Government v. airlines as the next step for biofuels

Juncea.JPGOne possible bio-derived jet fuel option: juncea.

The series of bio-derived jet fuel demonstration flights that commenced in 2008 with Virgin Atlantic and later Air New Zealand left no doubt biofuels could be a reality in aviation, and the flights helped start the biofuel certification processes.

As certification is now expected imminently, there is a debate emerging over what the next step should be.

If you’re a government, you would follow US Representative Jay Inslee of Washington’s view that airlines need to establish supply chains with feedstock farms to start the commercialization of biofuels. As he told Platts: “We know this works; we know we can fly airplanes. We’ve flown 747s; we’ve flown F-18s.”

Airlines and supply chains agree that is a step, but not the next step. First they want the government to kickstart commercialization via funding and other financial means of support. They argue the investment risks are too high for them to swallow and if government funded biofuels, there would be large economic gains for the country. For that, see the recent CSIRO report that delivered a roadmap for the commercialization of biofuels, and a similar push underway in Germany. The first step?

The report says that now that the technical and commercial viability of biofuels is proven, “it is appropriate to take stock and review the range of government support mechanisms available.” Although it noted that such a review was outside its scope, it added: “Mechanisms that directly target early stage commercialisation of the supply chain will be of most value as this is a priority for the sector.”

Algae fuel.JPGAlgae is also a likely biofuel option, but not in the short/medium-term.

The airlines delivered their verdict too. Here’s Qantas head of risk and resilience John Valastro: “The government has said that it will back sectors that have the potential to create green jobs that help move Australia to a low-carbon economy. The report we’re launching today clearly shows that aviation, through the use and development of sustainable aviation fuel, has the potential to be one of those sectors.”

And Virgin Australia corporate advisory executive Merren McArthur: “None of us can solve this problem alone. Developing sustainable aviation fuel involves significant investment and research development. The solution will only be found through industry-wide initiatives and government support.”

The report was a long-winded but substantiated argument for government to fund biofuels. Although a number of other steps were included on the roadmap–contract purchasing, infrastructure integration–the stakeholders knew those steps. Including them sends a message to government the industry has a plan and any funding received will not entail a large check with no destination or oversight, unlike the recent housing insulation initiative.

The CSIRO report eagerly touts economic gains of a biofuel industry: 12,000 jobs, particularly in rural areas along the eastern coast and much of Queensland, where there is potential for sugar to be a biofuel feedstock. Another gain is a potential industry that if some country–ideally Australia in this region–does not become a leader of, with knowledge and skill export capability, another country will be.

Wood chips.JPGSurplus wood chips are also a biofuel possibility.

The CSIRO has fired the biofuel race shotgun, but the bullet will not hit for a while: an initial 500 jobs will be created, rising to 3,500 by 2020, and then 12,000 by 2030. Government is being asked to fund a worthwhile project that will not be realized in their term of office.

Perhaps airlines recognize this uncertainty or maybe they want to further substantiate their intent about biofuels and so have made investments in private projects. In addition to Qantas’ investment in Solazyme and Solena, Virgin Australia is planning its own project. As we reported on our Air Transport Intelligence newswire:

“Virgin Australia is seeking innovative ways to support the scale-up of biofuels and we hope to announce our investment in one of these projects in the coming months,” said Merren McArthur, Virgin Australia’s group executive for corporate advisory.

The airline is finalising an agreement for a land-based project with a “single type of process that can be used right across Australia with a range of feedstocks,” said David White, the sustainability and climate change manager for Virgin Australia.

Virgin expects to soon announce an “aspirational target” of how much renewable energy sources could constitute its fuel needs in the short/medium-term, White said. “We’re a member of IATA now and IATA has a whole of industry target. We support that, but we do have to look at the local context. We may be able to go beyond that. It may be less.”

Like Qantas, Virgin’s partnership will develop the biofuel locally. “[The project] has a strong regional connection in helping regional economies,” White said. “We want to favour local, regional development when possible.”

The project will also refine the feedstock locally, both for to drive a local industry and for logistical reasons.

Virgin airlines–including America, Australia, and Atlantic–are looking to collaborate on a biofuel industry serving their common port of Los Angeles.

One could observe based on the report that airlines now know what it is like to be today’s passenger who desires service frills and a cheap ticket: airlines want biofuels but do not want to pay for them. Or as @enviroaero, an industry-funded group, succintly Tweeted: “Exciting times… We are just a few steps away from biofuels in passenger flights… now for the $$$ challenge!”

Virgin Australia has partnered with Boeing and Australia’s University of Queensland to conduct a lifecycle analysis of locally grown biofuel feedstocks algae, pongamia (above), and sugar as part of its intention to invest in a local bio-derived jet fuel project.

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One Response to Government v. airlines as the next step for biofuels

  1. Allen August 14, 2013 at 9:44 am #

    I hardly drop comments, however after reading through
    a few of the remarks on Government v. airlines as the
    next step for biofuels | Wings Down Under. I actually do have 2 questions
    for you if you don’t mind. Is it just me or does it give the impression like a few of these remarks appear like they are coming from brain dead folks? :-P And, if you are writing at additional social sites, I’d like
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