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Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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How COVID Could Clean Up Airline Emissions

It’s been nearly 12.5 years since Virgin Atlantic flew a Boeing 747 between London and Amsterdam partly powered by a biofuel made from Brazilian babassu nuts and coconuts. Although Sir Richard Branson labeled the event a “vital breakthrough”, many observers dismissed it as just another one of his outlandish PR and marketing stunts.  And they might have been right.

More than a decade on, aviation biofuels account for less than 1 percent of the 1.5 billion barrels of aviation fuels (15 percent of global oil supply) that commercial airlines burn through in a typical year. It does not help to learn that the global aviation industry emits so much CO2 and other harmful greenhouse gases that if it was a country, it would rank among the top 10 emitters.

It’s only natural to wonder: Why has the adoption of these cleaner fuels been so dismal?

To be fair, large-scale production of the quixotic mix used in the Virgin Atlantic flight was deemed impracticable because of the harmful effects of diverting potential food to fuel and also due to the limited supply of babassu nuts. 

Yet, other airlines have successfully developed more sustainable aviation biofuels: Forest waste (Norwegian), agricultural waste (United), used cooking oil (KLM), and carinata seeds (Qantas). 

Two years ago, Virgin Atlantic flew another Boeing 747 from Orlando to London partly on biofuel made using recycled waste carbon gas from a steel mill. 

Los Angeles and Oslo airports also include biofuels in their regular fueling regimens.

But airlines might now have little choice other than to rapidly ramp up their uptake of biofuels if they are to achieve their climate goals in line with the 2015 Paris Climate Agreement.

Cleaning up their act

Back in February, airline leaders, airports, aircraft manufacturers, and other aviation organizations committed to a net-zero emissions target by 2050, effectively cutting CO2 emissions from 30 million tonnes per annum to zero despite a projected 70% increase in passenger numbers over the timeframe.

To achieve this target, they plan to use a mix of cleaner aircraft, sustainable fuels, and better air traffic management. 

For aviation fuel to be considered renewable, about half of its contents must be derived from biofuels such as ethanol made from corn or wood chips. 

The biggest reason why most airlines continue giving biofuels a cold shoulder is due to their higher costs. Fuel costs constitute the biggest line item for airlines, typically accounting for ~22 percent of their overheads. 

Using renewable air fuel would likely necessitate passing the extra costs to customers by increasing ticket prices, something that would not work well unless everybody did it at once because airline-specific fare changes are highly price elastic. On average, renewable jet fuels would need oil prices to climb to around $65-per-barrel oil for them to become cost-competitive.

Fortunately, one airline has managed to solve the cost conundrum: Virgin Atlantic.

The concoction that powered Virgin Atlantic’s second groundbreaking flight from Orlando to London basically was a blend of conventional jet fuel and ethanol. The ethanol was produced through an innovative process developed by LanzaTech and Pacific Northwest National Lab (PNNL). 

Related: Energy Giants Race For 'Green Hydrogen' Market Share

Over the past 15 years, LanzaTech has managed to develop technologies that can harvest waste carbon emissions and turn them into ethanol that can be blended with fuels or used in the chemicals industry. The resulting fuel not only has a lower carbon footprint than regular fuel but also comes at a comparable cost. The Energy Department has declared that waste carbon is proving to be a good source of cleaner-burning jet fuel.

LanzaTech has now spun-off LanzaJet which alongside its corporate partners All Nippon Airways, Canadian oil and gas producer Suncor Energy and Mitsui will develop renewable jet fuel for the commercial market.

Unfortunately, that has not saved Virgin Atlantic from bankruptcy though they have successfully demonstrated that affordable clean jet fuel is within the realm of possibility.

Other firms with notable aviation biofuel interests include Colorado-based Gevo (NASDAQ: GEVO) which has about 15 million gallons under contract for Delta and Scandinavian Airlines and Finland’s Neste which has entered long-term contracts to supply KLM Royal Dutch Airlines and Delta Airlines with renewable jet fuel. Four years ago, Gevo made jet fuel out of wood scraps as part of a five-year study backed by $40 million from the United States Department of Agriculture (USDA) while Neste produces sustainable fuels from waste and residue raw materials.

Green bailouts

With a reported 70 percent reduction in scheduled flights, airlines have been one of the industries hardest hit by the Covid-19 pandemic, driving many to the brink of insolvency almost overnight.

Here in the U.S., the coronavirus relief act (Cares Act) directed $50 billion to keep domestic carriers afloat through September 2020. However, one government was a bit more demanding: France announced a €7 billion bailout of Air France on condition that the airline cut its carbon footprint by 10 percent from today’s levels by 2030, halve CO2 emissions for flights originating within mainland France and use at least 2 percent of renewable jet fuel by 2025.

Maybe if more governments and consumers started voting with their money by supporting lower-emitting airlines, more will start committing to cleaner fuels.

By Alex Kimani for Oilprice.com

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