Renewable/Bio Jet Fuel Market trends research and projections for 2017-2025

The need for the use of environmental friendly jet fuel in order to reduce the greenhouse gas emissions from the aviation sector is a major driver for the bio jet market. The first test flight with bio jet fuel was completed in 2008 by Virgin Atlantic. Despite the need and airline support for bio jet, producers struggle to make renewable fuel cost-competitive with fossil fuels. Currently, biojet fuel is supplied through segregated logistics which leads to higher costs thus reducing its demand.

Bio jet is an aviation fuel made from renewable and naturally derived raw materials. It is mixed with petroleum jet fuel and is suitable for use in a jet engine. Biojet fuels have lower greenhouse gas emissions as compared to petroleum jet fuel. A major challenge for the bio jet market, however, is the lack of a viable source for the production of biofuels on a commercial scale which has resulted in the current high bio jet fuel prices, which is leading to the airline companies not buying bio jet fuel on a large scale.

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Currently blends of up to 50% bio jet fuel produced by either the Fischer-Tropsch (FT) process, the Hydro generated esters and fatty acids (HEFA) process or Synthesized Iso-Paraffins (SIP) are used with petroleum jet fuel as aviation fuel mandated by ASTM. HEFA is around 40% more expensive than petrojet, while renewable jet fuels produced by other methods are 60-70% more expensive than conventional petro jet fuel. Hence, bio jet fuel produced by HEFA is found to be more cost effective than other production methods.

Market outlook

The bio jet fuel market is the largest in North America due to its reliance on the fast growing aviation market. The U.S. civil aviation sector accounts for a substantial share in the aviation bio jet market. The planned expansion of aviation biofuel producing industries, along with the support of the Federal Aviation Administration a national authority with powers to regulate all aspects of civil aviation are expected to increase the consumption of biojet fuels in this region. Initiatives taken by various organizations such as SAFN, MASBI are working towards developing cheaper and efficient bio jet fuels. The US Department of Agriculture(USDA), the U.S. Department of Energy (DOE), and the Navy executed an MOU to invest up to US$ 510 million along with the private sector to produce drop-in renewable jet fuel to power military and commercial transportation
In Europe, Oslo Airport became the first airport to offer jet bio-jet to all carriers through its usual supply mechanism in 2016. In the Netherlands in 2013, KLM, SkyNRG, Neste Oil, Schiphol Group, Port of Amsterdam and the Dutch government developed the BioPort Holland supply chain with an aim to boost the bio jet market in Europe. The EU Biofuels Flightpath has a target of producing two MM tones of renewable jet fuels every year by 2020, which is roughly 3%-4% of total jet fuel use in Europe

Emerging countries in the Asia-Pacific and Latin America region, such as India, China, and Brazil are expected to be major players in providing feedstock for aviation biofuel in the future. Also, China aims at reaching 7.5 billion gallons per year of aviation biofuel which will significantly boost the growth of the aviation biofuel market by 2020. In Australia, SkyNRG is working with Brisbane Airport since 2013 to convert it into the first bio port in the Asia-Pacific region.

In January 2014 major companies such as Boeing, Etihad Airways, Takreer, Total along with Masdar Institute of Science and Technology teamed up for 'Biojet Abu Dhabi- Flight Path to Sustainability' developing a regional, sustainable aviation biofuel industry for the Middle East. In Africa, South African Airways with the help of SkyNRG, Boeing were able to fly the first biojet fuel in 2016.

The aviation industry is one of the strongest and fastest growing transport sectors. Due to the growing share of aviation to greenhouse gas emissions and orders issued by various governing bodies the upcoming bio jet market has a lot of potential to grow in the near future. However the bio jet market needs a continuous supply of feedstock at sufficient quantities and at low cost. It needs to be priced competitively with petroleum jet fuel. The increasing competition by other biofuel producers for feedstock will affect feedstock prices, thus hampering the growth of the bio jet fuel market. For the global commercialization of bio jet fuel the aviation sector will need to efficiently use the existing downstream infrastructure to lower transport and production costs. Key players operating in the global bio jet fuel market include Honeywell International Inc., Red Rock Biofuels, Targray Technology International Inc., Vega Biofuels, Argent Energy, GEVO, KFS Biodiesel GmbH & Co. KG, PetroSun, Inc., Shirke Energy, Archer Daniels Midland Company.

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