(Bloomberg) -- For years, airlines have experimented with biofuels, aiming to reduce both carbon emissions and their reliance on fossil fuels. It’s been a turbulent journey, buffeted by inconsistent investment and the periodic lure of cheap oil.
But several major carriers are planning larger-scale usage of biofuel in 2019 and 2020, including United Continental Holdings Inc., JetBlue Airways Corp. and Cathay Pacific Airways Ltd.
Airlines account for about 2 percent of annual global carbon emissions, but the industry’s rapid growth and future expansion across emerging markets has made aviation’s environmental impact a top issue for executives and regulators.
“I would describe the biofuels in aviation as an evolution over time,” said Aaron Robinson senior manager environmental strategy and sustainability for Chicago-based United, which first made biofuel part of its routine operations in 2016 at its Los Angeles hub. The company in 2015 invested $30 million for a stake in Fulcrum BioEnergy Inc., which takes household solid waste and converts it to a liquid that is blended with regular jet fuel.
Beyond the supply at LAX, airports in Oslo, Stockholm and Bergen, Norway, offer biofuels to blend into existing fuel supplies. As of June, more than 130,000 commercial flights have been powered by biofuel, according to the International Air Transport Association, the airlines’ global trade group. Such flights are currently limited by industry standard to a maximum 50 percent blend with regular jet fuel.
The biofuel in Los Angeles, supplied by World Energy LLC, is refined near the airport and is “cost-competitive” with traditional fuel, Robinson said Thursday in an interview. “Five years ago, the question was how are we going to have enough plants to be able to do it?” he said. “Today I think the real question is, ‘What is the financing?’”
Part of that investment is coming from the airlines. Next year, JetBlue plans to begin taking delivery of about 33 million gallons of biofuel annually as part of a 10-year deal with Philadelphia-based SG Preston Co. The fuel agreement will cover about 20 percent of the airline’s annual fuel use at JFK International Airport.
Cathay Pacific and Qantas Airways Ltd. also have large biofuel supply agreements that begin in 2019 and 2020, respectively, according to IATA.
On Thursday, United announced it would cut its carbon emissions by half over 2005 levels, by 2050, matching an industrywide target set by IATA. But that goal doesn’t spell out “the individual responsibilities of each airline,” Robinson said, which is one reason United sought to commit to the target individually. The carrier plans to achieve its goal through greater use of biofuel and more efficient aircraft.
United plans to purchase nearly 1 billion gallons of biofuel from Fulcrum over 10 years. The California-based company broke ground in May east of Reno, Nevada on a plant to convert residential waste into fuel. Starting in 2020, Fulcrum expects to produce 10.5 million gallons of fuel annually at the plant. The company plans to open a second plant to supply United.
Not all of United’s biofuel will come from garbage. Approximately 30 percent of the fuel load on the airline’s daily Boeing 787 flight from San Francisco to Zurich will be Carinata, a biofuel derived from a type of mustard seed.
©2018 Bloomberg L.P.