The wild green yonder: British Airways aims to fly on trash, again

GreenSky London arrived on the scene a few years ago — an ambitious project to produce renewable aviation jet fuel from East London’s trash. The project fell down a rabbit hole of delays.

Now, a group of four companies including both British Airways and Velocys are back with a partnership to prepare the business case for a commercial scale waste-to-renewable-jet-fuel plant in the UK. Velocys will lead this initial feasibility stage of the project, for which all members of the partnership are providing funding. Subject to this and to the successful completion of all development stages, the aim is to achieve a final investment decision in 2019.

The other two partners are Suez, a world leading expert in recycling and waste management, which intends to provide technical and operational expertise and manage the supply of feedstock to the project; and Norma, an affiliate of Ervington Investments, Velocys’ largest investor, which is a potential investor in the project.

The catalyst

What happened that made the timing now?

Last year, at the time the original project was scrapped, BA spokesperson Cathy West told The Guardian, “The government needs to support innovative aviation biofuels projects such as this if they are to progress. Aviation fuels are not eligible for incentives that road transport fuels receive, making it difficult to build a business case to invest in UK aviation fuels projects. This affects investor confidence.”

What did British Airways want and get?

They wanted aviation biofuels included in the UK’s the government’s Renewable Transport Fuels Obligation.

And yes, this past week, the Department for Transport published changes to the Renewable Transport Fuels Obligation (RTFO), and for the first time, sustainable jet fuel is to be included in its incentive scheme. These changes to the RTFO are designed to promote sustainable aviation. Once implemented, they are expected to provide long term policy support for this market.

Ultimately, BA speculated that the UK policy shift could stimulate as many as a dozen advanced biofuels plants in the UK by 2030.

Then and Now

Solena’s own technology was a gasification system that would convert municipal solid waste to syngas, and it planned to convert that syngas to liquid transportation fuels using Velocys’ micro-channel Fischer-Tropsh technology.

The project

The plant would take hundreds of thousands of tonnes per year of post-recycled waste, destined for landfill or incineration, and convert it into clean-burning, sustainable fuels. The jet fuel produced is expected to deliver over 60% greenhouse gas reduction and 90% reduction in particulate matter emissions compared with conventional jet fuel, thereby contributing to both carbon emissions reductions and local air quality improvements around major airports.

The UK still sends more than 15 million tonnes of waste per year to landfill sites which not only damages our natural environment but also releases further greenhouse gases affecting climate change.

The planned plant will produce enough fuel to power all British Airways’ 787 Dreamliner operated flights from London to San Jose, California and New Orleans, Louisiana for a whole year. It would be the first plant of this scale.

The jet fuel produced at the plant will deliver more than 60 per cent greenhouse gas reduction, compared with conventional fossil fuel, delivering 60,000 tonnes of CO2 savings every year. This will contribute to both global carbon emissions reductions and local air quality improvements around major airports.

The capacity

It’s not entirely clear — since the business plan is under development, but we have three keys. First, a 60 percent GHG savings, and a 60,000 ton CO2 savings budget. And, conventional jet fuel produces roughly 19 pounds of CO2 per gallon burned.

Back of the envelope math suggests a project of around 11.5 million gallons per year.

The Solena Project back then

Solena originally tapped Velocys back in 2012, and by early 2014 GreenSky London is the first of several waste-biomass to jet fuel projects planned by Solena. Approximately 575,000 tonnes per year of post-recycled waste, normally destined for landfill or incineration, would be converted into 120,000 tonnes of clean burning liquid fuels. British Airways committed to purchasing all 50,000 tonnes per year of the jet fuel produced at market competitive rates on a long-term basis.

It represented big money to Velocys at the time. In excess of $30 million during the construction phase, and additional ongoing revenues of more than $50 million over the first 15 years of the plant’s operation, which had been expected to commence in 2017.

Overall, British Airways committed to buy fuels produced at the plant for the next ten years, equating to an approximate $500 million investment. The price was (then) around $3.00 per gallon. Expected annual outputs include 16 million gallons of biojet fuel, 9 million gallons of bionaptha and up to 40 MW of power.

The market

Velocys believes that there is the opportunity to develop a series of waste-to-jet fuel plants in the UK. The changes to the Renewable Transport Fuels Obligation (RTFO) recently published by the Department for Transport provide the required commercial platform for this opportunity; for the first time, jet fuel is to qualify for credits under the RTFO. These changes to the RTFO are designed to promote sustainable aviation and heavy goods transport; once implemented, they are expected to provide long term policy support for this market.

Reaction from the stakeholders

David Pummell, CEO of Velocys, said: “Our strategy remains highly focused on exploiting the large US market for cellulosic renewable fuels. Alongside the excellent progress we are making there, we believe that the recently announced RTFO changes will allow the UK to become a world leader in sustainable jet fuel.  We are very pleased to be working with world class partners to help execute the vision of a repeatable series of plants, offering a commercially attractive route to a highly desirable product for an industry that now demands significant greenhouse gas reduction solutions.  This opportunity leverages further our technology, integrated plant design and skills base, and is consistent with our renewable fuels strategy of delivering integrated plant solutions, in collaboration with partners, to fulfil a real market need.”

Willie Walsh, IAG chief executive, said: “Sustainable fuels will play an increasingly critical role in global aviation, and we are preparing for that future. Turning household waste into jet fuel is an amazing innovation that produces clean fuel while reducing landfill. From developing innovative operating techniques, to investing in the most modern and efficient aircraft, we have a strong track record in researching, identifying and implementing ways to reduce emissions. This partnership continues this tradition, and shows how we are investing in our long-term future – and that of our customers.”

The Bottom Line

Then as now, it remains one of the signature efforts to brings aviation biofuels from a demonstrated technology to an everyday commercial reality at scale. Multiple airlines have been at the forefront in catalyzing the testing and certification of fuels. Now, projects like this one and Fulcrum are on the cusp of beginning construction.

The next questions?

One — will the project produce fuels cheap enough to merit a green-light in these low oil-price times. We think that the UK’s RTFO support will make that possible, but time will tell.

Two — will we see a sudden blooming of this technology wave into deployment phase? Are we looking at a handful of projects over the next 5-10 years, or dozens of them?