Industry Market Trends

United, Boeing Issue Aviation Biofuel Recommendations

Jul 05, 2013

ID-10072868The ability to step onto an airplane and get just about anywhere in the world in a day or two surely exceeds the wildest dreams of our forefathers. Indeed, it would be hard to imagine our modern world without it. Yet concerns over carbon emissions has raised questions over how we can continue to enjoy the benefits of air travel without adversely impacting other facets of our quality of life.

The airline industry's first response to these concerns was the development of more efficient aircraft and operations. A commitment made in 2010 pledged an annual improvement in fuel economy of 1.5 percent per year through 2020 at an estimated cost of $1.3 trillion. The increased use of smaller regional jets and more precision routing and planning has helped. The next step, which is really just emerging from the laboratory, is the development of aviation biofuels that can both diversify the fuel supply while significantly reducing its carbon footprint.

That fledgling industry took a substantial leap forward last week with the release of a report bearing the findings and recommendations of a group called the Midwest Aviation Sustainable Biofuel Initiative (MASBI).

The initiative, a year-long collaboration among over 40 stakeholder groups seeking to identify what would be needed to get this endeavor off the ground, successfully reached an agreement.

There is continuing strong interest on all sides. The airline industry is looking for alternative sources that can reduce its carbon footprint. Meanwhile, the biofuel industry, which is close to saturating the 10 percent ethanol blend into gasoline, is looking for additional markets.

I spoke with Jimmy Samartzis, the managing director of global environmental affairs and sustainability at United Airlines, a leading player in the initiative, along with Boeing, Honeywell UOP, Chicago's Department of Aviation, and Clean Energy Trust.

Samartzis said, "The U.S. military and commercial aviation industry together consume more than 20 billion gallons of jet fuel a year. Nearly 3 billion gallons are consumed by airlines in the Midwest. The cost of jet fuel has more than tripled since 2000, and jet fuel demand in the Midwest is expected to increase by 9 percent by 2020. For every 5 percent of Midwestern petroleum jet fuel that can be replaced by biofuels, approximately 3,600 jobs will be created and an estimated 700,000 tons of carbon dioxide on average will be avoided annually."

The MASBI report lists fourteen key recommendations in five areas to move the industry forward.

Research & Development

Recommendation 1. Improve feedstock production capacity through agricultural innovation. "Off-year energy crops provide additional revenue while also providing nutrients to the soil without displacing existing food crops," said Samartzis. "Camelina, for example, does not require much from a resource perspective but yet has very positive economic development benefits for the agricultural community."

Recommendation 2. Tailor feedstocks to jet fuel. Samartzis explains, "Many of the energy crops available today do not lend themselves that well to jet fuel; they are more conducive to diesel and other distillates. Development of advanced feedstocks tailored for jet fuel production, would include an oil seed crop with chemical properties that would include the proper level of volatile aromatics and density characteristics to make it a drop-in replacement. Recommended feedstocks include: corn, corn stover, wood residues, municipal waste, industrial residue, and oil residues from corn."

Recommendation 3. Investigate the impacts of uncertainty on production. How can the stability of supply be assured given the uncertain conditions, such as changing policy, weather, seasonal intermittency, and competition for feedstocks on the techno-economic performance of conversion technologies?

Recommendation 4. Advance technologies to convert ligno-cellulosic biomass. Samartzis stated that eight technologies were evaluated by MASBI, of which the group recommends four:

  • Alcohol-to-jet (ATJ), which uses fermented plant sugars;
  • Hydrotreated depolymerized cellulosic jet (HDCJ), a direct liquefaction pyrolysis using wood or corn stover;
  • Fischer-Tropsch synthesized paraffinic kerosene (FT-SPK), a biomass-to-syngas fuel;
  • Hydroprocessed esters and fatty acids (HEFA), which is based on animal fats, plant oils, and algae.

According to Samartzis, "The last two have already been approved by ASTM [American Society for Testing and Materials] for blending up to 50 percent."


Can algae-based fuels ever reach commercial scale? Credit: Honeywell. Credit: Honeywell.

Recommendation 5. Identify means to expedite approvals by the ASTM International and the Environmental Protection Agency. The Midwest already has a robust blending and refining infrastructure and the logistics required to support this industry. A more streamlined approval process in critical areas, such as generation of test data to evaluate the performance of proposed fuels and engine testing can speed up time to market of new conversion technologies.

Recommendation 6. Allow producers to optimize product portfolios. Samartzis said, "It's important for producers to do what they need to do to remain profitable. Some suppliers, like Solazyme, are focusing in the short term on specialty products that are more profitable to keep them afloat as they wait for the biofuel market to mature."


Recommendation 7. Balance risk and reward for early adopters of technology. The report suggests using innovative pricing structures and long-term supply agreements.

Recommendation 8. Demonstrate industry demand with aviation jet fuel purchase guidelines. Both the aviation industry and the biofuels industry have their own unique economic and operational constraints that must be communicated in order to find the overlap of commercial needs.

Recommendation 9. Create a pool of capital to invest in biofuels. The report claims that private investors are either hesitant to finance biofuel projects or, when they do, include unfavorable terms. MASBI advises aviation industry stakeholders to collaborate with other buyers of advanced biofuels, such as government or commercial entities, to "develop efficient financial support structures."

Samartzis noted, "The critical issue is getting to commercial-scale production, which will also then achieve the cost-competitive pricing. That's where the cost efficiencies really come into play. Then as you go up the learning curve, the costs come down even further."


Recommendation 10. Create longer-term policies that enable investment and production. "Investors have been wary, in part because the government subsidies are being reassessed annually, which makes it hard to make long term plans," said Samartzis.

Recommendation 11. Level the playing field. Samartzis said he hopes to see biofuels become eligible for corporate tax structures such as Master Limited Partnerships (MLP), which offer tax advantages and capital raising opportunities.

Recommendation 12. Fully fund the Defense Production Act Title III for the production of biofuels. The U.S. government has historically been instrumental in funding and developing new sources of energy, including nuclear power, and now wind and solar energy. Federal support for aviation and marine biofuels will continue to be important.

Recommendation 13. Build regional demonstration facilities supported by municipal and state policy. Development of smaller facilities that will not overburden local feedstock supply should occur simultaneously with coordinated municipal, state, and national policies.


Recommendation 14. Incorporate sustainability standards and advance certification. The environmental benefits of advanced biofuels will be minimal if production is not handled in a sustainable manner. The MASBI report insists that "incorporating sustainability criteria and standards is the responsibility of all its participants, from feedstock providers and fuel producers, to airlines and governments."

When asked how the Renewable Fuel Standard (RFS) affect MASBI's efforts and recommendations, Samartzis responded, "Aviation biofuels, while not obligated fuels under RFS as gasoline and diesel are, do qualify for a Renewable Identification Number, which means they can be used to satisfy an obligation. This is helpful in getting this new industry off the ground."