Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  In Florida, Virgin Atlantic CEO Craig Kreeger, LanzaTech CEO Jennifer Holmgren, a cadre of Virgin Atlantic and LanzaTech team members, industry stakeholders and a group of pleasantly surprised transatlantic passengers have boarded a Boeing 747 for Virgin’s VS16 light to London Gatwick — in an historic first for aviation, it’s the first commercial flight on fuel made from waste carbon gases.

We had reported on the news of the impending flight, last month, here.

Passengers on the historic flight were welcomed upon landing by a familiar face on arrival as the airline’s founder Sir Richard Branson marshalled the aircraft into stand. This flight follows hot on the heels of a £410K UK government Future Fuels for Flight and Freight grant to determine the feasibility of building a 40-50million US gallon jet fuel plant in Britain.

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LanzaTech CEO Jennifer Holmgren added, “Who would ever imagine that a steel mill could make the steel for the plane and with its waste gases make the fuel for that flight? This fuel started in a steel mill in China and it was converted to jet fuel in Georgia. They tell us that climate change is a problem that is too big for us for solve. It takes innovation, will and regulation. Today the plane is fueled by innovation. But also by strong will.”

LanzaTech plans to have 125 million gallons in annual production at three UK-based facilities by 2025. Part of what is becoming a sprawling portfolio of projects in the EU, India, China and the US to produce Lanzajet, Lanzanol, and ultimately what we might one day be calling LanzaChems. More about the latest in the LanzaTech story, here.

And here’s a LanzaTech Multi-Slide Guide. And some perspective on why Virgin loves LanzaTech and vice-versa, here.

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But aviation has been a special case, because the targets set by IATA are not a case of industry greenwashing but, in many ways, the spearhead of an urgent mission to avoid country-by-country airline emissions regulations. You can imagine the nightmare of taking off under one regulatory regime, flying over three others and emitting therein, and landing in a fifth. The paperwork alone, and the juggling of feedstocks, technology, data reporting and so forth would be a complete nightmare.

And, alternatives to alternative fuels do not abound.

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Technically, we know that we can. Whether we use plant- or residue-based oils and hydrotreat them to make a qualifying jet fuel, or upgrade alcohols produced from plants or residues to jet fuel, we know we can do it. There have been hundreds of successful flights on sustainable aviation fuel blends.

And today’s flight was another historic first in that respect. Making ethanol from carbon dioxide generated by steel mill waste gases is tough enough — but developing a process to upgrade those alcohols to a finished jet fuel is quite another. LanzaTech is among the very few that have developed and demonstrated such a process at scale — and it opens up a world of feedstocks to jet fuel. Suddenly, off-gases from mills become available as a carbon source for jet fuels, and there are as many as 30B gallons of jet fuel that could be made were all the off-gases to be captured and utilized, according to LanzaTech. Not to mention the vast resources of landfilled MSW or terrestrial biomass that can be utilized by this process (and others, including Fulcrums’, and Red Rock’s which we wrote about here and here).

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Ahem, the “will we?” comes down to a couple of very specific problems that need to get solved, and they won’t get solved by the same answers and strategies that helped us through Should We? and Can We?.

And, unfortunately, we have to begin with some hard and unpleasant facts which have little to do with the efficacy or performance of the fuels or the urgency that we use them to solve widely-agreed air transport decarbonization challenges.

We can summarize them in four We Will of Will Nots.

1. We will (or will not) establish financial risk mitigation strategies that work for new air transport technologies.

2. We will (or will not) establish a global air transportation decarbonization policy that unlocks  sustainable, affordable, reliable available feedstocks, and establishes a viable market for low-carbon fuels — so that polluters pay for technologies that vent excessive emissions compared to emerging technologies.

3. We will (or will not) invest in deploying these technologies at scale and remove pointless obstacles that prevent same.

4. We will (or will not) bring consumer pressure to bear by distinguishing between sustainable flights and non-sustainable flights, the same way we distinguish between organic and non-organic foods, fair trade coffee and its alternative, and so on.

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Let’s chat about these for a moment.

1. It is not enough to have a reliable technology and a business plan that models out a favorable return for investors. Leaving aside first-of-kind technology risk, there’s operational risk (it rusts or becomes obsolete more quickly than expected), policy risk (absence, reversal, churning modification), commodity risk (upside down economics), supply chain risk (you can’t find feedstocks near to the plant, because conditions change), consumer risk (fickle customers, the advent of new technology, bankrupted or impoverished customers), incumbent risk (disruptive anti-change messaging, policy manipulation, “buy and kill” M&A policy, predatory price manipulation), and so on. A project thrives only when all of the variables come in at favorable levels, and the uncertainty alone can skyrocket the cost of capital.

2. The US Renewable Fuel Standard and the California Low Carbon Fuel Standard, as originally enshrined, offered a (in today’s market) a $2.70 or so financial incentive in RINs and CARB credits for cellulosic ethanol, and nothing for sustainable aviation fuels. So, considering that it takes around 2.1 gallons of cellulosic ethanol to make a gallon of jet fuel, US policy is currently offering ethanol producers an incentive NOT TO MAKE JET FUEL that totals around $2.90 per gallon right now. That’s completely backwards. Airlines want these fuels more than oilcos do. Environmentalists support sustainable aviation fuels to the extent that they support aviation at all. They’re drop-in replacements that require no infrastructure change. So why are we offering a $5.40 per gallon incentive not to make it?

I think you are about to remark that this situation pertains only to the US market and jet fuels are global, so they could simply be made elsewhere and shipped to the US and claim credits in another regime. And there’s something in that. Except to say that none of Canada, the EU, India, Brazil or China have an effective policy that solves this problem of killing two carbon credits (ethanol) to make one carbon credit (jet fuel), either. Carbon credit destruction is a big problem, and needs to be addressed through international treaty with ratifying parties pledging to enact enabling legislation at home. And it probably needs to be a separate regime from road transport, because air transport is too fantastically different from road in almost every important aspect, like volumes, use cases, fuels types and the need for intermediates.

3. There are too many pointless obstructions in the financing of renewables, compared to financing almost anything else. The unavailability of master limited partnerships as an investment structure. The inability to count renewable assets in assessing a company’s balance sheet. The lack of credit default swaps. The lack of trained people to assess projects from a financing and engineering POV. The lack of public commodity-buying vehicles for institutionals to invest in. Just to name a few. There ’s $200 trillion in available finance worldwide and it’s a joke what goes into renewables and much of that has to do more with financing structures and personnel.

4. Why can’t we simply see if a flight is sustainable when it comes time to book a ticket. We know this is important to flying customers. And other concerns of theirs are reported — safety record, on-time arrival, availability of connecting flights, meal service, cabin layout, seat cost, upgrade availability, and on and on and on. You can find out more about the chain of custody of a plum, than you can know about the chain of custody of the fuel that powers us around the world. We’re addressing conflict diamonds — why can’t we address sustainable fuels?  READ MORE

Virgin Atlantic Celebrates Milestone Flight With Sustainable Fuel (NGT  News)

Biofuel made from industrial waste gasses used for first time on commercial flight (TVNZ)

DAILY BRIEFING: Branson welcomes the first commercial flight using new biofuel converted from industrial waste gases (Daily Mail)

Excerpt from NGT News:  “As a fuel provider, EPIC Fuels recognizes the need to find alternatives to petroleum-only-based jet fuel,” adds Kai Sorenson, director of commercial sales for EPIC Fuels. “We’ve participated in multiple demonstration flights to identify and fast-track technologies that can improve the environmental performance of aviation and gained unmatched experience with blending fuels.”  READ MORE