With Aviation Biofuel Deals on the Rise, Camelina in the Spotlight

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As I wrote last week, aviation demand for biofuels is bursting at the seams.  The trouble is, there are no easy alternatives.  Sustainable, non-food feedstocks like camelina and jatropha are just getting traction and the process of turning algae into fuel is still under development, which leaves few alternatives for the petroleum-dependent aviation industry.

Unlike ground transportation, the key issue for airlines is that they are entirely dependent on liquid fuel, and this — right now — is hurting their bottom line.  According to the Air Transport Association (ATA), the industry trade organization for the leading U.S. airlines, fuel expenses have historically ranged from 10 to 15 percent of U.S. passenger airline operating costs, but averaged more than 35 percent in the third quarter of 2008.

In 2008, every dollar increase per barrel (42 gallons) drove an additional $464M in fuel expenses for U.S. passenger and cargo airlines.  But rising fuel costs aren’t the only thing making business especially difficult for the aviation industry.  Increasing price volatility has made it more difficult for airlines to hedge prices and increases in the crack spreads, a function of refinery capacity representing the difference between jet fuel prices and crude oil, are also necessitating an imminent shift towards integrating renewable “biojet” fuel into the supply chain. When the European Union’s Emissions trading System (ETS) comes online, greenhouse gas emissions regulations will hit airlines with another financial obstacle.

It’s about fuel security and financial viability.

A flurry of supply agreement deals are signaling this reality.  Most recently, the U.S. Defense Logistics Agency’s Defense Energy Support Center and the Air Transport Association of America have signed a strategic alliance agreement for the development and deployment of alternative aviation fuels.  The agreement highlights the two groups’ shared goals to advance the development and deployment of commercially viable, environmentally friendly, alternative aviation fuels.

James C. May, President and CEO of ATA, explains:

The airline industry and DoD collectively require more than 1.5 million barrels of jet fuel per day.

As this figure implies, increasing the supply of biofuels to meet growing aviation demand is no small feat, made increasingly difficult by the logistical challenges associated with ramping up the production of promising fuel feedstocks like camelina (see Camelina Aviation Biofuels: Market Opportunity and Renewable Energy Report).  In theory, demand for biofuels in the aviation sector could be unlimited, but meeting that demand raises many questions about sustainability standards.

As the aviation industry transitions to biofuels, different approaches will be tried to maximize the potential of available feedstocks like camelina.  For example, Great Plains Oil & Exploration – the Camelina Company and Accelergy Corporation have signed an agreement to produce a clean biojet fuel by blending domestic coal and camelina oil by utilizing coal-biomass-to-liquid (CBTL) technology.  The press release from Monday states:

The aviation industry is demonstrating its desire for biojet fuel with the certification of biofuels on regular commercial flights expected in 2012, the Air Force’s target to use 50 percent domestic jet fuel by 2016, and the European Union’s mandate that transportation fuels consist of 10 percent biofuel by 2020, the industry is demonstrating its increasing readiness for biojet.

What are your thoughts?  What technologies or feedstocks show the most promise for bridging the transition for airlines?

Mackinnon Lawrence is editor & publisher of Biomass Intel.

photo: Olastuan

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  • https://sites.google.com/site/brianddolan/ Brian Dolan

    Mackinnon – excellent article. The most intriguing portion of the article was your observation that the entire airline industry operates on liquid fuel. I am curious if you have seen example of other power sources being utilized or developed. I recently watched a TED presentation about a single-person aircraft fitted with enough Solar PVs & batteries to fly around the world (in theory at least). Have you come across any other similar alternative energy sources for aircraft?

  • Tom Saidak

    The one technology I am not seeing is TDP/CDP. Both technologies can turn out kerosene using garbage of most any sort has long as it is either hydrocarbon or carbo based. With the US at 6% or so of fuel going to aviation, we have enough waste to supply 100% of Aviation needs using such technology. The beauty of it is that this can be deployed in 3rd world or developing countries where trash or sewage management is a problem. CWT (Changing World Technologies) reported that when they had to pay $35/ton for the feedstock, they needed $80/bbl equivalent to make a profit. If deployed to use materials people have to pay to have hauled away, such as trash or sewage, then profitability can be achieved at around $60/bbl equivalent. These processes all produce distillates other then kerosene, but that can be used for ground operations or sold to others.

  • http://cleantuesdayparis.fr/ Cleantuesday

    Pour la premiere fois en France un evenement Cleantech Micro Algues – Biofuel

    Avec les start ups americaines Planktonix et Algaesystems, la start up francaise BBTEK et plusieurs autres start ups et grands groupes

    Mardi 6 avril – 18H30 – 22H

    La Cantine Numerique, Passage des Panoramas, 151 rue Montmartre, 75002 Paris

    For the first time in France a Cleantech event: Micro Algae – Biofuel. With several French and American start ups and a world leader:

    http://cleantuesdayparis.fr/event/cleantuesday-micro-algues-bio-fuel

  • Nicolae Pacurar

    The priciple of burning (no matter what) is wrong .

    Aviation Biofuel is only a step on a long way.