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Jet bio-fuel prices set to drop

 Analysts have reported that some of the aviation bio-fuels that are produced from non food vegetable oil could reach cost parity with the conventional fuels by as soon as 2018 id the efficiency of production continues to improve.

Jet fuels that are made from plants such as camelina and jatropha, or from the pyrolysis of cellulosic food stocks were likely to be the first of the alternative jet fuels to become competitive price wise.

The analysts predicts that these could reach, by 2018, around $0.86 a litre, according to the latest research from BNEF, Bloomberg New Energy Finance. Those fuels that are based on edible vegetable oils such as rapeseed, palm and soybean however may never become fully competitive price wise, even though it is expected that airlines will use them over the next few years to improve their green credentials and learn more about bio-fuels.

Airlines such as BA, Virgin and Lufthansa have all experimented with bio-fuels, even though the move has angered many green campaigners who argue that many bio-fuel food stocks are taking away land from food crops, and could lead to a rainforest clearance. They are is constant and increasing pressure on airlines to cut their carbon emissions, which are currently accounting for 3% of the global total.

As a direct result of this the IATA, International Air Transport Association, has called for 6% of global jet fuel, which equates to around 8bn litres, to be come from bio-fuels by 2020. Harry Boyle is the leading bio-energy analyst at BNEF, and he has said that government intervention, similar to the US mandate requiring 68bn litres of road fuel to be sourced from bio-fuel by 2022, is needed to drive the uptake of jet bio-fuels.

Mr Boyle said in a statement that the main problem was that for the foreseeable future, even with the economics making sense, there was going to be a limited availability of the certified and relatively low cost bio-fuels. He added that if governments want airlines to burn significant proportions of non fossil fuels before 2020 they would have to either subsidise the as yet uneconomical bio-fuels or introduce a mandate as the US have.

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