Environment - The Growth of Biofuels.
Friday, 14th January 2011
Biofuels offer the greatest hope for aviation to reduce its carbon emissions, savings of up to 80% are on the table if the industry can get it right, however if airlines wait until the price is right and commercial quantities are available, biofuels might never happen.

There are tough challenges to overcome: aside from technical issues, biofuels must be competitive in price and available in quantity. But the difficulties that appear to be holding them back may also contain the solutions necessary to drive biofuels forward.

"Biofuels represent one of the most promising means for the industry to reduce its carbon footprint," says Paul Steele, IATA Aviation Environment Director. "But it's not only about emissions. Biofuels offer opportunities to developing countries to grow new livelihoods and reduce dependency on imported fossil fuels, as well as the obvious benefits to the environment and the industry. These are compelling reasons for governments to get on board."

High energy
One of the perceived technical problems with biomass—the raw material of biofuels—is that it has a low energy density. It was thought that an aircraft filled with a conventional jet fuel would fly a lot further than a plane containing the same weight of biofuel. Test flights have disproved this assumption, however.

In January 2009, a Continental Airlines flight partially powered by algae and jatropha reported a decrease in fuel consumption in the biofuel engine compared with the one running conventional jet fuel. In other words, the energy density of the biofuel was higher than Jet A1 fuel. TAM Airlines, JetBlue Airways, Interjet and Azul are planning further biofuels tests over the coming months. The  work is expected to underscore the substantial gains made by the likes of Virgin Atlantic Airlines, Air New Zealand, KLM Royal Dutch Airlines, United Airlines and Continental Airlines, and vanquish technical hurdles once and for all.

Biofuels will require production to occur locally to ensure maximum efficiency. Because petroleum has a naturally high energy density it can be shipped in large volumes to refineries around the world. Local biomass production would create a new distribution and business model that would bring with it a host of advantages.

For any nation, producing as much of its own energy as possible has obvious merits. "Effectively, what the biofuel industry can offer is increased energy security," says Steele. And infrastructure costs could be outweighed by savings in distribution and the CO2 emissions associated with large-scale shipping.

Endless benefits
The argument for biofuels gets stronger. Despite the rationality of local production it isn't necessarily true that biofuels will only be available in those areas where potential crops—such as camelina and jatropha—are grown. Local feedstocks are widely available. For example, a British Airways initiative will produce fuel from municipal solid waste. From 2014, part of the BA fleet will fly on fuels derived from waste previously destined for landfill. A self ‑contained plant built by the Solena Group will convert 500,000 tonnes of waste into 16 million gallons of green jet fuel each year. BA estimates CO2 savings of up to 95% compared with normal fuel services. This is equivalent to taking 48,000 cars off the road. The project will also generate 1,200 jobs, cut another greenhouse gas—methane—by reducing landfill, and even trim local authority landfill tax bills.

"This unique partnership with Solena will pave the way for realizing our ambitious goal of reducing net carbon emissions by 50% by 2050," says BA CEO Willie Walsh. "We believe it will lead to the production of a real sustainable alternative to jet kerosene."

Furthermore, marine algae—another strong contender for biomass material—has no realistic geographical boundaries. The Sea Green project, run by the Sustainable Use of Renewable Fuels (SURF) consortium, will work to further progress this fuel source in the short term.

There are concerns that areas of Africa particularly suitable for biomass crops may not have the financial and logistical capability necessary for local production. But the potential of a new industry, bringing with it new jobs and new hope for the future, is a strong argument in favor of support where necessary. As IATA Director General and CEO Giovanni Bisignani puts it: "Millions can be lifted from poverty."

Demanding demand
Energy security and new jobs are strong incentives for biofuels development. In this economic environment, however, such ideals must be accompanied by a balancing of the books. In short, there needs to be a demand for biofuels.

The airline industry will provide this; the critical question is when. If airlines wait until the price is right and commercial quantities are available, biofuels might never happen. To kickstart the process, airlines need to buy in early.

It seems a formidable barrier. No airline can afford to overpay for fuel in an industry where profits are small at the best of times. In fact, the issue is proving easily surmountable. Airlines view biofuels development as good public relations. There may even be a return on investment if the airline can pick up extra business based on its green credentials.

A handful of airlines taking this more far-sighted approach may be all the aviation biofuels industry needs to take off. After  all, having biofuels is a bit like offering carbon offsets—and the number of passengers using that option is increasing all the time.

Biofuels will come down in price. With an expansion in production volumes, costs are certain to fall. The International Energy Agency (IEA) suggests that each doubling of the scale of capacity for new energy technologies delivers a 10-20% reduction in unit costs (see graph above).

On top of this, carbon will become increasingly expensive. Fuel costs are expected to remain in a stable band around the $80/barrel mark for 2011, but the IEA and others anticipate an inevitable long-term increase in price. Added to this will be the increasing cost of carbon once emissions trading schemes (ETS) come into play.

Aviation's involvement in the European Union ETS starts in 2012 and, even if the recent ICAO agreement on a global approach to reducing emissions forces a dramatic U-turn, any market-based solution will put carbon prices up.

Getting started
Forecasts predict that aviation biofuels will become economical in about 20 years' time. Government support for the fledgling industry could make all the difference.

The IEA estimates that biofuels will make up about 30% of aviation fuel supplies by 2050. But a report by sustainable energy consultancy E4tech for the UK Committee on Climate Change last year projected a significant improvement on this figure if governments back biofuels and new technologies come into play. Its central estimate for aviation biofuels usage in 2050 was 85%.

At the recent Air Transport Action Group environment summit in Geneva, Doris Schröcker, Policy Officer at the European Commission's Directorate-General for Mobility and Transport, intimated that while there may not be specific aviation policies regarding biofuels, discussions on a more general bio-energy policy are advanced. The US Department of Agriculture (USDA) and the Federal Aviation Administration (FAA) have also stated they will team up with the airline industry to work on developing renewable jet fuel.

There is also potential for collaboration with the automotive industry, which can use certain aviation fuel by-products. Automotive biofuels already receive support worth almost $1 a  gallon in some countries.
"With certification expected within months, distribution and commercialization are the challenge," says IATA's Bisignani. "It is in the self-interest of every government to get much more involved and support the commercialization of biofuels with incentives to facilitate the needed investments."

Regional approaches are likely in the first instance. Biofuels development may proceed better this way and a global approach is already there in the stringent specifications a fuel must meet. Only by meeting these specifications will a biofuel appeal to the global market. Local production being ramped up to meet the needs of a local hub would seem a good starting point.

"The foundations for this new, exciting industry have already been laid," concludes Steele. "What we need now is government action to support and amplify the first moves that have been made. The industry has already demonstrated its commitment to environmental mitigation. Governments must now lend their support with legal and fiscal incentives to turn the biofuel opportunity into a win-win solution for all."

For more information visit www.iata.org/environment
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