Some non-food vegetable oil-based aviation biofuels could be cost-competitive by 2020
This GreenAir article says Bloomberg analysts think that while aviation will not use oils from palm, rape or soya on any scale, the industry may be able to source biofuels from non-food crops that are commercially viable, within years. They reckon that while conventional jet kerosene costs about $0.86 per litre now, jet fuel could be produced at $0.86/litre by 2018 if production of jatropha and camelina was scaled up, with pyrolysis of woody feedstock producing jet fuel at $0.90/litre at around the same time. Liquid fuels made using the Fischer-Tropsch process to convert woody biomass is unlikely to produce jet fuel cheaper than $2.60/litre in 2018. Large-scale, biofuel-producing algae farms will not appear this decade. However, available volume is going to be limited and airlines will be in competition for it. Costs of biofuel are currently very much higher than paying for ETS carbon permits.
Some non-food vegetable oil-based aviation biofuels could be cost-competitive by the end of the decade, finds Bloomberg study
Wed 15 Feb 2012
If production efficiency continues to improve, the cost of some biofuels – such as those based on hydro-treated non-food vegetable oils from jatropha and camelina, or from pyrolysis of cellulosic feedstocks – could become competitive with the cost of fossil-based jet fuel by 2018.
This is the main finding of research carried out by Bloomberg New Energy Finance for its clients.
On the other hand, fuels produced from woody feedstock through gasification and the Fischer Tropsch (F-T) process are unlikely to be economical until well into the next decade. The researchers suggest that subsidies or mandates [government targets for biofuel use] will be required if governments wish to see a sizeable take-up of aviation biofuels before 2020 and airlines will have to compete with road transport for the limited availability of certified, low-cost supplies.
Established biofuels based on edible vegetable oils such as soybean, rapeseed and palm may never become fully cost competitive, suggests the research, although sustainability issues make it highly improbable airlines will use fuels from these sources in any case.
Although unlikely to be certified much before 2014, it adds, wood-conversion through the pyrolysis process may be more promising for producing cost-competitive jet biofuel before the end of this decade.
“The problem is that for the foreseeable future, even when the economics make sense, there will simply be limited availability of certified and relatively low-cost biofuel,” says Harry Boyle, Lead Bioenergy Analyst at Bloomberg New Energy Finance.
“If governments want airlines to burn a significant proportion of non-fossil fuel before 2020, they will have either to subsidise advanced-but-not-yet-economic biofuels or, more likely, introduce mandates requiring carriers to use a certain percentage of sustainable biofuels in their mix, and put up with complaints that this is driving up ticket prices.”
Adds Boyle: “The US government has mandated that 18 billion gallons (68bn litres) of road transport fuel will have to come from next-generation, or cellulosic, biofuel by 2022. Western governments could do the same for next-generation aviation biofuels, starting any time from 2018, as a way of stimulating a potentially significant industry and reducing air transport emissions.”
For those airlines complaining about the cost of buying allowances to comply with the EU Emissions Trading Scheme, the report shows this will be relatively minor compared to the additional price airlines would have to pay to burn biofuels rather than conventional jet fuel in the next few years.
Compared to current jet fuel prices of around $0.85 per litre, aviation fuel from edible feedstock could potentially be supplied at $1.20/litre if producers moved to large-scale production, estimate the researchers.
A better result should be possible using jatropha, they say. If production were to scale up, jet fuel could be produced at $0.86/litre by 2018, with pyrolysis of woody feedstock producing jet fuel at $0.90/litre at around the same time.
Even with rapid efficiency improvements in the next few years, using F-T to process woody biomass is unlikely to produce jet fuel cheaper than $2.60/litre in 2018. The researchers predict large-scale, biofuel-producing algae farms will not appear this decade and so algae-based jet fuel is the pathway furthest from cost parity with conventional jet kerosene.
Despite the cost differential, the researchers have encouraging words for early adopters of aviation biofuels.
“The move by the European Union to bring all airlines into the EU ETS carbon trading scheme has focused the minds of airlines around the world on reducing their carbon emissions,” says Michael Liebreich, Chief Executive of Bloomberg New Energy Finance. “While European carbon credits at the moment are so cheap they have negligible effects on ticket prices, biofuels will be competitive within a decade. However, available volume is going to be limited and airlines will be in competition for it, so those airlines which move now are likely to have an advantage later.”
Claire Curry of Bloomberg New Energy Finance will be presenting the findings at an aviation conference next month during the World Biofuels Markets in Rotterdam.