The global aviation industry is presenting a united front on reducing its environmental impact, but will intense commercial pressures upset the status quo?
While others talk, we take action." Those were the typically blunt words uttered by Qatar Airways' chief executive Akbar al Baker at the early 2010 launch of a collaborative project to develop biofuels for the aviation industry.
He was not joking. The project, the Qatar Advanced Biofuel Platform, along with high profile flights the airline has run (one with revenue passengers) on alternative fuels, has since seen Qatar Airways' stock rise as its geographical and carbon-related footprint extends across the world.
At a recent alternative energy conference in Doha, aviation executives put forward the case for alternative fuels. Rivals Boeing and Airbus shared the podium with Qatar Airways, presenting a united front for an industry battered by volatile, soaring conventional fuel costs and under relentless pressure to reduce its carbon footprint. According to industry estimates, fuel now accounts for about a third of an airline's total operating costs, decimating margins.
"Crude oil is running out and the price is unstable," Captain Chris Schroeder, Qatar Airways' head of corporate social responsibility, environment and fuel optimisation, told delegates at the Qatar Alternative Energy Investors Summit in early April. "Alternative fuels are a way to stabilise costs, and for fast-growing airlines in this region such as Qatar Airways, Emirates and Etihad they are a source of energy security."
Qatar Airways has been tinkering with alternative fuels for several years, and took a major step in this regard on 12 October 2009. To the 240 paying passengers on board the Airbus A340-600 that day it seemed like another routine six-hour flight from London to Doha. But the four engines were running on a 50:50 mix of conventional kerosene and alternative 'gas-to-liquids' (GTL) jet fuel.
The flight was the culmination of a long process of feasibility studies, research, testing and finally certification for the GTL kerosene, an ultra-clean low emissions fuel derived from natural gas. GTL production was pioneered in gas-rich Qatar, lending impetus to Qatar Airways objectives.
Collectively, the aviation industry has reached consensus over achieving 'carbon neutral growth' - expanding the business while cutting emissions - over the next few decades.
Darrin Morgan, director of Biofuel Strategy at US planemaker Boeing, told the conference the fact that aviation growth was outpacing global economic growth lent greater urgency to the search for alternative fuels, even if the aviation industry currently contributes just three per cent of greenhouse gas emissions.
"Other than building better and more efficient airplanes and some efficiencies in aerospace navigation, we can't get to carbon-neutral growth without reducing the carbon footprint of the fuel," he said.
There are several industry-wide initiatives to reach targets and provide a common platform for the development of alternative fuels. Flightpath 2050, set up to develop standards, off-take arrangements and financing for Europe's aviation industry, is one.
"It is one thing to be innovative but you have to do it within a business model that works and fits in with all the other business models in the industry," said John Price, vice president and executive advisor of EADS Innovation Works, the corporate research centre of Airbus' parent company EADS and consortium member of Flighpath 2050.
Highlighting the need for collaboration, Price said his Company's commercial model for alternative fuels fits into the global model out of necessity.
"It is not a commercial model for Airbus or Boeing. It is unthinkable that we can have different fuels for Airbus and Boeing - the whole industry is in this together and we will have one industry standard," he said.
Since Qatar Airways' landmark, technically-successful GTL-powered flight in 2009, there have been any number of test and demonstration flights around the world for alternative fuels, but none has yet come into commercial service, a fact which has disappointed some observers.
In the case of GTL, the chief constraining factor was, until recently, the availability of commercial quantities. However, the completion of Shell's huge Pearl GTL plant in Qatar late last year has now addressed a critical supply-side issue, and that project will supply the new Doha International Airport (officially scheduled to open at the end of 2012) with GTL, which will then be blended with conventional fuel and made available for commercial flights. The national carrier hopes this will be a precursor to 100 per cent GTL jet fuel-powered flights one day.
Biofuels pose a different set of possibilities, challenges and dilemmas to GTL, but the aviation industry is actively pursuing it.
"Biofuels are critical to achieving what we want to achieve by 2050," EADS' Price stressed.
Biofuels have attracted criticism in recent years. Opponents claim growing crops for fuel consumes too much water and land which could otherwise be used for food. Supporters counter that burning biofuels in aircraft engines is carbon neutral, because fuel from plants, which ingest carbon dioxide and release oxygen during natural photosynthesis, simply put the same amounts of carbon dioxide back to the atmosphere when burnt. The aviation industry also argues that there are no technical obstacles relating to aircraft engines using biofuels, since little modification is required.
"There was a backlash [about biofuels] in 2007 to 2009," admitted Morgan. "It was assumed to be the best thing ever but then all of a sudden all these stories started coming back about the negative impact of biofuels. The good thing about that was that it forced a much more serious contemplation within civil society and within biofuels," he responded.
"The good news is we see very clear trends and investment in biological technology to help biofuel feedstocks become more efficient with less land," he added. "And the solutions will be different in different regions - in South America it will be one set of options, in the Gulf region another - this is good for diversification," he said.
Schroeder, however, bemoaned the lack of action among world governments to encourage and support biofuels production, and calls for greater state incentives such as those available in the US and Brazil.
"We see very little input from governments around the world. Look at the European Emissions Trading Scheme - the money that comes out of this trading scheme which aviation has to pay for could go into R&D for aviation biofuels, but there is no mandate for it," he said.
The Qatar Advanced Biofuel Platform is a joint collaboration project between Qatar Airways and Airbus, Qatar Petroleum and the Qatar Science and Technology Park, Qatar University and affiliated partners. It is, says Schroeder, an example of major industry players coming together to find solutions for future aviation challenges. At its heart is a three-year R&D project using algae as the bio-jet fuel feedstock.
"We are going to build a demonstrator in Qatar very soon," he said.
Algae is considered a more environmentally-friendly fuel feedstock because, unlike crops, its cultivation does not require large amounts of water or land. EADS Innovation Works, which has also been conducting research into algae-powered flight, ran the world's first demonstration flight purely on fuel derived from algae at the 2010 Berlin Air Show.
"We're trying not only to prove the fuel is technically viable but also demonstrate that it is a feasible business solution," says Price.
While the algae-powered flight proved a technical success, Price admits it is as yet commercially unrealistic. So while the environmental and technical prognosis for low-impact biofuels is good, the industry's Holy Grail - cost-competitive fuel - remains elusive for now.
"If biofuel is unaffordable, an airline is not going to run it - regardless of the environmental benefits," Morgan says.
And even when competitively-priced biofuels become available, other practical issues must be addressed - ensuring global supply chains, logistics and regulatory frameworks are brought up to speed.
"How do you introduce a new fuel into a system that has been working with one type of fuel for the last 60 years?" Schroeder asks. "Hardly anyone has operational experience other than that used on test flights. We have not seen the benefits of bio jet fuels over a period of time in daily commercial operation," he adds.
Qatar is poised to take the lead in alternative fuels when Doha's new airport opens in a few months equipped to supply GTL blends. Boeing's Morgan thinks Gulf states have a big role to play in terms of biofuels adoption, too.
"There is a groundswell of leadership on this topic in the Gulf region," he says.
As if to illustrate this, Qatar Airways was recently reported to have reached an agreement with Byogy Renewables, a California-based producer of jet fuel made from ethanol, in which it would underwrite a 10 per cent investment in the US firm. According to media reports, as part of the deal Qatar Airways would receive ethanol-based jet fuel, with a view, Schroeder was quoted as saying, to running a "couple of flights to Europe by the end of 2014" with ethanol-sourced jet fuel.
As the diversity and availability of alternative fuels grows, the aviation industry will hope the collaborative good will which has built up in recent years can be sustained.© The Gulf 2012
