Flight plan towards sustainable aviation biofuels in Mexico

Expertise in aviation biofuels is being fostered all over the world. In Mexico, a government agency which provides jet fuel to the nation’s airports is taking a lead role in fostering this important green growth opportunity. The challenges are the same as for a lot of nations with similar diversity of landscapes and economic profiles, but it has to be said that with the Plan de Vuelo, Mexico is engaging in an impressive display of ‘joined-up thinking’.

The Mexican Federal Government, following the objectives that the international aviation industry has established, has started an ambitious programme of action to ensure the development and viability of sustainable aviation biofuels in the country. This comprises an active participation within the ICAO framework via the Dirección General de Aeronáutica Civil (DGAC, Mexican Civil Aviation Authority), as well as the design and implementation of a comprehensive far-reaching road-mapping exercise called the “Flight Plan Towards Sustainable Aviation Biofuels in Mexico”, coordinated by Aeropuertos y Servicios Auxiliares (ASA, Airports and Auxiliary Services).

ASA is the sole supplier of jet fuel in Mexico, responsible for all into-plane operations and the management of over 60 fuel farms in the Mexican airport network. In the global context, Mexico represents 2% of the world’s jet fuel market, as it provides close to 10 million litres a day for approximately 2,300 flights comprising what could be termed a “small but big market”.

When considering its position along the supply chain of aviation fuel, being the last link gives ASA a unique viewpoint from which it can act as the promoter and catalyst of the budding aviation biofuel industry in Mexico. ASA’s position as an intermediary client between PEMEX (Mexico’s state-owned oil company) and the airlines, gives it an exceptional lever with which to pull all interested stakeholders along the aviation biofuel value chain.

The flight plan

The main idea behind the Flight Plan Towards Sustainable Aviation Biofuels in Mexico is to analyse the existing and missing links in the supply chain for sustainable biofuels. It is similar to a road-mapping exercise in that it looks into the market drivers, the associated products and services, and the technologies that could help an aviation biofuel industry get off its feet. The main objectives of the Flight Plan are to diagnose the state in which the different parts of the supply chain are, get all the interested stakeholders involved, and communicate to society at large the benefits that aviation biofuels can bring.

A series of workshops for the Flight Plan were designed using a schematic view of the supply chain. Given that the premise of biofuels is that they will lower the carbon footprint in comparison to fossil fuels, the first workshop was organised to look into the general problematic of this type of energy, and specifically to the sustainability issues that need to be observed across the supply chain.

The other workshops were organised so that all the points across the supply chain could be analysed, including:

• raw materials and extraction;
• infrastructure and refining; and
• financing, legislation, logistics and distribution.

A two-pronged approach was followed in which specific subject matters were addressed, as well as looking into cross-sectional or longitudinal themes that are present across the supply chain. The exercise started with a contact list of around 100 people, and as it progressed, it grew over 10 times to a network of over 1,000 stakeholders. With an average audience of 120 persons throughout this project, all the principal actors, as well as governmental, financial, private, academic and research institutions, gathered in the same forum sharing their ideas, proposals, experience and commitment in this huge global challenge. It is important to note that in the design and implementation of the Flight Plan, ASA received the support of several organisations, especially from The Boeing Company and the Roundtable on Sustainable Biofuels (RSB).

Analysis of the supply chain

Mexico is the fourth most diverse country in the world with 5,870,921 hectares with high productive potential. The analysis of the different feedstocks resulted in several candidates that could be developed into second generation sources: jatropha, castor, salicornia, agave and algae. Most of these plants are indigenous to the country and have been harvested for many generations as they grow in the wild in many regions of the countryside. In fact, there is advanced biofuel feedstock production in a number of Mexico’s states, taking into account local species and most suitable crops for each growing condition.

The production of vegetable oil is an important topic, since much of the installed capacity is underused. For many years, the vegetable oil industry has been in on standby, as many of the usual vegetable oil generating feedstocks have not been produced in Mexico for some time due to lack of water or adequate land. In the end, the oil extracted to produce a biofuel is independent of the source, so the promotion of viable second generation sources is critical. One other consideration is the use that will be given to the residual biomass that is produced, and the secondary markets where it can be utilised. There is also another important issue to be considered – the current crude vegetable oil cannot meet the current specification for the refining process, and so a pre-refining process is needed.

In terms of the refining industry, Mexico has historically been handicapped in the production of the necessary fuels to feed the requirements of its economy. However, in the production of jet fuel, the country has always been self sufficient. In this sense, it is in the interest of ASA to guarantee the production of aviation biofuels, so that Mexico has the capacity to meet its future internal demand. ASA has, therefore, found an economic case for planning specific refining capacity. In fact, by 2020 with the right funding structure in place, it is expected that up to four aviation biofuel specific refineries will be operating in Mexico, generating 800 million litres of sustainable aviation biofuel. There are important legal obstacles that need to be overcome, as some of the by-products of the refining process can only be managed by the national oil company – PEMEX. Beyond this, the current biggest jet fuel market in the world is just north of the country, so any surpluses that are produced will certainly find willing buyers.

Towards the end of the supply chain, the point where the blending of the product will take place will depend on the capacity of ASA’s installations, as dedicated infrastructure needs to be considered. This will not be a problem in the beginning, but it is bound to show some constraints as the industry develops and as the quantities of aviation biofuel that need to be blended become significant. The storage of the product has also shown some challenges, as the difference in densities between the biofuel and the fossil fuel have to be taken into account.

Longitudinal analysis

As part of the analysis of the supply chain, consideration was given to several themes that are present across the specific stages. These include the financial, legal, and sustainability perspectives.

From the financial perspective, several institutions were invited to give their ideas as to how the markets would react to the measures that are being implemented across the globe, such as the European Union’s Emissions Trading Scheme, or the Clean Development Mechanisms promoted by the UNFCCC. The impacts of such measures are to be an integral part of the financial viability of these types of fuels.

The legal perspective was explored to look into the different clauses of Mexican law that could have an impact in the development of this industry. The Mexican Constitution has a legacy of stringency with respect to energy created from fossil fuels, but there are new laws covering the growth of bioenergetics that show promise, which are still in the advancement stages.

The sustainability perspective was addressed from the viewpoint of the framework provided by the Roundtable on Sustainable Biofuels (RSB). The twelve principles were analysed in detail, and the parallels with the Mexican environmental law were put into perspective.

Next steps

The Flight Plan Towards Sustainable Aviation Biofuels in Mexico has proved to be an invaluable exercise to identify the existing and missing links along the value chain of this new type of energy.

New lines of research have emerged and the challenge is to find the necessary funding to pursue them. This, together with the implementation of the defined action items are the necessary next steps to follow so that a necessary aviation biofuel industry is established in Mexico.

As ASA works on putting together the pieces of the puzzle to define the successful path Mexico will be following in the next few years, the results that will benefit Mexican society, such as the reduction in greenhouse emissions, the promotion of agriculture in marginal land, new jobs, and a major boost for a new industry, are well underway.

Download the case study