Biofuel technically viable for aviation but financing is the problem

Second-generation jet biofuel derived from nonfood sources such as jatropha, camelina and algae is technologically feasible and has been proven in flight, but financing production of large enough quantities to power airline operations on any significant scale remains a formidable obstacle, according to experts who spoke last week at ATW's Eco-Aviation Conference in Washington.

"Our view is that drop-in aviation biofuels are here and ready today," Honeywell UOP VP and GM-Renewable Energy and Chemicals James Rekoske said. "Technologically we have a path." But the remaining "hurdles" are "broader availability of feedstock and mitigating financial risk."

Commercial Aviation Alternative Fuels Initiative Executive Director Richard Altman added, "Quite frankly, the private financial institutions don't want to take the risk [of investing in biofuel production]. It's just that simple." American Airlines Director-Fuel Management John Rau commented, "What's really needed is long-term credit for [biofuel] suppliers. So there may be some help needed from the government."

Despite the financial uncertainty, airlines cannot afford not to pursue biofuels, Rau said. Both crude oil prices and the "crack spread" between base crude and jet fuel are "very volatile," leaving carriers vulnerable to dramatic market swings that complicate long-term planning and general stability. As a result, airlines are seeking "another fuel where we can minimize this volatility." He added, "We have to be proactive to make this happen. Airlines need alternative fuels and alternative fuels need airlines."

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