Rose Jacobs, Financial Times
Jeremy Woods, a lecturer in bioenergy at Imperial College in London, has created a chart that describes pathways you might follow if you were working to produce a biofuel. It is a mess of labels and lines, showing a range of feedstocks – from algae to eucalyptus to sugar cane – technologies and possible final products.
“I call it the ‘horrendogram’,” he jokes.
Yet airlines are serious about navigating that maze as they seek to meet environmental targets set out by their main trade body, the International Air Transport Association.
The aviation industry aims to halt carbon emissions growth from 2020 and to halve emissions from 2005 levels by 2050, even as air traffic increases. A significant part of those savings will have to come from carriers switching from traditional fossil fuels to alternatives.
But while the technology is already available in some cases, as made clear by multiple test flights in recent years, a commercially viable synthetic fuel remains a middle to long-distance prospect.
Lufthansa, the only airline with a dedicated biofuels department, ran eight daily commercial flights between Hamburg and Frankfurt for six months last year on a fuel made in part from vegetable oils. Government funding brought down the premium from three times the cost of traditional jet fuel to two times, but Joachim Buse, head of biofuels for the airline, said no rollout is imminent, nor could one happen without board approval.
While most experts predict the biofuel premium will fall as production ramps up, feeding economies of scale, there is uncertainty surrounding the ease with which greater production can be achieved.
Vegetable oils are an expensive feedstock, even those that are not part of the human food chain (which airlines such as Lufthansa now insist upon), while alternative sources such as carbon captured for recycling require processing at hugely expensive plants.
“It’s a chicken and egg situation,” says Mr Buse. “Nobody wants to invest in a refinery as long as he has no security in acquiring sufficient feedstock for his production. But on the other hand, feedstock producers are waiting for someone to come and say, ‘whatever you produce, we will buy it from you’.”For a global industry, the solutions to sourcing are, so far, surprisingly local.
US and Asian airlines are largely focusing on fuels from crops that can be grown domestically, since the land is available, while Qatar Air has explored using natural gas to fuel aircraft, hoping to exploit the country’s vast reserves. Carriers in Europe – where EU regulations have pushed farmers into growing crops for the biodiesel used in surface transport – are looking at a greater variety of feedstocks.
Solena, BA’s main biofuel partner, has recently secured both funding and a site in east London for a plant that would turn household waste into synthetic aviation fuel.
Jonathan Counsell, head of environment at BA, says the flag-carrier’s two main requirements were that the source of its biofuel be sustainable – “we kept away from crops” – and commercially viable. Britain’s high volumes of household waste mean the feedstock meets the first requirement, while the UK’s high landfill tax helps Solena, and therefore BA – which has signed a 10-year agreement to buy the fuel – tick the latter box.
Mr Counsell says the fuel will be cost-competitive with traditional jet fuel at today’s oil price – about $100 a barrel. He expects the plant to fuel BA’s City Airport operations, or about 2 per cent of the airline’s total fuel demand.
US airlines are also signing offtake agreements with a number of biofuel producers, says Christopher Surgenor, editor of Green Air, a website about aviation and the environment. “But they won’t necessarily agree a price in advance.” In fact, he questions the extent to which airlines should be in the business – via partnerships or even offtake agreements – of integrated biofuel production. Instead he points to intermediaries such as SkyNRG and Honeywell UOP, which manage the whole supply chain, buying the biomass in bulk, paying production companies to transform it into fuel and selling that on to airlines.
The oil companies could get involved as they have in biodiesel production, but Charles Cameron, head of technology, refining and marketing at BP, warns they would be reluctant to do so as long as margins were lower for biodiesel and traditional jet fuel. “This is going to require some financial engineering,” he told a green aviation conference late last month.
Dr Woods at Imperial agrees. But while Mr Cameron points to government subsidies and tax structures as the way to bring down the synthetic jet fuel premium, Dr Woods says the solution must be multifarious, including better use of regulation and oversight to spread the burden of monitoring the biofuel supply chain – as well as an acceptance that the supply chain itself needs to draw on a wide range of feedstocks, including controversial sources such as elements of the human food chain.
He believes the industry is at a turning point, where it begins to accept that biofuels are not a simple solution to the problem of emissions. “The airlines are at the point of understanding that what they’re getting is not what’s important, it’s where it’s produced and how it’s produced.” He welcomes that embrace of complexity, as well as the industry’s expanding focus, from biofuels to turbine efficiency and drag reduction.
Mr Surgenor points to other nearer-term opportunities for greener flying, such as rationalisation of air traffic control and new codes of practice for departure and ground operations. As for commercialising aviation biofuels, “while there are promising signs from around the world, beware anyone who predicts when that will be and on what scale”, he says.