In California, Solazyme announced that it has begun a collaboration with Qantas, to pursue the potential for commercial production of Solazyme’s microbial derived aviation fuel, Solajet, in Australia. This represents the first collaboration in the Asia-Pacific region to explore the use of Solajet in commercial aviation. There is currently a six billion liter a year demand for aviation fuel in Australia. Qantas is also working with another US company, Solena, to determine the feasibility of using MSW for production of biojet fuel.
Last month, we wrote: “At a series of public and private meetings this week on the Rodeo Drive of algae, North Torrey Pines Road in La Jolla, California, Qantas confirmed that it is in advanced talks with an unnamed algal biofuels producer (“with strong ties to Australia”) that are expected to result in a letter of intent for an offtake agreement for algal jet fuel, with the potential that Qantas may take a financial stake in the venture.
Qantas’ Peter Broschofsky, who is coordinating the initiative for Qantas as well as chairing the environment committee of the International Air Transport Association (IATA), also confirmed that the company, hopes to complete feasibility work on its first biofuels project within six months. Qantas signed LOI with Solena earlier this year, and launched what was described at the time as a 12-month investigation of the potential to develop a 19 million gallon waste-to-jet fuel plant in Australia.
Possible Qantas equity stake?
Qantas CEO Alan Joyce is reported to be “putting on the pressure, for the team to get on with it,” and Broschofsky said that Qantas has not ruled out taking an investment stake in a biofuels enterprise, though he suggested that any decisions would be taken after completion of feasibility work. He said that there continued to be some uneasiness at the Qantas board level on the wisdom of entering the biofuels sphere as an equity partner.
“Three or four years ago at IATA,” Broschofsky said, “biofuels weren’t even on the radar; it was in the “too hard” category. But $180 per gallon fuel at the wing (in 2008) got everyone’s attention – it was a real crisis.” He described how Boeing galvanized the industry behind the development of the Bio-SPK jet fuel specification, which most observers are predicting will be approved in the first half of 2011 and possibly late in the first quarter.
“Watch the flood,” Broschofsky predicted, “after the fuel is certified, interest will be at a fever pitch, and we want to get in ahead.” He detailed how it was Boeing’s interest that brought Qantas into the biofuels arena, and Qantas in turn galvanized broader support within IATA.