Runway cleared for aviation biofuels surge in 2012

ASTM gives preliminary OK to Bio-SPK fuel spec; path to 58B gallon aviation biofuels market comes clearer, closer

In Washington, Bloomberg is reporting that ASTM has given preliminary approval to the blending of biofuels produced from algal, jatropha, municipal waste and other cellulosic feedstocks in aviation fuels. Final approval is expected no earlier than July 1st, according to ASTM, of the new BIO SPK fuel standard, which will limit such fuels to 50 percent by weight.

Following final approval of the standard, Lufthansa and Airbus are expected to begin a six-month commercial trial of a 50 percent biofuel blend, on four flights per day operating between Frankfurt and Hamburg.

Cautionary note. A Bloomberg New Energy Finance analyst predicted that “The real winners of this type of regulatory breakthrough will be technology companies involved in the production of aviation biofuels. The biotech-biofuels business models of Amyris Inc., Codexis Inc., Gevo Inc. and Solazyme Inc. are all making claims to these types of new markets.” Amyris and Gevo are not producing Bio-SPK fuels and are not directly impacted by the announcement – although Solazyme will receive a potential direct impact for its Bio-SPK-based Solajet fuel, which it is producing in large test quantities for the US Navy among other customers..

Other airlines are expected to follow rapidly with flight trials, and on the sidelines of the Advanced Biofuels Leadership Conference this past April, aviation experts predicted a number of new offtake agreements between producers and airlines, following approval of the standard.

The Bio SPK standard relates to hydrotreated oils produced from waste, non-food oilseeds such as jatropha or camelina, oil recovered from organisms such as microalgae or cyanobacteria, or oil produced from animal wastes in the rendering process.

Many companies can or have trialled the UOP hydrotreating process, including Sapphire Energy, Solazyme, Terasol and Sustainable Oils. In the process, excess oxygen content is removed from the oil feedstocks to produce bio-based synthetic paraffinic kerosene, which is used as jet fuel under one of a variety of fuel specs, including Jet A, JP-4, JP-5, JP-7 or JP-8.

Other companies that could enter the aviation fuel space include Neste Oil and Dynamic Fuels, which use hydrotreating to produce renewable diesel. In addition, the fuel spec would make it possible for almost any producer of virgin or used oils, such as waste cooking oil, to potentially enter into what is expected to be a fast-growing market for renewable jet fuels.

Fuel performance

Kerosene is a powerful fuel. A 12-carbon, fuel-grade kerosene – RP-1- is mixed with liquid oxygen to power the first stage of a Saturn V launch vehicle. Five F-1 rocket engines can generate up to 217 million horsepower.

Kerosene also has excellent performance in cold temperatures compared to other high density fuels, such as diesel, and is used as an additive to diesel, for example, to halt gelling at low temperatures.

More on Bio-SPK performance from Boeing

Last year, Boeing released an excellent white paper on the topic, the Evaluation of Bio-Derived Synthetic Paraffinic Kerosenes”, which is also downloadable from the Digest’s BIZ database of useful public documents relating to biofuels. It can be downloaded here.

Additional bio-based fuel specs and opportunities

There is another fuel spec, approved some time ago, which relates to bio-based fuels produced using the Fischer-Tropsch process. Rentech is among the leading companies producing this fuel, which is already approved for use and was the subject of a 13-airline offtake agreement at LAX, announced last year. Rentech is also working with UOP for unionfining, unicracking and dewaxing technologies.

In addition, several companies are developing technologies that will produce jet fuels directly from fermentation, or from catalytic conversion processes. Companies pursuing this track include Cobalt Technologies, Gevo, Amyris, Joule Unlimited, and Virent. The latest guidance from Amyris suggests that they expect to see approval and commercial-scale production of those fuels by mid-decade.

The market and drivers for aviation fuels.

Worldwide demand for aviation fuels is growing fast, primarily due to growth in the robust Chinese aviation market. According to the International Energy Agency, aviation fuel demand will reach “7.6 million barrels per day in 2012, up from about 6.8 million barrels per day in 2007”. That translates into 116 billion gallons of jet fuel, globally, by 2012. With an approval of Bio-SPK, the biofuels industry will have a new path to supply up to 58 billion gallons of fuel to the sector.

Among demand drivers for Bio-SPK are the prospect of big carbon credit payments by airlines operating into, out of, or within Europe. Commencing in January 2012, the airline industry is scheduled to enter into the EU Emissions Trading Scheme, which will cap carbon emission levels, and is expected to cost airlines up to $19 billion in 2012 alone, according to a March report from Point Carbon.

Aviation accounts for 12% of the fuel consumed by the entire transportation sector, which is equivalent to roughly 1.5 to 1.7 billion barrels of kerosene annually (about 70 billion gallons).  Analysts project that aviation biofuels will replace roughly 1% of kerosene by 2015, 25% by 2025, and 30% by 2030.  This represents a market value of US $2 billion, $56 billion, and $68 billion in delivered fuel respectively, assuming current kerosene prices.

The use of Bio-SPK fuel, in a 50 percent blend, would eliminate all those carbon payments. In addition, airlines cite corporate sustainability programs as well as supply chain diversification among reasons that they are taking such a strong interest in Bio-SPK. Unlike, for example the passenger car market, which has carbon-mitigation options such as hybrids and electric vehicles, biofuels are generally agreed as the primary tool for aviation emissions reduction over the next 30 years, in conjunction with increases in fuel efficiency.

Potential producers

More on the potential producers, and the status of their project development, can be gleaned from the Digest’s Advanced Biofuels Project Database, which was most recently updated last month, and can be downloaded for free, via the Digest’s Bioenergy Information Zone (BIZ) collection of reports and data on biofuels development. The Project Database can be downloaded here.