Airlines’ slow shift to Alternative Fuels

US airlines burn through fuel. The industry uses 1,440,000[1] barrels of jet fuel per day. At a rate of $66.5/barrel[2], the US airline industry spends $95.76 million every day to fuel its planes. Jet fuel is the largest expenditure for airlines with fuel costs accounting for around 10% of an airline’s operating costs.[3]

Jet fuel prices are volatile and a significant portion of an airline’s expenses. To mitigate this price variability, airlines buy futures contracts to fix their jet fuel prices for a period (typically 6 months). While these contracts protect the airline from jet fuel price volatility, many airlines are exploring other options to reduce the cost of fuel and diversify their fuel sources. A large push in this direction is the development of Sustainable Alternative Jet Fuels (SAJFs) to provide more price stability and a greener footprint for the industry.

The US Department of Energy has partnered with several airlines in an initiative called Farm to Fly 2.0 to encourage the development of SAJF technologies and second-generation drop-in SAJF. Drop-in fuels are alternative fuels that are compatible with existing aircraft and infrastructure. They can be mixed with traditional airline fuels as well. Currently, SAJF technologies have focused on using forest residuals, algae and/or jatropha to create second-generation drop-in fuels. Second-generation fuels are fuels that are derived from non-food crop sources and can be mass grown in a variety of locations.[4]

Forest Residuals

Forest residuals are being pursued as a viable source of biofuel for airlines. Research by the Northwest Advanced Renewables Alliance has led to the development of a sustainable supply chain for jet fuel using the residuals from logging operations. Alaska Airlines is the American pioneer in forest residual based jet fuels. The airline powered a jet-fuel blend containing 20% SAJF and 80% traditional fuel in a flight from Seattle to Washington D.C. It’s the first commercial flight to run partly on wood. The jet fuel was produced by Gevo, a biofuels company that uses forest residuals to convert cellulosic sugars into isobutanol.[5]

FedEx is another company that’s agreed to push for use of alternative jet fuels. The company is set to purchase 3 million gallons of biofuel annually from Red Rock Biofuels in its pledge to obtain 30% of jet fuel from alternative sources by 2030.[6] Red Rock Biofuels specializes in forest residual based fuels.

Algae and Jatropha

Algae is a promising source of fuel for airlines because these tiny organisms can be grown in salt water, deserts and inhospitable places. Like most plants, they intake carbon dioxide and produce a lot of oil. Algae requires very little space (68,000 sq km) to fuel the world airline industry.[7] This is by far the most efficient space-wise, but producing SAJF out of algae is far from economically being able to compete with traditional fuel and is not the most cost-efficient when compared to other second-generation sustainable alternative jet fuels primarily because concentrated algae production requires algae incubators that are not economically viable yet. Still, plenty of airlines are exploring the potential use of algae for second-generation drop-in SAJFs.

United Airlines partnered with Solazyme to fly the first US flight from Houston to Chicago using a 40% algae drop-in fuel mixed with 60% conventional fuel. Since then, they’ve signed a letter of intent with the company to continue the development of algae jet fuel use in their flights.[8]

Jastropha is a plant that produces a high lipid oil that can be used to make second-generation biofuel. Jatropha is inedible and therefore, it’s primary reason for growth would be for fuel. Like algae, Jastropha can be grown in a variety of harsh climates.[9]

Currently, alternative biofuels are not cost-competitive with traditional fuels. Airlines, government agencies and biofuel companies have invested in SAJF research and biofuel technologies to change that. The development of SAJF technologies will lead to lower cost jet fuels and a diversified jet fuel sourcing opportunity for airlines within the next decade. As SAJF development continues, expect to hear more about flights that are partially run on second-generation drop-in sustainable aviation jet fuels.

By Alex Byron