Clear The Air News Blog Rotating Header Image

October 29th, 2011:

Mainland to invest up to US$300m in biofuels

South China Morning Post – 29 Oct 2011

Airlines are expected to share the costs of building refinery, needed to scale up production, says Boeing

The mainland’s aviation industry is expected to inject as much as US$300 million over the next four years to expand its supply of biofuels, says a senior executive at American aircraft manufacturer Boeing.

Billy Glover, vice-president of environment and aviation policy, said the industry would need a full-scale refinery operation – costing US$200 million to US$300 million – by 2015 in order to meet the global target of replacing 1 per cent of individual countries’ annual jet fuel usage with biofuels.

He made the remark after Air China (SEHK: 0753announcementsnews) successfully completed its first test flight using a biofuel partially produced from jatropha seeds.

The two-hour flight around Beijing by an Air China 747 jumbo jet was a milestone in a partnership formed by the airline, Boeing andPetroChina(SEHK: 0857announcementsnews) earlier this year to research and develop a biofuels supply chain on the mainland.

“The mainland carriers have a really strong role not only in signalling their interests in buying the fuel, but also in demonstration use and other aspects that help producers and refiners to make the commercial go-ahead decision,” Glover said.

Fuel suppliers, airlines and the Chines government are expected to share the costs of the project. Glover said other mainland airlines, besides Air China, had expressed interest in becoming biofuels buyers or developing the supply chain.

The 10,000 tonnes of biofuels used in yesterday’s test flight – produced from jatropha seeds by PetroChina – currently cost twice as much as kerosene, the traditional aviation fuel, and are yet to be economical viable for commercial operations.

However, prices of biofuels are expected to decline with the development of a supply chain. Shen Diancheng, a PetroChina vice-president, told Xinhua yesterday that his company had planted 80,000 hectares of jatropha trees on wastelands in the mountains and hills in Yunnan, Sichuan and Jiangxi provinces.

That is enough to produce 60,000 tonnes (54.5 million litres) of biofuel by the end of 2014. The amount, however, is only about 2.4 per cent of the world’s target capacity of 2.27 billion litres. However, Shen said there were about 800 million mu (53.4 million hectares) of barren hills on the mainland suitable for growing jatropha seeds.

Algae – another promising feedstock that could yield 15 times more oil than other crops – had also emerged from the laboratory recently and test planting had begun in Pingdu, Qingdao, Glover said.

Air China is expected to launch another test flight across the Pacific Ocean to a North American city in the next few months.

Airlines around the world are scrambling to find cleaner and more sustainable fuels to replace fossil fuels in a bid to fight global warming, as well as stricter emission caps.