Marsh & McLennan Advantage Insights logo
Conversations and insights from the edge of global business
Menu Search

BRINK News is transitioning to This Moment platform on as of March 31, 2023. Read the update here.


Aviation Biofuels Battle Turbulent Market

From the tobacco fields of South Africa to the deserts of Abu Dhabi and arid lands in Australia, the aviation industry is piecing together a comprehensive puzzle of sustainable biofuel candidates to help reach its goal of becoming carbon neutral by 2020. But the efforts are scattered and small-scale. While some moves have been made to help drive a sustainable market for aviation biofuels, a general lack of government mandates and market subsidies is creating turbulence for this promising technology.

The airline industry contributes about 2 percent of all carbon dioxide emissions globally, according to the International Air Transport Association (IATA), an industry trade group. Since 2009 the industry has been working to cap carbon emissions and improve fuel efficiency by 1.5 percent a year to 2020 and to cut CO2 emissions by 50 percent relative to 2005 levels by 2050.

Key to that carbon-neutral strategy is the use of sustainable aviation biofuels, which have the potential to reduce the industry’s carbon footprint by 80 percent, according to the IATA. These fuels are derived from various feedstocks such as plants or waste materials.

“While offsetting is critical to managing emissions in the short-term, in the long-term we rely on clean technology improvements to achieve our goals,” said Alexandre de Juniac, IATA’s director general and CEO in a statement calling for more government support of biofuel use in aviation at the organization’s annual meeting in June.

IATA’s resolution calls on government to “implement policies to accelerate” biofuel development, “including the creation of the appropriate regulatory framework to expedite the development of production facilities.” Those policies could include:

  • Easier access to finance, including loan guarantees and capital grants
  • Supporting demonstration plants and supply chain research and development
  • Putting sustainable aviation fuels on an equal footing with automotive biofuels through equivalent public incentives
  • Legislative certainty over an extended period of time to give investors confidence to finance new production facilities

Three of the most recent feedstock developments include a tobacco plant hybrid, agave, the plant from which tequila is made, and plants grown with waste seawater.

The tobacco tie-in comes in the form a partnership that includes South African Airways, Dutch aviation biofuels company SkyNRG and Boeing to create jet fuel from Solaris, a nicotine-free tobacco plant. The partners have also launched the Southern Africa Sustainable Fuel Initiative, a move to ensure a long-term domestic fuel supply. “The goal is to scale-up over the next several years to gain additional biofuel capacity,” Boeing said in a statement. “If successful, farmers will be able to tap into local and global demand for certified feedstock without adverse impact to food supplies, fresh water or land use.”

Agave may be best known as the plant from which we get tequila, but it can produce extraordinarily high per-acre yields, has a propensity for growing on marginal lands and is capable of producing a sugar content twice that of sugarcane, which makes it a prime biofuel candidate. That’s the word coming out of Byogy Renewables, which has teamed with AusAgave Australia to produce jet fuel from the plant. Tests by Byogy, using its proprietary technology, have produced a cost competitive jet fuel “at or below that of petroleum products without infrastructure modification, blending, or government subsidies,” the company said in a statement.

Seawater is an integral part of a five-year biofuel research project from the Sustainable Bioenergy Research Consortium (SBRC), affiliated with the Masdar Institute of Science and Technology in Abu Dhabi. Dubbed ISEAS, for Integrated Seawater Energy and Agriculture System, the program uses plants known as halophytes, grown in desert soil and irrigated by waste saltwater from fish and shrimp ponds. The project will turn both plants into aviation biofuels using SBRC research.

Sustainable jet biofuels have the potential to cut the aviation industry’s carbon footprint by 80 percent.

A Sustainable Second Generation

Biofuels have a jaded history. First generation biofuels were derived from edible feedstock, such as corn and sugarcane, and are at the heart of the “food vs. fuel” debate. Other criticism takes aim at the aviation industry’s drive toward biofuels as a means to combat climate change calling it “ill-conceived at best or hypocritical at worst.”

“When you talk about biofuels, they have to be done right,” said James Kinder, a Boeing biochemist. “We’re actually trying to figure out how much energy it takes to take this biomass and grow it, to harvest it, to process it, turn it into jet fuel,” he said. “That’s what we call the whole life cycle.”

Sustainable aviation biofuels are derived from so-called “second generation” or “advanced biofuels.” According to the Sustainable Aviation Fuel Users Group, these are feedstocks that:

  • Exhibit minimal impact on biodiversity
  • Meet a sustainability standard with respect to land, water, and energy use
  • Do not displace or compete with food crops
  • Provide a positive socioeconomic impact
  • Do not require any special fuel handling equipment, distribution systems, or changes to engine design

These biofuels are known as “drop-ins” because they can be added to (or substituted for) traditional jet fuels without modification. This is important because it means manufacturers don’t have to redesign engines or aircraft and that fuel suppliers don’t have to develop new delivery systems.

Price is Pain Point in March to Commercialization

More than 1,500 trial flights have been flown using some blend of jet fuel and biofuel, typically a 50/50 split (the most allowed by current industry standards). However, no commercially viable aviation biofuels currently exist. Jet fuel accounts for 17 percent of the industry’s operating costs (2017 estimates).

In the U.S., the Federal Aviation Administration is aiming for the aviation industry (both commercial and military) to use one billion gallons of sustainable jet biofuel starting from 2018, “with the intent of encouraging commercial production,” according to a GAO report. That’s about 5 percent of the predicted fuel consumption for military and domestic airlines in 2018, the FAA told GAO investigators.

“Achieving price competitiveness for alternative jet fuels is the overarching challenge to developing a viable market,” the GAO report says. The most frequently cited impediments to competitive pricing, the report says, are “high development costs and the uncertainty of federal regulations and policies” and it states that “federal activities are needed to help advance the alternative jet-fuels industry.”

The GAO report also states that alternative jet fuels would need a subsidy ranging from 35 cents to $2.86 per gallon to be price competitive with conventional jet fuels in 2020.

There are more than 20 biofuel development projects in the U.S. alone, according to a U.S. Department of Agriculture report. “These projects utilize a variety of feedstock and process technologies to produce renewable fuels, and several have the potential to produce aviation biofuel,” the report says. “However, these projects need additional funding to support biofuel development in the near term.”

Research shows that so-called “green diesel,” made from recycled animal fat, used cooking oil and inedible corn oil are already used for ground transportation and can power aircraft, too. Green diesel is available today in commercial quantities, about 800 million gallons a year, from the U.S., Europe and Singapore, but that’s still little more than 1 percent of the total needed by the thirsty global aviation industry. Another huge selling point: Green diesel, at about $3 per gallon with government subsidies, is cost competitive with jet fuel. Green diesel is an important step in the evolution of viable sustainable aviation biofuels, Julie Felgar, managing director of Boeing Commercial Airplanes Environmental Strategy and Integration, told the Chicago Tribune. “A few years ago, people said this was a complete longshot,” she said. “We still have a lot of work to do, but it will be an easier road to travel.”

The timeline for mainstreaming biofuel in aviation could accelerate after 2020, according to the FAA. “[B]iofuels will account for a low proportion of global aviation fuel consumption before 2020, but could make a significant contribution over a longer time horizon,” says an FAA Center of Excellence report. The report also says that a high price on carbon, combined with some “optimistic assumptions” could result in 100 percent biofuel use by airlines globally by the early 2040s. “With no carbon price and slow development of biofuel technologies, biofuels account for 3% of aviation fuel use in 2030 and 37% in 2050,” the report says.

Regulation could change the competitive landscape. In October of last year the International Civil Aviation Organization (ICAO) agreed to a global market-based measure with an aim of supporting the goals of carbon-neutral growth and long-term reduced carbon emissions. “This is a preferred approach than having a patchwork of regional and local measures that are not harmonized and could create inefficiencies in the system without any certainty of delivering environmental benefits,” ICAO said. Sixty-six of the 191 ICAO member states indicated they will participate in the pilot phase of the program beginning in 2021.

“Without renewable jet fuels, however, it is unlikely that airlines will be able to reduce emissions enough to meet the proposed requirements of this and other regulatory mandates set to come online,” Bob Orr and Geoff Murray, partners with Oliver Wyman, wrote in Forbes.

A version of this piece first appeared on The Atlantic.

Brock N Meeks

Executive Editor of BRINK @brockmeeks

Brock Meeks is an award-winning reporter and online journalism pioneer. He previously reported for MSNBC, Wired magazine and the San Francisco Chronicle, among others. He was founder of CyberWire Dispatch, which helped pioneer the online news industry.

Get ahead in a rapidly changing world. Sign up for our daily newsletter. Subscribe