are UAE, Qatar, South Korea, Japan, Thailand and Australia.
Update September 20:
Japan has today indicated its intention to participate in the GMBM from 2021.
Update September 23:
The ICAO website reports Malaysia, Kenya and the United Arab Emirates have also now indicated that without prejudice to the Assembly outcome they will join the voluntary phase from 2021. New Zealand's Transport Ministry has also announced today they will participate in the voluntary phase, “provided other developed countries and the majority of major aviation states also agree to do so.” This brings the total number of countries volunteering to join the CORSIA scheme from the start to 56.
Environmental NGOs fear voluntary participation in global aviation scheme will undermine carbon neutrality goal
Fri 16 Sept 2016 – Environmental NGOs have expressed strong reservations with elements of the proposed global market-based carbon scheme that will shortly be presented for approval by ICAO’s Member States at their upcoming Assembly that starts on September 27 in Montreal. They fear that relying on voluntary and unguaranteed participation in the initial phases of the scheme and what they see as weak environmental safeguards in the draft text will undermine the principle goal of achieving the carbon-neutral growth of international aviation emissions after 2020 (CNG2020). The level of ambition of the proposals falls well short of the climate commitment required by the global Paris Agreement, they argue, and have set out a number of measures that should be taken to strengthen the scheme’s environmental integrity.
As members of the International Coalition for Sustainable Aviation (ICSA), which has observer status at ICAO, the NGOs are fighting a campaign – FlightPath 1.5 – to ensure aviation contributes its fair share to the aspirational goal reached under the Paris Agreement of limiting the global temperature increase to 1.5⁰C above pre-industrial levels.
Lou Leonard, SVP Climate and Energy for WWF-US, told journalists yesterday in an ICSA media briefing that by not addressing international aviation in the Paris Agreement it had left “a gaping emissions hole big enough to fly an aeroplane through.” Without concerted action, he said, emissions from air travel are forecast to triple by 2050, consuming around 27% of a global 1.5⁰C carbon budget. The ICAO global market-based measure (GMBM) would be the world’s first sectoral scheme to cap global emissions and had great significance if countries could take it forward, he suggested.
“As the Assembly only meets every three years, we have to seize this opportunity,” he said. “It will be a litmus test for governments to show they are interested in not just showing up in meetings to sign the Paris Agreement but are actually willing to implement it and to take up those missing pieces that were not resolved in Paris.”
It was important to ensure that any ICAO agreement on the global scheme was ambitious, had the maximum coverage of emitters and aligned with the Paris goals, he added.
However, ICSA is concerned with recent developments on the proposal, which has switched from a mandatory scheme to a voluntary opt-in approach for the first six years (2021-2026). Another new addition to the text of allowing States to opt out of the scheme with just six months’ notice raised serious concerns about its durability, it said, and is calling for removal of the provision.
“The cost and environmental effectiveness of MBMs depend on predictable demand for, and supplies of, quality emission reductions. Investment in these, in turn, depends on consistent participation by governments,” ICSA said in a statement. A simple mechanism allowing countries to opt out at short notice would create competitive distortions and uncertainty for industry, it foresees.
ICSA is also calling on States to include essential safeguards into the text, such as a clear prohibition of emissions double-counting, and removal of text that seeks to prevent States from developing their own market-based measures. “States or groups of States always have the freedom to enter into more ambitious international arrangements,” it said. “The ICAO MBM should not interfere with this settled principle of international law.”
The NGOs are also pressing for a strong review clause that ratchets up ambition in line with Paris and text that provides a solid basis for the use of high-quality offsets and alternative fuels.
“If we see some of these elements that we are calling for are missing, it will be hard for the environmental community to embrace this agreement with completely open arms,” said Kelsey Perlman, Policy Officer with Carbon Market Watch.
With uncertainty now over the scheme’s emissions coverage as a result of the proposed voluntary approach, ICSA is calling on States to publicly affirm by the end of Assembly that they will participate in the scheme from the start in 2021.
“The text we have now means we are well off track to achieve the sector’s target of offsetting carbon emissions above 2020 levels,” said Perlman. “It has a lot of compromises, which is beneficial for reaching consensus, but has produced many new uncertainties and left a lot of problems unsolved. It also stipulates that those who do opt in will not be responsible for offsetting the rest of emissions from States that choose not to, which effectively undermines the CNG2020 goal.”
Annie Petsonk, International Counsel with the Environmental Defense Fund, said the emissions gap during the period of the scheme, which is designed to finish in 2035, is forecast in the region of 6 gigatonnes (Gt). About a third of a gigatonne could be reduced through the new ICAO aircraft CO2 standard and a little over a gigatonne could be saved from operational improvements, with just over 1.5 Gt coming from other technological developments. The remaining 3 Gt would therefore have to be addressed by the GMBM and, potentially, sustainable alternative fuels, she said.
Preliminary analysis of those countries who have already signalled their intention to join the scheme shows that around 2 Gt of this remainder could be offset through the GMBM as currently designed, said Petsonk. “This is a sizeable chunk of emission reductions but more still needs to be done and we need more countries to participate.”
Petsonk expects that although the number of countries that have publicly indicated a willingness to participate in the scheme from the beginning on the back of the current proposal is growing, there will still be efforts by some States to strengthen the text and by others to weaken it. “We don’t know how those pulls are going to balance out and we will have to wait until we get into the Assembly process to find out,” she said. “We have to hope that this pushing and tugging over the text does not destabilise the negotiations and cause them to fall apart. With the spotlight on it to deliver this agreement, it would be a black eye for ICAO if this was to happen. There is though a lot of momentum to keep this deal together.”
LanzaTech achieves breakthrough with first batch of sustainable jet fuel to be produced from ethanol
Wed 14 Sept 2016 – Alcohol-to-jet (ATJ) fuel developer LanzaTech has succeeded in producing a batch of 1,500 US gallons of low carbon jet fuel from its ethanol product, which will now be used for additional testing as part of the ASTM fuel certification process required for commercial aviation use. The Chicago-based company and its partner Virgin Atlantic are working with Boeing, aircraft engine manufacturers and others involved in the process towards approval now anticipated in 2017, which would include a proving flight using the fuel. LanzaTech’s technology captures waste carbon monoxide gases emitted from steel production plants and converts them into ethanol through fermentation, which can then be used as a feedstock for a variety of products, including aviation fuel. The Lanzanol batch was produced at a facility in China and shipped to the US, where it went through a final conversion to jet fuel by the US Department of Energy’s Pacific Northwest National Laboratory (PNNL).
Converting a gallon of ethanol produces half a gallon of jet fuel, and LanzaTech estimates its technology could be retrofitted to 65% of the world’s steel mills, which collectively produce in the region of 1.7 billion tonnes of steel each year. The waste gases produced through the chemistry of steel making offer the potential to produce 30 billion gallons of ethanol worldwide annually. If converted into jet fuel, this could produce nearly a fifth of total global aviation fuel use of around 80 billion gallons, says the company.
Virgin Atlantic conducted the world’s first biofuel flight in early 2008 and its partnership with LanzaTech to develop a commercially viable low carbon jet fuel goes back to 2011 (see article).
Commenting on the breakthrough, the airline’s President, Sir Richard Branson, said: “This is a real game-changer for aviation and could significantly reduce the industry’s reliance on oil within our lifetime. We chose to partner with LanzaTech because of its impressive sustainability profile and the commercial potential of the jet fuel.
“Our understanding of low carbon fuels has developed rapidly over the last decade, and we are closer than ever before to bringing a sustainable product to the market for commercial use by Virgin Atlantic and other global airlines.”
Although the ATJ isobutanol pathway developed by Gevo was certified by ASTM in April in blends up to 30% (see article), LanzaTech’s ethanol to jet fuel product requires a separate approvals process. Virgin Atlantic reports the ATJ fuel has now passed all its initial fit-for-purpose performance tests “with flying colours” and the data will shortly be shared with aircraft and engine manufacturers, as well as other parties, as part of the next stage of the approvals process. In addition to being used for the proving flight, the fuel batch will provide sufficient quantities for further testing if required.
A further 2,500 gallons of ethanol has been purchased from a third party that has also been converted into jet fuel to back up the testing process.
The two partners point to initial independent analyses by international renewable energy consultants E4tech and Ecofys, and also Michigan Technological University, which suggest the fuel could result in lifecycle carbon savings of 65% compared to fossil jet fuel.
The ethanol was produced at the joint venture Beijing Shougang LanzaTech New Energy Science & Technology Company facility. In 2013, it became the first biofuel plant in China to be certified by the Roundtable on Sustainable Biomaterials (RSB) and the first of its kind anywhere in the world to receive certification for industrial carbon capture and utilisation (see article).
“Our partnership with LanzaTech symbolises Shougang’s desire to create a sustainable future for China where industrial growth and environmental benefits go hand in hand,” said the facility’s Chairman, Wang Tao. “Ethanol made from recycled carbon in China can now be used to fuel a plane in the United Kingdom, using technology from the United States. We are honoured to be part of this truly global partnership to provide new sustainable pathways for low carbon fuels that do not impact the food chain or land use.”
John Holladay, Transportation Sector Manager at Washington State-based PNNL, described the LanzaTech waste gas to jet fuel process as “almost magical”.
“Our long-term dream is making fuels and chemicals through recycling carbon,” he said. “PNNL is proud to be involved with the project through bringing catalyst technology that builds on LanzaTech’s fermentation technology and we look forward to seeing the technology powering jets in the near future.”
Commercialisation of the LanzaTech jet fuel product will begin once it has become certified for commercial aviation use. Although various options are currently being explored, Virgin Atlantic expressed hope that with sufficient government policy support and financial backing, the first LanzaTech jet fuel plant would be built in the UK. Funding for the production of the jet fuel batch came as a result of support from HSBC, the UK’s largest bank.
“We are proud to have provided support and funding to allow production of this innovative new fuel to move from sample size to small demo scale,” said HSBC CEO Antonio Simoes. “This breakthrough is testament to what can be achieved when different industries work together to address climate change and support the shift to a low-carbon economy.”
In other reaction, Peter Bakker, President of the World Business Council for Sustainable Development, said the venture demonstrated the innovative business leadership that the post-Paris world urgently needed. “Under the below50 sustainable fuels initiative, we look forward to more ground-breaking collaborations between investors, producers and consumers that will help scale up solutions to decarbonise the transport sector.”
Added James Beard, Climate and Aviation Specialist at WWF-UK: “Decarbonisation of heavy industry and aviation will be difficult, which makes converting industrial waste gases into low-carbon jet fuel a fascinating prospect. All airlines should pursue the development of genuinely sustainable, low-carbon fuels that are certified to minimise indirect land use change. UN aviation agency ICAO – meeting later this month in Montreal – needs to incentivise investment in sustainable solutions through the setting of global sustainability criteria for low-carbon aviation fuels, credited towards its climate goals.”
In June, WWF published a report based on research by the Stockholm Environment Institute that found there would be a sufficient supply of both sustainable alternative fuels and high-quality carbon offsets to meet the ICAO carbon-neutral goal from 2020 out to 2035.
KLM and Lufthansa sign long-term agreements with US sustainable biofuel producers AltAir and Gevo
Mon 12 Sept 2016 – European airlines KLM and Lufthansa have each signed agreements with US biofuel companies for supplies of locally-produced sustainable fuels. KLM has agreed to purchase through a three-year offtake agreement an undisclosed quantity of used cooking oil based fuel produced by AltAir and supplied by Amsterdam-based SkyNRG. The fuel will be used on all KLM flights departing from Los Angeles and will be delivered to aircraft through the airport’s hydrant system. Gevo, meanwhile, has entered into a non-binding heads of agreement with Lufthansa to supply up to 8 million gallons annually of alcohol-to-jet fuel over a five-year period once its intended first commercial-scale facility in Minnesota is up and running.
The price differential between the cost of AltAir’s fuel and that of traditional kerosene is being covered through KLM’s Corporate BioFuel Programme in which large organisations pay a fixed supplement to ensure sustainable biofuel is used for a portion of their air travel. Participants include ABN Amro, Accenture, Heineken, City of Amsterdam and the Schiphol Group. The biofuel flights from Los Angeles are expected to contribute to KLM’s ambition of achieving a 20% reduction in CO2 emissions per passenger by 2020, compared to 2011.
“Sustainable biofuel is currently one of the most effective ways to reduce CO2 emissions in the airline industry,” said KLM CEO Pieter Elbers. “Owing partly to the companies taking part in the programme, we have been able to take this step, giving a further impulse to the consistent production of biofuel.”
AltAir is the first – and currently the only – bio-refinery in the world with a production capacity dedicated to sustainable jet fuel. In March this year, United Airlines started using AltAir fuel on regular flights from Los Angeles to San Francisco (see article). The airline has agreed to purchase up to 15 million gallons from AltAir over a three-year period, a quantity sufficient for around 12,500 flights on the route.
Commenting on the KLM deal, AltAir Fuels President Bryan Sherbacow said: “This multi-year biofuel offtake is a real milestone for the industry and shows their commitment to making aviation more sustainable.”
Los Angeles will become the world’s second airport to incorporate biofuel blends into its regular refuelling process, following a similar initiative at Oslo that commenced earlier this year, also involving KLM and SkyNRG (see article).
“Only five years after we supplied KLM to operate the first commercial biofuel flight in the world, our launch customer has now signed its first long-term biofuel offtake,” said SkyNRG CEO Maarten van Dijk. “AltAir’s dedicated production capacity marks an important milestone as creating scale is crucial to taking the next step in the development of the sustainable jet fuel market.”
The Gevo heads of agreement with Lufthansa is subject to completion of a binding off-take agreement and other definitive documentation between the two parties, which is expected to be completed in the next few months, according to the Colorado-based ATJ producer. Following certification of its fuel in April, the first commercial flights powered by Gevo's fuel were operated by Alaska Airlines on routes to San Francisco and Washington DC in June (see article). Under the Lufthansa agreement, the fuel would be supplied from Gevo’s first commercial-scale facility that it intends building in Luverne, MN.
The heads of agreement establishes a selling price that Gevo says is expected to allow for “an appropriate level of return” on the capital required to build-out the new facility.
The present Luverne facility has experienced production ramp-up delays of late but the company is expecting that by the end of 2016 to have the capability to be at a production run rate equivalent to 1.5 million gallons per year.
However, in its latest quarterly financial results it cautions: “Although Gevo expects to have this production capability, Gevo currently expects to run at a rate less than 1.5 million gallons per year during 2017 as it scales up and tests new process improvements to further reduce costs and optimise production in general at the Luverne production facility with a view towards significantly expanding production capacity in the future.”
COMMENTARY: The fight must go on to protect the EU’s right to continue with its own aviation emissions scheme
Fri 28 Sept 2016 – Over the next couple of weeks, the United Nations’ International Civil Aviation Organization (ICAO) will be holding its 39th Assembly in Montreal. One of the key items up for discussion/agreement/stonewalling (take your pick!) is the development and implementation of a Global Market Based Measure (GMBM) to try and control and reduce civil aviation’s growing use of fossil fuel via the use of a price mechanism that includes the cost of CO2 emissions in airline ticket prices – the practical embodiment of the ‘polluter pays’ principle, writes Jeff Gazzard.
Why is this important? GreenAir Online readers, policymakers and those with an environmental responsibility across all sectors of the aviation industry, finally realise that the huge and continuing growth of flight kilometres, based on the consumption of ever-increasing volumes of tax-free kerosene as a fuel, produces a significant climate change impact.
All forecasts from every source that I have monitored in recent months confirm that aviation emissions will put global climate change targets, whether they be 2 degrees or the recent Paris UNFCCC agreement for a lower 1.5 degree limit, at risk. I am not going to look in any great detail at the figures as, frankly, they speak for themselves. At least the days of the industry’s strategy of “deny, delay and minimise” as a global corporate response to real and proven scientific, environmental NGO and enlightened policymaker concerns are taking a back seat. Hopefully, right at the back, cramped up against the rear bulkhead, by the toilets!
After years of campaigning, policy development, consultations, phoney PR wars and obstructive legal action, the European Union and its parliament voted in July 2008 to extend the EU Emissions Trading Scheme (EU ETS) to aviation. The vote was carried by 640 votes to 30. In my view it wouldn’t have been possible to have sent a stronger message to the entire aviation industry that the game was up!
With free allowances, complex MRV arrangements, reasonable quality carbon credit availability, all-outgoing flight coverage, new entrant capacity, significant penalties for non-compliance, permanent review and policy development/revision opportunities, open public access to performance reporting and with both Parliament and the European Commission’s (EC) Climate Action Directorate General willing to engage positively with all parties, the policy was a model framework. Not perfect, but capable of producing something workable and potentially toughened over time.
Of course, those paragons of accepting the will of the European Parliament – the global aviation industry – predictably went collectively nuts at this perceived threat to their very existence, mounting an even more aggressive campaign in what to date has proved an overall futile attempt to destroy the Aviation EU ETS.
Industry did however manage to get the scheme partially rolled back to cover intra-EU airspace emissions only by IATA developing and promoting its own parallel universe project, Carbon Neutral Growth from 2020 (CNG 2020). This claimed that a combination of measures – technology gains, increased load factors, better ATM and flight operations, plus the aviation alternative fuels/biofuels mirage – would just leave a small amount of CO2 emissions that could be mopped-up by voluntary purchases of low-quality (but cheap!) offsets.
Successful lobbying of civil aviation regulators and transport ministries globally achieved IATA’s goal – supported incidentally by all other aviation trade associations – of transforming their CNG 2020 outline into hard ICAO policy. This neatly puts control of targets, pricing, MRV and everything else, including, funnily enough, disbanding regional schemes (i.e. the Aviation EU ETS), firmly in the hands of what can only be described as an overly bureaucratic, slow, cumbersome and most importantly, entirely producer-captured body that dances (sadly and badly, rather like your Dad!), entirely to the aviation industry’s tune.
The EU’s olive branch offer to compromise on flight coverage, the so-called ‘Stop the Clock’ option, was and is conditional upon the ICAO GMBM project coming into force with a target outcome and components at least as effective as the Aviation EU ETS, plus with the bonus of global airline participation. Otherwise, what’s the point?
Let’s be clear: the entire industry despises the EU emissions scheme precisely because the free allowances will likely disappear over time, the cap will tighten and the unit cost of both carbon allowances within the scheme and their supply will likely rise and tighten too. The involvement of environment ministries means the industry’s symbiotic relationship with transport ministries and aviation regulators is also significantly watered down. The IATA/ICAO CNG project is simply a fig leaf of business-as-usual greenwash.
So where does this leave the EU scheme and the need for an environmentally effective response to aviation’s CO2 emissions? Here are my thoughts on the desired outcome from a European viewpoint:
- Europe, in the form of a tough uncompromising alliance of the EU/EC, the four-person MEP ICAO Assembly delegation and European Member States, along with global environmental NGOs and those countries most at risk from climate change impacts, must come away with the EU’s right to keep the Aviation EU ETS intact.
- By all means continue to work through ICAO on the GMBM but acknowledge this is not at all acceptable as it stands. Indeed, there really isn’t a complete, comprehensive policy on the table right now, more a fabulous wish-list.
- Recognise that the “up to 80%” coverage figure quoted is not 80% of emissions but just future growth beyond a contrived baseline of a 2020 start and therefore unacceptably low. It also excludes approximately 40% of worldwide aviation emission as it doesn’t cover domestic emissions at all.
- Current discussions of offset quality are simply not a serious policy outcome.
- The degree of exemptions proposed are contrived and unacceptable.
- The industry cannot be trusted to develop a 1.5 degree compliant policy and indeed most importantly for a UN body, ICAO cannot and should not sign up to a policy that fails to meet the Paris goal, as this proposal singularly doesn’t.
Two weeks from next Tuesday, when the Assembly starts, is a long time to expect anybody to hold their breath in anticipation that the Assembly will transform IATA’s ‘CNG from 2020’ project into a Paris 1.5 degree compliant policy to control and reduce civil aviation’s CO2 emissions. So I won’t be. But I do expect the EU to return from Montreal with the right to continue with its scheme – the fight will then go on.
Jeff Gazzard co-ordinates the European GreenSkies Alliance (GSA) network, which is involved in grass roots campaigning, policy development and international advocacy to control and reduce the negative environmental impacts of air transport. He was the co-rapporteur of a task force developing a set of environmental indicators for aviation within the 41-country intergovernmental European Civil Aviation Conference, with which GSA has Observer status. Jeff is an advisor to the WHO on transport, environment and health issues, and is also the policy advisor to the UK All-party Parliamentary Sustainable Aviation Group of MPs. Until recently, he was a Board Member of the Aviation Environment Federation.
NEW BOOK: Climate Change Governance in International Civil Aviation: Toward Regulating Emissions Relevant to Climate Change and Global Warming
By Tanveer Ahmad
Successful climate change governance in international civil aviation has yet to be achieved. In this book the author argues that to effectively govern emissions from international civil aviation of relevance to climate change and global warming, binding legal measures – whether de facto or de jure – and a mandatory but temporary global market-based measure, or unilateral market-based measures of the same model adopted by economically powerful States, for international civil aviation are immediately required. The book demonstrates how de jure soft law instruments, for example Annexes to the Chicago Convention, international environmental law principles, a new understanding and way of exercising the doctrine of State sovereignty, together with multilateral and unilateral economic instruments, can be utilised to reduce aviation’s environmental impacts. The author explores the existing capacities of the governance actors in aviation and shows how they can play a significant role in climate change governance from within their limited capacities.
About the author:
Dr Md. Tanveer Ahmad is currently Assistant Professor at the Department of Law, North South University, Bangladesh. He earned his Doctor of Civil Law and Master of Laws from the Institute of Air & Space Law, McGill University, Canada. While at McGill, he held, among others, the Assad Kotaite Fellowship of ICAO and the Boeing Fellowship in Air & Space Law. He has authored several book chapters, journal articles and policy papers dealing with aviation environmental law issues.
Eleven International Publishing, The Netherlands
Published: September 2016
ISBN 978-94-6236-692-3 €90 / $135 / £83
For more information and to order online, click here