Japan Airlines invests $8 million in venture with US waste-to-jet fuel company Fulcrum
Fri 21 Sept 2018 – Japan Airlines (JAL) has announced a strategic partnership to develop sustainable aviation fuels that will include a 900 million yen ($8 million) investment by the airline in waste-to-jet fuel US company Fulcrum BioEnergy. The other partners include the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and Marubeni Corporation, which will lead the partnership. In early 2009, JAL became the first Asian airline to fly an aircraft powered by sustainable aviation fuel when it undertook a test flight of a Boeing 747 using fuel produced from camelina oil. Fulcrum has already secured investment and jet fuel offtake agreements from Cathay Pacific and United Airlines. In May, it broke ground on its Sierra BioFuels production facility in Nevada, which is expected to start operations in early 2020.
In a short statement, JAL said the commitment to invest in and accelerate the development of sustainable aviation fuel conversion technology was aimed at fulfilling the targets outlined in the company’s Medium Term Management Plan and to actively contribute to the UN’s global Sustainable Development Goals, in particular the goal on climate action.
Fulcrum says the strategic partnership includes a 10-year international project development agreement, a jet fuel offtake agreement and an equity investment in the company.
“Marubeni’s strong global experience and market presence opens up new growth paths for us,” said Fulcrum CEO Jim Macias. “Over the past several years, we have established a strong working relationship with Marubeni and I’m excited about our plans together. Fulcrum’s municipal solid waste (MSW) to fuels process will have an impact on combatting global climate change by providing low-carbon fuel to markets around the world. We will lower carbon emissions from transportation while creating high-paying jobs and driving innovation.”
The two companies say they will jointly develop waste-to-fuels plants in international markets where Marubeni has business and market interests. Included in the development agreement is a project licence that will allow the utilisation of Fulcrum’s patented and proprietary process
Japan Airlines was involved in a government-backed initiative in 2014 to investigate the potential of developing a domestic sustainable aviation fuel (SAF) industry. Over 30 companies and organisations from the airline, aerospace, fuel, engineering, finance and research sectors formed a group called Initiatives for Next-generation Aviation Fuels (INAF) to plan a roadmap that would result in nationally-sourced SAF being available by the time of the next Olympic and Paralympic Games to be held in Tokyo in 2020. All Nippon Airways, Nippon Cargo Airlines, Narita International Airport and Boeing, as well as JAL, were among the INAF members.
A report was subsequently published in July 2015 that identified potential raw material and technology routes that could provide sufficient supplies of SAF over the following five years. Fuel production from municipal waste was suggested by the report as a path along which an early commencement of production and future expansion of supply could be anticipated, based on the quantity of municipal waste available in major Japanese cities.
The report noted, however, the price differential with conventional jet fuel was a major barrier to commercialisation and policy incentives were required as a prerequisite (see article). Since then, INAF activities appear to have ceased.
Cathay Pacific was the first airline to identify the potential of Fulcrum BioEnergy’s municipal solid waste to jet fuel process and made an undisclosed equity investment in the California-based company in August 2014. It also negotiated a long-term supply agreement for an initial 375 million gallons of SAF over 10 years, representing around 2% of the airline’s annual fuel consumption.
United Airlines followed a year later when it took an equity stake in Fulcrum valued at $30 million and both sides agreed to jointly develop up to five projects located near to United’s hub airports that would be expected to produce up to 180 million gallons of SAF a year. Subject to availability, the deal also gives United the opportunity to purchase at least 90 million gallons a year for a minimum of 10 years at a price competitive with conventional jet fuel.
Fulcrum says it is accelerating the development of several projects located in strategic markets across North America and Europe.