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Viewpoint: Biojet market may see another growth surge

28 Dec 2017 14:00 GMT
Viewpoint: Biojet market may see another growth surge

San Francisco, 28 December (Argus) — Renewable jet fuel has faced a number of barriers, from technology challenges to regulatory inertia, but the next two years could see breakthroughs that will lead to greater production and more widespread use of the fuel.

A new technology, Hydro-processed Esters and Fatty Acids (HEFA) plus, or high freeze-point HEFA, could help lower the cost to produce sustainable aviation fuel. The cost of biojet is prohibitively expensive, and supply is limited, with only a handful of production facilities worldwide. Airlines have referred to it as ‘liquid gold' getting poured into an aircraft. HEFA plus could help erase biojet's wide premium over petroleum jet.

Successful adoption of HEFA plus would likely increase the supply of biojet on a global scale, as it will make it easier for renewable diesel facilities to produce biojet. Finnish refiner and biofuels producer Neste is one of the companies hoping to have the HEFA plus approved by American standardization group ASTM, so that renewable diesel equipment can more easily be used to produce renewable jet fuel. Original equipment manufacturers (OEMs) requested additional testing of the technology, which is due to be completed early next year before heading to an ASTM vote.

Neste is planning an additional production line in Singapore for renewable aviation fuel and renewable diesel, with an estimated launch date in 2022. The company will make a final investment decision by the end of 2018.

AltAir, which operates the Paramount refinery in California, says demand for biojet significantly outstrips supply at its plant. The refinery began operating in 2016 using tallow feed-in and has been supplying Los Angeles International Airport (LAX) with renewable jet fuel since March 2016. Regulatory incentives to produce renewable diesel over renewable jet fuel have thwarted growth in the biojet market, AltAir's president Bryan Sherbacow said at a jet fuel symposium in Vancouver last month.

But regulatory changes could be coming to California next year. The state is taking aim in 2018 to incentivize growth in alternative jet fuel, as it has with renewable ground transport fuels. The California Air Resources Board (ARB) will vote next year on a proposal that would allow alternative jet fuel to generate credits under the state's Low-Carbon Fuel Standard (LCFS), coming into effect 1 January 2019. The measure has not faced any major opposition and is widely expected to pass.

A preliminary analysis by the ARB estimates that the fuel could account for as much as 5pc of credits generated per year by 2020. Inclusion in the LCFS would be a significant step to encourage more biojet production and reduce the cost of the fuel, market participants have said. Other states and regions could follow in California's footsteps, as they have with other Californian climate initiatives, in allowing biojet to generate carbon credits. This would further support growth of the biojet market and help to narrow its premium over petroleum jet.

Biojet appears to be the only option for the aviation industry to meet sustainability goals, as there are no options for airplane electrification, as there is for ground transport. With the International Civil Aviation Organization (ICAO) pushing sustainability for airlines, and continued growth expected in the aviation industry, it seems more and more likely that the biojet market is due to experience some growth.


Los Angeles jet fuel ¢/USG