Biofuels can cut carbon emissions -- but supply is obstacle

By MARA LEMOS STEIN THE WALL STREET JOURNAL ASIA

The aviation industry is scrambling to find ways of reducing its carbon emissions, including testing biofuels in commercial airliners.

Tests so far show biofuels work as well in the air as on the ground. (In other words, they work.) But a host of issues stand in the way of large-scale production of such fuels for aviation, posing economic, environmental and logistical questions that have no easy solutions.
For example, 85% of the cost of jet fuel made from natural oils is the feedstock, or raw materials, says Jennifer Holmgren, general manager for UOP LLC's Renewable Energy & Chemicals business, a Des Plaines, Ill., refining technology developer. But while a liter of crude oil costs about 24 cents, suppliers of exotic oils say that the three main choices being considered for aviation fuel -- using oils from the jatropha and camelina plants, and from algae -- cost about $1.85 a liter, 79 cents a liter and more than $5 a liter, respectively.
Fuels based purely on oils from these plants performed well in test flights by airlines and jet-engine makers in December and January, says Ms. Holmgren. UOP, a unit of Honeywell International Inc., refined the fuel for the New Zealand Air, Continental Airlines and Japan Airlines flights. When burned, the oils produce less soot and particulate matter than regular jet fuel, Ms. Holmgren says. Also, cultivating and refining the oilseeds produces 50% less greenhouse-gas emissions than regular jet-fuel production, she says.
The aviation industry is under pressure to study alternative fuels because, though responsible for only about 3% of global carbon-dioxide emissions, the industry faces a possible emissions cap by the European Union in coming years. The International Air Transport Association has set a goal for its 230 members to use a blend of 10% alternative fuels by 2017. Commercial airplanes will burn 255 billion liters of jet fuel in 2009, down from about 265 billion liters in both 2008 and 2007, according to the association. By 2017, assuming demand for flights rises, considerably more than 26 billion liters of biofuel is likely to be needed to meet the industry's 10% target.
But the amount of land currently needed to grow even 26 billion liters of oilseed suggests that some areas now used to grow food would be converted for fuel crops, experts say. Moreover, any environmental benefits from reducing carbon-dioxide emissions would probably be partially offset by the additional use of irrigation and fertilizers.
Of the three, algae holds the most promise because of its energy yield and ability to grow in ponds and waste water in desert areas, eliminating the land-use dilemma. But the technology to produce enough algae to make billions of liters of fuel is, at best, five to eight years away, industry experts say. In the meantime, some scientists and agricultural economists believe jatropha and camelina have growing traits and potential for yield improvement that can overcome concerns about land use.
Camelina is a small, oil-rich seed that grows in a flowering plant related to rapeseed and mustard. It grows well in dry areas with fewer applications of fertilizers and herbicides.
Camelina seed yields in Montana can reach an average of 1,125 kilograms per hectare on dry land, says Duane Griffith, extension farm management specialist at Montana State University, in Bozeman. As the plant has 40% oil content, that one hectare yields 450 kilograms of oil, or 205 liters, annually. But to grow enough camelina to produce 26 billion liters of biofuel would take 52 million hectares. By contrast, there are 188 million hectares of arable land in the U.S.
Jatropha, a shrub that grows on marginal land in the tropics, has drawn the attention of development economists because of its potential to lift communities in Africa and Southeast Asia from poverty if it becomes a major feedstock for biofuel.
New York-based Terasol Energy Inc., which provided the jatropha oil refined by UOP for the test flights, says farmers in India and Tanzania currently can harvest just over five metric tons of seed per hectare without fertilizers or herbicides, yielding about 2,300 liters of oil per hectare. Sanjay Pringle, president of Terasol, which is developing alternative oilseed crops for biofuel and for specialty-chemical industries, says India has potentially identified 11 million hectares and Brazil about eight million hectares that could be used to grow jatropha.
Given the challenges of achieving commercial scale for any single oilseed crop, investors and industry experts say the answer may be to develop a catalog of oils instead of picking a single winning crop.
Write to Mara Lemos Stein at mara.lemos-stein@dowjones.com