Cost of green jet fuel could match kerosene by 2018

The cost of some aviation biofuels produced from non-food vegetable oils could reach parity with conventional fuels by 2018 if production efficiencies continue to improve, analysts have said.

Jet fuels made from plants such as jatropha or camelina, or from pyrolysis of cellulosic feedstocks, are likely to be the first alternative jet fuels to become cost-competitive, reaching prices of around $0.86 per litre ny 2018, according to new research from Bloomberg New Energy Finance (BNEF).

However, those fuels based on edible vegetable oils such as soybean, rapeseed and palm may never become fully competitive, even though airlines may use them more over the next few years to improve their environmental credentials and gain experience of how biofuels work.

Airlines such as Lufthansa, Virgin and BA have all experimented with biofuels, although the move has angered green campaigners who argue many biofuel feedstocks take land away from food crops and can lead to rainforest clearance.

Airlines are under increasing pressure to cut their emissions, which currently account for around three per cent of the global total - more than the UK - in the face of spiralling oil prices and the advent of emissions trading in Europe.

As a result the International Air Transport Association (IATA) has called for six per cent of global jet fuel, equivalent to eight billion litres, to be provided by biofuels by 2020.

However, Harry Boyle, lead bioenergy analyst at BNEF, said government intervention - potentially similar to the US government mandate requiring that 18 billion gallons (68bn litres) of road transport fuel be sourced from next-generation biofuel by 2022 - may be needed to drive uptake of jet biofuels.

“The problem is that for the foreseeable future, even when the economics make sense, there will simply be limited availability of certified and relatively low-cost biofuel,” he said in a statement.

“If governments want airlines to burn a significant proportion of non-fossil fuel before 2020, they will have either to subsidise advanced-but-not-yet-economic biofuels or, more likely, introduce mandates requiring carriers to use a certain percentage of sustainable biofuels in their mix, and put up with complaints that this is driving up ticket prices.”

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