Aviation Biofuel and the Other Fuels from the Economic Perspective - Research Paper Example

Comparison between aviation bio-fuel and other fuels Introduction Aviation biofuel is used for aircraft and is considered largely as one of the basic means by which aviation industry can reduce carbon production. Following several years of technical review from engine manufacturers, oil producing companies, and aircraft makers, biofuels were approved for commercial use than other fuels in the year 2011. While fuels such as electric, solar, and hydrogen driven aircrafts are being researched, there is no possibility that they will be in the near term because of the need for high power and worldwide friendly infrastructure. The use of aviation biofuel is likely to transform aviation business as it provides a sustainable method to generate the necessary energy as compared to other fuels. As compared to renewable fuels, biofuels are not cost-competitive with their fossil correspondents. Major variable for biofuel competitiveness is in the price of crude oil. For instance, at an oil price of $100/bbl, a huge variety of biofuel alternatives becomes competitive. The prices of avoided carbon dioxide emissions can add significantly to the competitiveness of biofuels (Rhodes 2008). However, CO2 performance differs widely with biofuels , noting that its 2nd generation options score between 60 to 70 Kg CO2 per GJ fuel, while conventional biofuels are influenced by learning rates, that s, in conversion technology, biomass feedstock production , and by probable upward pressures on prices of feedstock due to an increase in land scarcity. Second generation biofuels have higher costs, but higher learning potentials with less vulnerability to land scarcity. Globalization of CO2 emission costs, noticeable cost reductions due to feedstock and stable oil prices will lead to a case where various types of biolfuels will be competitive. Unlike other renewable fuels, aviation biofuels are not subjected to mandates or feed-in-tariffs. Policy mechanisms have been put forward to incentivize sustainable aviation biofuel growth, but oil prices are a far greater driver and so its effects are limited. The market of aviation biofuels is basically driven by other factors such as reduced dependence on fossils and improved carbon footprint. Consequently, aviation biofuels are exposed to very narrow policy risks. Aircrafts cannot use other resources such as hydroelectric power, solar, plug-in, and wind. Thus, crafting policies which develop a level playing role for biofuels versus other energy resources, and aviation versus other sectors is a major element in biofuels commercialization (Arthur & Shaun (2008). Aviation biofuels have the ability of directly substituting and mixing with traditional plane fuel, called jet A-1 and jet A and have the same characteristics and qualities to enable high performance for jet engines. This is important to make sure that manufacturers are not forced to redesign aircrafts or engines and that airports and fuel supplies do not have to create new fuel delivery systems. In contrast, other fuels such as ethanol and diesel are not suitable to power commercial aircrafts. Most of these fuels do not meet the safety specifications and high performance for jet fuel. According to (Babcock & Tréguer, 2011). Fossil fuels have a 100-year head start as compared to aviation biofuels, which are new in technology. Efforts by government should be concerted to foster these advantageous renewable alternatives to achieve their aim of long-term viability. To support this are two major tendencies developing in fuel economics. First, fossil fuels are more likely to become increasingly limited and consequently, will become more expensive. Secondly, aviation biofuels that emerge from sustainable feedstock are likely to become less expensive as the pertinent business and science models expand. It is estimated that nearly 85% of biofuel manufacturing costs relates to the feedstock costs. As technology to process and harvest these feedstock continues, and as they avail themselves in commercial capacities, the price will drop (Fleming, 2009). Different companies are also coming up with ways to refine superior biofuels, by use of bacteria and varying natural processes, economical refinement and conversion, or use of cheaper feedstock like waste products. Due to their renewable nature, this feedstock if grown sustainably will not be exhausted, contrary to other fossil energy sources like crude oil. A comparison may also be in terms of the projected costs of the major options for aviation biofuels with the crude projected costs, with and without a carbon price. The wholesale cost for Jet fuel was approximated at 2050 based on DECC oil price hypothesis to 2030, in four situations. From 2030-2050, it was assumed that prices will continue as the trend before 2030. A product track of $8.25 per bbl was an addition to the price of oil, based on the spread between jet fuel and crude oil. This variability is due to the interaction between the increasing demand for aviation, and variation in crude oil production in response to refinery capacity and gasoline demand, and is wider than the difference seen in the gasoline crack. The crack spread for jet is likely to continue varying widely, and could increase with time, the demand for oil products decrease in some regions (Rhodes, 2008). According to a SWAEFA research, reaching the aviation’s goal of zero carbon growth by the year 2030 will need 225 refineries a similar size of Nestle Oil’s huge, 800,000 tones once a year. One such refinery will need 200,000 hectares of oil palm farm and even more land required for other existing feedstock. This implies that at least 45 million hectares of land would be required to meet the official goal of the International Air Transport Association In comparison, oil palm plantations utilize just more than 12 million hectares of land globally at present and the overall land area used to grow biofuels ranges between 20-25 million hectares. Conclusion Individual airlines use a figure of 80% for the total quantity of CO2 that they assume can be saved by aviation bio-fuels as compared to conventional fuels and that biofuels are carbon neutral. Moreover, aviation bio-fuels can lead to more difficulties than fossil fuels, which are intended to replace. Most aviation biofuels cause land grabs, deforestation, increased food prices, and biodiversity loss. Certification criteria and sustainability schemes cannot solve these issues, but rather encourage the aviation industry to promote the unsustainable expansion of biofuels industry. References Arthur S, Wankel C, and Shaun K. (2008). Global Sustainability Initiatives: New Models and New Approaches. New York: IAP, 2008. Babcock, B., Marette, S., & Tréguer, D. (2011). Opportunity for profitable investments in cellulosic biofuels. Energy Policy. New York: Springer. Fleming S. (2009). Aviation and Climate Change: Aircraft Emissions Expected to Grow. London: DIANE Publishing. Rhodes L, (2008). Evolution of International Aviation: Phoenix Rising. Chicago: Ashgate Publishing, Ltd., 2008. Read More