Sea-Tac financing initiative aims to provide routine airport-wide sustainable aviation biofuel supply
Mon 31 Oct 2016 – The Port of Seattle has joined with Carbon War Room and SkyNRG to investigate long-term financing mechanisms that could provide a supply of cost-effective sustainable aviation fuels to all airlines serving Seattle-Tacoma International Airport (Sea-Tac). At present, point out the partners, supply agreements in the United States are being made through individual, expensive offtake contracts between biofuel producers and airlines. This new initiative aims to accelerate the transition of sustainable aviation fuel from an alternative product used by a few select airlines to a standard product available to all airlines at an airport, they say. Carbon War Room (CWR), founded by Richard Branson in 2009 and now a business unit of the Rocky Mountain Institute, and SkyNRG see airports as acting as a key orchestrator in the procurement and delivery process. Sea-Tac is currently assessing costs and infrastructure necessary to deliver sustainable aviation fuels to aircraft at the airport.
“The demand for sustainable aviation fuel is there, but right now it is more expensive and complicated to source,” said Port of Seattle Commission President John Creighton. “We want to make it simple and cost-effective for all airlines to access sustainable aviation fuels and ideally create a model that can work for airports around the United States.”
Sea-Tac says it is the first in the world to initiate this step to provide an airport-wide sustainable aviation fuel supply for all routine airline operations. Its operating authority, the Port of Seattle, initiated a $250,000 Biofuel Infrastructure Feasibility Study late last year in partnership with Alaska Airlines and Boeing that is expected to be released in early 2017.
By integrating the fuel directly into the on-airport refuelling infrastructure at an airport-wide blend ratio, CWR and SkyNRG say this standardisation will send a strong and consistent demand signal to the sustainable aviation fuel industry, boost investor confidence and catalyse industry growth.
The two will work with Sea-Tac to evaluate specific funding mechanisms to cover the cost differential between sustainable and conventional fossil aviation fuels. The long-term ambition, they say, includes working strategically with decision-makers regarding locally-sourced fuel and future regional economic investments, identifying supply routes and ensuring any alternative fuels used at the airport are truly sustainable and avoid habitat impact and competition with food.
“The UNFCCC Paris Agreement’s ambition of well-below 2 degrees temperature rise cannot be achieved without the participation of the aviation industry, with its emissions projected to consume approximately a quarter of the world’s remaining carbon budget by 2050,” said Jules Kortenhorst, CEO of Rocky Mountain Institute-Carbon War Room. “The emissions trajectory provides a huge opportunity for market actors to accelerate aviation’s decarbonisation, and in the process, enhance their energy supply chains. These kinds of efforts, alongside ICAO’s global market-based measure, can help the industry reach the goals defined by the Paris Agreement.”
Theye Veen, CFO of SkyNRG added: “Airports are in a unique position, operating at the intersection between airlines, fuel suppliers, governments, passengers and local communities. They are perfectly positioned to support sustainable aviation fuels’ transition from isolated transactions to regular operations.”
Amsterdam-based SkyNRG was formed in late 2009 following a biofuel test flight by KLM, with the airline a founding partner and current shareholder. A corporate biofuel programme was formed to help fund the development of cost-competitive sustainable aviation fuels by enrolling corporations into a scheme which enables employees to partly fly on sustainable biofuel and thereby reduce their CO2 emissions from air travel. Participants pay a fee to bridge the price difference between traditional fuel and purchased RSB-certified sustainable biofuel, which SkyNRG and KLM hope will in turn stimulate production and so lead to eventual cost reductions of sustainable fuels.
Last week, they announced the Dutch Ministry of Infrastructure and the Environment had become the first government office to join the programme.
“We hope that the Ministry’s participation in the programme sends a signal to other parties that the use of biofuel truly does contribute to added sustainability in the airline industry. That might well help to get biofuel production for civil aviation off the ground in the Netherlands,” said KLM CEO Pieter Elbers.