Sustainable aviation fuels have been under the spotlight again this year, when the landing of another biofuel powered flight marked the start of September’s UN Climate Summit. But with scarce investment and limited legislative incentives, it’s a chicken-and-egg conundrum, reports Rachel England
Biofuels face a chicken and egg situation currently

A headline grabbing moment—2014’s UN Climate Summit was reported to be the first time since 2009 that world leaders had met to discuss climate change. And to mark this occasion in New York last September, a flight. But not just any flight. One fueled by recycled oil, made in part from the same type of oil used to fry fish and chips.

Of course, using biofuel to power airplanes is by no means a new concept, but it is a technology that remains consistently at the forefront of the aviation industry’s drive to reduce airplane emissions. While perhaps not as novel and attention-grabbing as the Centre for Process Innovation’s proposal for weight and carbon emission reducing windowless aircraft, biofuels are a major player in the drive to hit the industry-agreed target of a 50% reduction in CO2 on 2005 levels by 2050.

IATA believes that by 2020 we could see 3%–4% of fuel comprised of second generation biofuels, which is made from biomass, agricultural residues or waste, rather than from the oil crops used for first generation biofuels. Meanwhile, E4Tech’s study Sustainable Aviation Fuels—Fuelling the Future estimates a potential global supply of up to 13 million tonnes of sustainable aviation biofuel by 2030—equivalent to savings of 35 million tonnes of CO2. All in, sustainable biofuels could bring an 18% reduction to the carbon savings mix by 2050, according to the report, “subject to appropriate support”.

But it’s this “appropriate support”, and the uncertainty surrounding what that actually entails, that is problematic. While sustainable aviation fuel is not yet in mainstream use, the first successful test flight took place in 2008, and the first biofuel powered commercial flight took place in 2011. Six years, and a number of awareness raising exercises at UN Climate Summits later, is any meaningful progress being made?

“What we have is a chicken-and-egg situation,” says Saija Stenbacka, VP Quality, Safety and Environmental Management at Finnair, the airline responsible for the biofuel powered Helsinki to New York flight at the 2014 UN Climate Summit. “There needs to be the infrastructure to support a sustainable biofuels industry, but without investment there’s no infrastructure.

“There’s no investment because it’s still an emerging market and there are lots of associated risks,” she says. “It’s difficult to prove to investors how viable biofuels are because at the moment the fuel is much more expensive than traditional fuel, due to the fact that there’s no infrastructure to bring costs down, so there’s no uptake, which increases the risk. It’s a vicious circle.”

Investment in infrastructure

Bridging the gap between the demonstration stage and commercial roll-out, known widely as “the valley of death”, presents several challenges. Investment in infrastructure is one of the biggest.

“Biofuels are an expensive niche product, so airlines can’t afford to buy large quantities,” explains IATA Assistant Director for Environment Technology Thomas Roetger. “So producers are seen as high risk in the short-term market, and therefore there’s no investment in the larger production factories needed to bring the cost down.”

“Nevertheless we are seeing progress. There’s investment from airlines in the fuels directly, and there’s investment from outside backers in the fuel producers themselves,” he says.

Environmental drawbacks

A backlash against first-generation biofuels has also contributed to the perceived investment risk: biofuels are an environmental win in theory, but, with first generation fuels, production has been shown to displace other agricultural activity if not carefully monitored, posing a significant long-term concern. Second generation fuels, meanwhile, pose greater extraction challenges.

According to a lifecycle assessment by the Yale School of Forestry on the plant jatropha (a tropical drought-resistant, oil-rich flowering plant), just one source of potential biofuels, its use could either reduce greenhouse gas emission by up to 85%, or increase them by 60%, depending on the circumstances in which it’s produced.

The Carbon War Room is working towards breaking the current chicken-or-egg situation facing advanced biofuels companies trying to scale up. Senior Advisor Suzanne Hunt says the initial backlash to first generation biofuels was “well deserved in some cases, and not in others”.

She says, however, that this debate may actually prove beneficial in the long-run. “At least this has brought the complex issues of sustainability to the industry’s attention. Decision-makers are now aware that they must take a holistic view, which will help create a more informed and stronger industry in the long run.”

International political consensus

Still, there’s an underlying atmosphere of wariness, largely compounded by a lack of clear government signals and a dearth of international consensus on how best to incentivize and enable adoption. For biofuels to become more commercially viable in future, they need to be so in all the regions from which airlines will be potentially sourcing and purchasing. What is needed, then, is a harmonized global approach.

But this isn’t the situation currently, with some governments showing greater support for biofuels in aviation than others. Take Europe, for example. Only one of the 28 member states—the Netherlands—has made sustainable jet fuels eligible for the EU Renewable Energy Directive, which imposes an obligation for the transport sector to include 10% renewable energy.

According to IATA’s Roetger, British Airways lobbied the Department of Energy & Climate Change for a similar move in the UK, “but wasn’t successful because oil companies were reluctant to extend biofuel to aviation, a small sector for them but requiring strong efforts. It must be recognized that biofuel production is competition to its core business of oil drilling.”

Government support

Greater government buy-in would help. In the case of Finnair’s biofuels flight to New York for the Climate Summit in September, “the Finnish government gave the flight the go-ahead and commented positively in the press release, so they stood behind us—but not financially,” says Stenbacka. “Stronger government support is needed to achieve these objectives, at least at the start.”

Support for biofuel as aviation fuel is greater in the US and Far East, reports Programme Director at UK Sustainable Aviation Andy Jefferson. “In the States and the Far East there are clearer government signals showing support for aviation fuels, and the UK, for example, needs the same. We need a similar mechanism for aviation fuels.”

Commenting further on the UK, Jefferson adds: “The UK government has started exploring advanced fuels and the role aviation could play in this space, but it’s early days. Clearly, if you want a national policy intervention you need a government to do that and not industry itself.”

Bearing in mind that a global agreement on incentivizing biofuel adoption is really what’s needed, this obstacle of lack of national government support could, in fact, prove to be no bad thing. “In a way, it’s a good thing the government didn’t support us,” says Stenbacka, “because others haven’t either. Legislation, rules and behaviour needs to be harmonized across the world.

“If one country creates its own rules, given the inherent global nature of aviation, it could make it harder for other countries to pursue their own plan.” She adds that biofuels shouldn’t be seen “as a competition between airlines”, but a “common goal”.

Of course, without a more definite, consistent strategy for a more global approach, the industry is reluctant to nail down any tangible targets, for fear of having to revise them if legislation doesn’t support them, and it finds itself amid the chicken-and-egg conundrum once more.

Signs of movement

However, despite the impasse, there are pockets of progress developing around the world. Last year, United Airlines executed a definitive purchase agreement with biofuel producer AltAir, committing to buying 15 million gallons of low-carbon fuel over three years, to be used on flights operating out of Los Angeles International Airport.

More recently, Hong Kong based airline Cathay Pacific negotiated a long-term supply agreement with producer Fulcrum for an initial 375 million gallons of biofuel over 10 years, facilitating the construction of Fulcrum’s first commercial plant and a number of waste-to-renewable jet fuel plants at locations around the Cathay Pacific network.

Although it currently only produces up to 160 gallons a day, Boeing’s dedicated facility in China to turn used cooking oil into sustainable aviation fuel is another encouraging development. And within Europe, a consortium called BioPort Holland, consisting of KLM, Amsterdam Schiphol, sustainable jet fuel producer SkyNRG, and the Dutch government, is working on a central biofuel blend for the common fuel supply system at Schiphol Airport, due to roll out next year.

Also prompting excitement is the recent partnership between British Airways and Solena Fuels, which has committed to building the world’s first facility to convert landfill waste into jet fuel, bypassing many of the issues surrounding land and crop displacement. Approximately 575,000 tonnes of post-recycled waste normally bound for landfill or incineration will be converted into 120,000 tonnes of clean-burning liquid fuel, with 50,000 designated for aviation use, which British Airways will buy each year of the 11-year project.

One-off projects

However, it’s the caveats that make this project workable, says Sustainable Aviation’s Jefferson. “It works economically because the site will make and sell both biodiesel and jet fuel. British Airways has committed to buying the jet fuel, and Solena can sell the biodiesel on the open market, but it’s the combination of landfill gate fees and renewable transport credits that make it economically viable to produce the aviation fuel in the first place.

"It’s a one-off project, but it is scaleable,” he adds, noting, however, that getting to this point has only been possible due to at least one airline buying in to the scheme. “Without interest from an airline, the plant would just produce road fuels,” he says.

“Proactive airlines are getting involved in locking in advantaged access to biofuels now. Sustainable fuels could benefit airlines by providing less volatile pricing, mitigating against future environmental regulations relating to carbon emissions, PR benefits, potentially lower prices, and the opportunity for cost savings over the medium to long term,” says Carbon War Room’s Hunt.

“Every airline is different. Some have really small management teams and just don’t have the resources to get involved with the biofuels conversation, while many of the bigger airlines are simply risk averse. But sitting back and waiting to see what happens may well be more risky because they’re leaving themselves at the mercy of the oil market. It’s in everyone’s best interests to be proactive about developing alternative fuel supplies.”

It may seem odd that the aviation industry is still struggling to lay the foundations for the adoption of biofuels, which have supported other transport sectors for years. IATA’s Roetger notes, however, that there is still cause for optimism.

“In the grand scheme of things, sustainable aviation biofuels is a very young, very niche industry,” he says. “There are many challenges in bridging the ‘valley of death’, but already we’re seeing some successful breakout projects. As initial obstacles are resolved, these projects can and will be replicated all over the world.”