Are We There Yet?

Ross Macfarlane
July 21, 2017
Airplane

This summer, I participated in an event sponsored by the Port of Seattle unveiling a new report that addresses how to make sustainable aviation fuels economically competitive. Innovative Funding for Sustainable Aviation Fuel at U.S. Airports: Explored at Seattle-Tacoma International illustrates both the continuing challenges in and growing opportunities for producing lower-carbon, sustainable jet fuels to power the next generation of flight.

We have engaged extensively for several years in the quest for sustainable jet fuels, dating back to our work leading one of the first roadmaps in the world: Sustainable Aviation Fuels Northwest (SAFN) in 2011. SAFN brought together stakeholders from across the supply chain to chart a path towards developing fuels derived from sustainable agriculture, forest residues, wastes, and other sources.

Aviation leaders have used SAFN as a model for other roadmapping efforts around the world, including developing plans in Mexico, Brazil, and elsewhere. Despite continued work from aviation leaders to promote sustainable jet fuel, research breakthroughs, and well publicized demonstration flights, we are still a long way from producing fuels at a scale and price point that will significantly displace fossil jet fuels.  Nonetheless, make no mistake, we need to stay committed to this effort.

Why Sustainable Fuels

Commercial aviation contributes approximately 2% of global CO2 emissions, a share that is rapidly growing with increased prosperity and mobility around the world. By some estimates, aviation emissions could quadruple by 2050 without specific policy to limit emissions.  These emissions are also a very visible contributor: for most business and professional people, flying constitutes the biggest slice of our personal CO2 footprints.

The aviation industry has set goals for carbon-neutral growth by 2020 and cutting emissions in half by 2050.  While airplane manufacturers have made major strides building more efficient planes and streamlining operations, they recognize that meeting these carbon emission reduction targets is going to require new, “drop-in” fuels that have been certified to work safely in existing planes. Unlike passenger vehicles, we are a long way from the era of “plug-in planes” that will be practical for commercial aviation.

Due to these challenges, the aviation industry recently agreed to a global approach that relies primarily on offsetting emissions with reductions in other sectors.  Many environmental and climate organizations, however, are appropriately very skeptical about offsets as appropriate and effective ways to limit emissions. This leaves aviation with a big challenge: develop low-carbon and sustainable fuels at a competitive price and commercial scale or face mounting pressures to curtail growth.  Fortunately, industry leaders such as Boeing, Alaska Airlines, and others remain committed to this goal.

Confronting the Core Challenges: Getting to Scale and Cost Parity

The report unveiled at the Port of Seattle event addresses the biggest hurdle that promoters of sustainable aviation fuels still need to clear: producing cleaner alternatives at a competitive price and commercial scale. Obviously, these issues are interlinked; most demonstration flights to date were conducted using relatively small amounts of fuels batch-produced for a special purpose and involving long and inefficient supply chains.

Meanwhile, the same fracking revolution that has been critical in undermining coal’s competitiveness globally has resulted in persistently low prices for fossil-based jet fuel.  Although the cost premium for sustainable fuels has declined dramatically over the past decade, we are still a significant distance from cost-competitive sustainable fuels for aviation.  Hence, building commercial-scale production facilities will require billion-dollar plus investments that need to be financed based on off-take agreements and stable government policies that incentivize fuel production.

Innovative Funding for Sustainable Aviation Fuel at U.S. Airports, was prepared by a Dutch company that has been a pioneer in this sector, SkyNRG, together with Carbon War Room, a project of the Rocky Mountain Institute.  Drawing on best practices from Norway, Sweden, the Netherlands, and other places where public-private partnerships are taking sustainable aviation fuels to scale, the consultants identified ways that the Port of Seattle could support its goals to reduce emissions from aviation and make SeaTac Airport a hub for cleaner flight.

The report is worth reading in detail, but a summary of the key recommendations includes: mobilizing corporate support for fuels; monetizing benefits from reduced air pollution and other advantages; and exploring an agreement among the airlines using the airport to support the purchase of sustainable fuels. The report noted that truly leading on this effort will require increasing public support for biofuel incentives and prioritizing sustainable fuels in airport operations.

Will We Get There? The Challenge for Northwest Leadership

The Northwest has some key advantages, highlighted in the SAFN report, that make it a credible contender to lead the effort to take sustainable jet fuels to scale. These include the huge presence of a committed aviation industry; abundant feedstocks from forests, agriculture, and municipal wastes; a culture of technological and entrepreneurial leadership; and world-leading research capabilities that have been focused on building supply chains and efficient processing technologies to produce sustainable aviation fuels.

Our biggest challenge is complacency.  The SAFN report contained a number of top recommendations for actions that we need to take if we are really serious about addressing this challenge. In a brief presentation at the Port event, I graded our progress on these recommendations.

We have made significant progress on some of the key recommendations (notably maintaining a strategic focus on sustainable aviation fuels and securing financial support for targeted research and development efforts led by our major research universities).  We have been unable, however, to promote the kind of stable, long-term policy that will attract investment in sustainable fuel development.

Most notably, oil industry lobbying has stymied efforts to adopt a low-carbon fuel standard (also known as a clean fuel standard) in Washington State. This type of policy–passed in California, Oregon, and British Columbia, and currently slated for adoption in Canada–is critical to support significant investments in major biofuel capacity.

It’s important to recognize that the oil industry rose to its current position of economic dominance through massive and continued subsidies. To cite just one example, a recent study from the Stockholm Environmental Institute concluded that approximately half of the oil production in the U.S. is only profitable at current prices due to explicit and implicit subsidies. It is unrealistic to expect a new industry to attract adequate investment and become price-competitive without focused public policies and incentives.

Every day brings further confirmation of the urgency of the climate crisis and our need to rapidly transition from fossil fuels to cleaner alternatives. Every sector of the economy requires unique solutions to achieve this massive transition and few areas present a bigger challenge than decarbonizing aviation. Fortunately, we can build on the strong foundation of cooperation between industry, government, and advocates to face this challenge together and usher in a new era of low-carbon flight.

Ross Macfarlane

Board Secretary
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