United Airlines handout On Tuesday, United plans to announce a US$30-million investment in one of the largest producers of aviation biofuels, Fulcrum BioEnergy, the biggest investment so far by a domestic airline in the small but growing field of alternative fuels.
Sometime this summer, a United Airlines flight will take off from Los Angeles International Airport bound for San Francisco using fuel generated from farm waste and oils derived from animal fats.
For passengers, little will be different — the engines will still roar, the seats in economy will still be cramped — but for the airlines and the biofuels industry, the flight will represent a long-awaited milestone: The first time a domestic airline operates regular passenger flights using an alternative jet fuel.
For years, biofuels have been seen as an important part of the solution to reducing greenhouse gas emissions. And airlines, with their concentration around airports and use of the same kind of fuel, have been seen as a promising customer in a biofuels industry that has struggled to gain traction.
Now that relationship is showing signs of taking off.
On Tuesday, United plans to announce a US$30-million investment in one of the largest producers of aviation biofuels, Fulcrum BioEnergy, the biggest investment so far by a domestic airline in the small but growing field of alternative fuels. (Cathay Pacific, based in Hong Kong, last year announced a smaller investment in Fulcrum.)
The quantities that United is planning to buy from Fulcrum constitute a small drop in its voluminous fuel consumption. Last year, United’s fleet consumed 3.9 billion gallons of fuel, at a cost of US$11.6-billion.
But airlines are increasingly under pressure to reduce carbon emissions. The Obama administration proposed this month that new limits on aviation emissions be developed, and the International Civil Aviation Organization, a United Nations agency, is expected to complete its own negotiations on limiting carbon pollution by February 2016.
“There is a significant role for biofuels within the aviation sector, specifically for reducing carbon emissions,” said Debbie Hammel, a senior resource specialist at the Natural Resources Defense Council, who focuses on biofuel.
Airlines, in turn, say they have every reason to adapt, not only to reduce pollution but also to lower what is usually their biggest cost: jet fuel.
United Airlines handoutFulcrum said its technology can cut an airline’s carbon emissions by 80 percent compared with traditional jet fuel.
Fulcrum, a California-based company, has developed and certified a technology that turns municipal waste — household trash — into sustainable aviation fuel, a kind that can be blended in directly with traditional jet fuels. It is currently building a biofuel refinery in Nevada to open in 2017, and has plans for five more plants around the country.
Fulcrum said its technology can cut an airline’s carbon emissions by 80 percent compared with traditional jet fuel. “There is definitely a huge interest from airlines in this market,” said Angela Foster-Rice, United’s managing director for environmental affairs and sustainability.
United’s deal with Fulcrum is one of many that airlines have made in recent years.
Alaska Airlines aims to use biofuels at least at one of its airports by 2020. Southwest Airlines announced last year that it would purchase about 3 million gallons a year of jet fuel made from wood residues from Red Rock Biofuels. The first blend of this new fuel product, however, won’t be available until 2016.
Last year, British Airways joined with Solena Fuels to build a biofuel refinery near London’s Heathrow Airport, which will be completed by 2017.
United’s deal is the airline’s second major push toward alternative fuels. In 2013, the airline agreed to buy 15 million gallons of biofuels over three years with a California-based producer called AltAir Fuels, which makes biofuels out of nonedible natural oils and agricultural waste. It expects that the first 5 million gallons from AltAir will be delivered this summer at its Los Angeles International Airport hub to help power the flights to San Francisco.
For the first two weeks, four to five flights a day will carry a fuel mixture that is 30 percent biofuel and 70 percent traditional jet fuel; after that, the fuel will be blended into the overall supply, United said.
“The AltAir project serves as a catalyst intended to pave the way for the industry,” Foster-Rice said. By burning biofuel products like farm waste that have already absorbed carbon during their lifetime, jet engines avoid introducing into the atmosphere new carbon from a fossil fuel that has been locked away, underground, for millions of years.
And the airlines seem to have little choice. For example, airlines, unlike automakers, cannot turn to other options like electrification, said Hammel of the Natural Resources Defense Council, which is why it is important, she added, that the fuels be sustainably produced. But despite the airlines’ interest, there are still substantial hurdles to the large-scale development of biofuels – most notably reasonable cost and reliable supplies.
“It remains quite difficult to get biofuels for aviation that is cost-effective, and to make sure the fuels will be available,” Foster-Rice said. The airline conducted its first test flight in 2009, with biofuels from algae.
Then there is the issue of where the biofuels companies get their raw material. E. James Macias, Fulcrum’s chief executive, said that the company had secured 20-year agreements from municipal waste management companies, including Waste Management, to provide stable supplies for the company’s projects.
He said Fulcrum could produce its biofuel for “a lot less than” US$1 a gallon. (United bought its jet fuel for US$2.11 a gallon, on average, in the first quarter, and said its deal with Fulcrum was competitive with the price of traditional jet fuel.)
“We are producing very large volumes at a very good price,” Macias said. Financial terms of the agreement were not disclosed, and neither company disclosed the size of United’s equity stake in Fulcrum.
Behind the deals is pressure on airlines to reduce carbon pollution. Although they account for about 2 percent of global carbon emissions, airlines are one of the fastest-growing sources of carbon pollution around the world.
Separately from the Obama administration’s recent push, commercial airlines have already voluntarily committed to limit the growth of their carbon emissions to 2 percent a year through 2020, then cap emission growth after that. By 2050, the industry hopes to cut its greenhouse gas emissions to half of their 2005 levels, according to the International Air Transport Association. But getting there will not be easy.
“That is why it is important to actually invest, and be willing to take on some of the risk,” Foster-Rice said, “and encourage the companies to really focus on jet fuel at a cost-competitive price.”