Whatever happened to aviation biofuels? New report from Australia rates the prospects.

December 3, 2013 |

Aussie-SAF-reportcoverQantas, Shell, AISAF, SkyNRG, Solena and others collaborate on on an illuminating supply chain analysis of sustainable aviation fuels.

Which one is technically ready, but feedstock-starved? Which one has affordable feedstock but the technology is not proven in prime time? Read on.

There’s been so much uproar in road transport with revisions to EU targets and a proposed pullback by the EPA on US biofuels targets, you would be forgiven if you hadn’t given much thought to the aviation sector of late. And, to complicate matters, aviation biofuels developers have submerged deeply into stealth mode. Some, on the painful road to raise funds for first commercial, first-of-kind projects; others still moving through the earlier stages in the lab, pilot or demonstration stage.

But this week, a magnum opus on the future of aviation biofuels arrives out of Australia. The 105-page Qantas and Shell-backed report that is arguably the most in-depth analysis of an aviation biofuels supply chain ever conducted — although limited to Australia in particular and essentially just two fuel pathways already approved for use in commercial aviation and which meet strict operational and sustainability criteria.

The pathways? One, HEFA fuels, made from plant and animal oils, the subject of many of the ballyhooed flight tests in recent years, the other, Fischer-Tropsch fuels, which Solena, for one, proposes to make from municipal solid waste).

The Good news and the 3 Maybes

The good news — a positive check-off for the technical readiness of HEFA fuels, and a generally positive outlook on the feedstocks for FT fuels. A plant could be viable, the report finds, if three key priorities are addressed:

The less-thrilling

The less-thrilling news — Australia, the report concludes, is unlikely to be able to economically support HEFA fuels. One, the feedstocks are currently more expensive than the market price for the finished fuels. Even if that is solved through policy or market forces, there’s not enough domestic feedstock. Even if that is solved, the expectation is that refiners will opt to produce diesel instead of jet because of much stronger margin potentials and strong demand. New feedstocks such as algae or pongamia are likely a must for this pathway to succeed.

The vexing problem for aviation fuels - renewable oil feedstocks are more expensive than crude oil.

The vexing problem for aviation fuels – renewable oil feedstocks are more expensive than crude oil.

Equally less-thrilling? The jury’s out, technologically, on applying the FT process (widely proven and used, but generally at super-massive refining scale) on a scale small enough to be able to rely on an affordable feedstock like municipal solid waste. The report also notes the high cost of building small FT plants (for example the $500 million price tag for the 13 million gallon Solena-British Airways plant in the UK), and the unproven nature of aggregating and using municipal solid waste at scale as an FT feedstock. In short, a ways to go in proving that technology out.

Meanwhile, the study points to the usual kinds of infrastructure and policy supports that are needed to make a new fuel pathway succeed — including extending the production grants available for biodiesel to aviation fuels.

Perspectives from the pros

Qantas’ Head of Environment, John Valastro, said the report gave a clear picture of the actions required to make regular biofuel flights a reality in Australian skies. “Aviation biofuel is the only technology capable of delivering the generational change required for the aviation industry to meet its ambitious target of a 50 per cent reduction in carbon emissions by 2050,” Mr Valastro said.

“It’s well-established that certified biofuel can be used safely in commercial flights. Qantas’ focus now is on making it a viable alternative to conventional jet fuel. It won’t be easy, but we are armed with a stronger and more detailed understanding than ever before of all aspects of the biofuel supply chain.

The Digest asked the Chair of A/AA’s Australian Initiative for Sustainable Aviation Fuels (AISAF, Dr. Susan Pond to characterize the key findings.

“It is a magnum opus,” she told the Digest.

The project background

“The project was announced by the Minister for Energy on 13 April 2012, the day Qantas conducted its commercial flight from Sydney to Adelaide with one engine powered by 50% HEFA. The Minister made the announcement because ARENA (http://arena.gov.au/) provided $500,000 towards the study, later increased by another $75,000. Shell and Qantas contributed in-kind support. It looked at the two ASTM approved pathways, HEFA in much more detail than FT. The front page lists the other partners brought in to undertake some of the detailed work. Since it was completed in June, Qantas have been conducting confidential briefings of various government departments and the industry.

The report looks at a complete supply chain - finding issues with both just-now-being-proven technologies and shortages of feedstock.

The report looks at a complete supply chain – finding issues with both just-now-being-proven technologies and shortages of feedstock.

The focus and the findings

“The study examined two sizes of biorefinery, but most emphasis was placed on the 1 MT per annum plant oil/tallow/UCO feedstock, mostly from Australia but some imported to keep production flowing. The overall conclusion that the “HEFA based pathway faces significant economic challenges in Australia” is not surprising.”

Conclusion? Just not enough feedstock to make renewable oils the pathway of choice.

Conclusion? Just not enough feedstock to make renewable oils the pathway of choice.

The positive outcomes

“On a positive note, it is the most comprehensive analysis of a potential SAF supply chain in Australia and lays the foundation for feasibility studies of other more promising pathways based on feedstocks that we do have in large measure – i.e. lignocellulosic, or for oil produced from other sources such as Pongamia, algae etc.  It also demonstrated for the first time in Australia the collaborative effort required to put any SAF project together and takes us up another notch on the learning curve. The necessary changes in policy to level the playing field for SAF vs diesel also became crystal clear.

The report found that significant marginal lands are available for novel feedstocks to be developed. Here's where they are.

The report found that significant marginal lands are available for novel feedstocks to be developed. Here’s where they are.

The road forward

“The short-term opportunities for SAF in Australia are to focus on improvements in the feedstock economics of the HEFA pathway and the technology readiness of the waste-to-fuel FT pathway,” the report concludes. “In addition, in the medium term, there is a significant opportunity to explore the feasibility of next-generation pathways that are likely to be certified by the global standards organization ASTM in the near future. As identified by this report and previous reports, emerging pathways have the potential to involve feedstock that are cheaper, more plentiful and more sustainable than natural oil feedstock, have lower capital expenditure than FT, and in which Australia has a significant advantage compared to the rest of the world.”

“In a similar manner to this study, future studies (e.g., supported by the Australian Initiative for Sustainable Aviation Fuels or AISAF)5 might involve key players across the supply chain to assess the practical and commercial conditions under which emerging pathways can lead to the establishment of viable SAF value chains.”

The Bottom Line

It all comes down to the feedstocks. MSW and non-edible oils, there isn’t enough for the scale that makes for affordable fuel, right now. Novel feedstocks, such as algae and pongamia, are long-term propositions — and algae is likely to be produced for higher-price market in nutraceuticals for some time.

Next stop is likely to be in wood feedstocks, which are in relatively plentiful supply, are not part of the food supply chain, and have lower-cost processing technologies than are currently available for MSW. Plus, lower overall per-tonne prices.

Technologies? Well, there’s KiOR’s wood-to-jet fuels pathway. For now, the only type that has “here and now” implications, and that pathway would not likely lead to jet fuels unless there are policy constructs that tempt producers away from the better margins available in diesel.

If the future of “affordable, sustainable aviation fuel” were a kookaburra, it might just actually be sitting in that old gum tree, just as the old children’s song relates.

For now, it’s this: Affordable price, fuels now as opposed to later, sustainable pathway. Pick any two.

The complete report

The complete report is a must-read for those interested in Australia or aviation biofuels, and it’s now available to the public, here.

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