Aviation Industry Given Green Light to Use Biofuels Made from Algae, Wood Chips, and Other Plants

Strategic Insights -

For decades, commercial airlines have been waiting for the green light to use biofuels, and that moment finally arrived on July 1, when ASTM International approved the use of blended biofuels in aircraft engines. This breakthrough has the potential to reduce carbon emissions and meet the growing demand for cleaner fuels in the aviation industry. According to Boeing, by 2030, biofuels could make up as much as 30% of the market for aviation fuel.

Key Takeaways:

  • The US Federal Aviation Administration (FAA) has been waiting for the certification of biofuels, which is expected to drive investment in the industry.
  • Airbus estimates that biofuels could make up 30% of the market for aviation fuel by 2030.
  • Boeing estimates that it may take five years for biofuels to become cost-competitive.
  • The aviation industry accounts for about 2% of global carbon dioxide emissions.
  • The European Union's cap-and-trade system for CO2 requires carriers with European routes to buy additional permits if they exceed limits set by the European Commission.
  • Since 2004, the US Energy Department has granted $348 million in loans, grants, and tax exemptions for research centers, fuel producers, and refiners.
  • Major oil companies such as Exxon Mobil and BP are investing in biofuel production, with Exxon Mobil investing $600m in a partnership with Synthetic Genomics.
  • Boeing, Honeywell, and the US Air Force have tested at least 20 different types of biofuels derived from organic waste and plants such as jatropha and camelina.
  • Airbus is building a supply network that includes growers, refiners, transporters, and distributors to bring biofuel to airports worldwide.
  • Neste Oil Oyj, a Finnish oil refiner, can also churn out renewable jet fuel at its four biodiesel production plants.

Statistics:

  • Aviation accounts for about 2% of global carbon dioxide emissions.
  • The European Union's cap-and-trade system for CO2 will require carriers with European routes to buy additional permits if they exceed limits set by the European Commission.
  • The US Energy Department has granted $348 million in loans, grants, and tax exemptions since 2004 for research centers, fuel producers, and refiners.
  • Exxon Mobil is investing $600m in a partnership with Synthetic Genomics to develop a type of algae that produces an oily substance good for burning.
  • Boeing, Honeywell, and the US Air Force have tested at least 20 different types of biofuels.

Sources:

  • Bloomberg BusinessWeek, July 11 edition.
  • Mark Rumizen, fuel specialist at the US Federal Aviation Administration.
  • Billy M. Glover, managing director of environmental strategy at Boeing's commercial airplanes unit.
  • International Air Transport Association.
  • European Union's cap-and-trade system for CO2.
  • US Energy Department.
  • Exxon Mobil Corp.
  • BP Plc.
  • Boeing Co.
  • Airbus SAS.
  • Neste Oil Oyj.
  • Solazyme Inc.
  • I Media LLC 2011.