Many of the technical hurdles facing aviation in its move towards sustainable aviation biofuels have now been overcome and much of this work has been achieved within the industry. Now, commercialisation and scaling up of the supply of aviation biofuels is the most important task. As shown in the selection of case studies in this publication, the industry has been forging ahead with pilot projects in a number of countries worldwide. But airlines and the rest of the industry cannot do it alone – political support and financial investment will have to come from a number of stakeholders

This section outlines six suggested steps that policymakers can consider in helping their air transport system grow with less carbon-intensive fuel, whilst in many cases also investing in green growth jobs and a new sustainable industry. These steps are presented in no particular order:

Step 1 Foster research into new feedstock sources and refining processes

There are many different types of feedstock and pathways that enable feedstock to be converted into biofuel, and important technological developments will unlock still more pathways. Early generation biofuels used feedstocks derived from food crops such as rapeseed and corn. However, these feedstocks can be used as food for humans and animals, raising important questions about their sustainability. In response to these concerns, the industry is now focused on exploring the use of advanced-generation biofuel sources that are truly sustainable.

Several pathways are being considered for the development of sustainable aviation biofuel.

The industry is unlikely to rely on a single feedstock. Some feedstocks are better suited to some climates and locations than others. Therefore, it is expected that ultimately there will be a portfolio of biofuel sources developed and a variety of regional supply chains.

Much of the current research and development work on alternative fuels is focused on biodiesel and bioethanol projects for land transport. Ultimately, this will delay land transport’s switch to more sustainable energy sources, such as electricity and hydrogen fuel cells.

Policy enablers include establishing funding programmes for academic research through existing or new university, research institution or industrial research projects, broadening or re-focusing university research of biofuels to include aviation-specific projects.

Step 2 De-risk public and private investments in aviation biofuels

To be economically viable, sustainable aviation biofuel must be priced at a level the market will find acceptable. At present, aviation biofuel is not cost competitive with current jet fuel. However, traditional jet fuel is forecast to become more expensive. By contrast, sustainable aviation biofuel will become less expensive as the industry develops. Policies incentivising biofuel development and use can hasten this trajectory and achieve greater emissions reductions in a shorter timeframe.

A better appreciation of the scope for reduction in the price of sustainable aviation biofuel is gained by examining the cost drivers. For the technology pathway that is nearest commercial viability, it is estimated that 85% of biofuel production costs relate to the cost of feedstocks. As technology to harvest and process these feedstocks progresses, as agronomy and plant breeding produce cultivars with better, more robust yields, and as sustainable biomass become available in commercial quantities the price will drop. In fact, since aviation biofuel testing started a few years ago, prices for these feedstock inputs have already dropped significantly. Support for research and development will enable continued improvements for feedstock pathways.

Production is the second major component of the total cost of the fuel. The oil industry has already established refining infrastructure and thus currently has a limited need for additional capital investment. However, in the case of sustainable aviation biofuel, the production infrastructure has yet to be developed and some of what needs developing could be synergistic with existing petroleum infrastructure, but not all.

There are also significant subsidies in place for biodiesel production in Europe and the US, which could hamper the establishment of aviation biofuel production.

These incremental upfront capital investment costs are a potential barrier to commercialisation. In this context, governments can play a role in reducing this risk through measures such as loan guarantees, tax incentives, grants and co-financing for pilot and demonstration projects. They can also provide a level playing field with biodiesel by providing similar fiscal and price incentives in order to catalyse establishment of the sector.

Step 3 Provide incentives for airlines to use biofuels from an early stage

If a policy or incentive mechanism is a key part of making renewable energy project economics attractive, changes to these factors pose a risk: a long-term, stable policy regime with a sound legal basis is essential for serious investment to occur.

Unlike some other renewable sectors, sustainable aviation biofuels are not subject to feed-in-tariffs or mandates. The EU ETS is a policy mechanism that may incentivise sustainable aviation biofuel development, but the price of oil is a far greater driver so its impact will probably be limited in the near-term. The market for sustainable aviation biofuels is primarily driven by other factors including reducing dependence on fossil fuels and improving the carbon footprint of the industry. Consequently, sustainable aviation biofuels are subject to very limited policy risk.

Policymakers can foster development of aviation biofuel by recognising the unique role it can have in reducing the aviation’s environmental impacts. Aircraft cannot use alternative renewable energy sources available to other sectors such as plug-in, wind, solar or hydroelectric power. Thus, crafting policies that create a level playing field for biofuels vis-à-vis other energy sources, and aviation vis-à-vis other sectors, is a key element in aviation biofuels commercialisation.

Step 4 Encourage stakeholders to commit to robust international sustainability criteria

Sustainability standards are being established that will provide suppliers, investors and customers with clear guidelines as to what is considered to be a sustainable biofuel. For example, in the EU, the Renewable Energy Directive (RED) contains specific criteria addressing this. The Switzerland-based Roundtable on Sustainable Biofuels (RSB) has a sustainability standard developed through a multistakeholder process that ensures the sustainability of production, processing and implementation. Sustainability is not just a matter of the choice of feedstocks – it is also a matter of how they are cultivated, harvested, processed and transported.

Some key sustainability criteria for aviation fuels could include the following elements:

• will not displace, or compete with, food crops or cause deforestation

• minimise impact on biodiversity

• produce substantially lower life-cycle greenhouse gas emissions than conventional fossil fuels

• will be certified sustainable with respect to land, water and energy use

• deliver positive socioeconomic impact

As a global transportation sector, aviation needs a harmonised standard to ensure that sustainability criteria are enforceable and equally applied across the industry. A patchwork of standards would inhibit the development of a commercially viable market. While there are myriad standards in place, both regulatory and voluntary, a critical element will be for aviation biofuel stakeholders to enable greater cooperation between standards to increase transparency, decrease the cost of compliance, increase end-user visibility to the biomass, and increase the incentives for next generation fuel pathways. It is also vital that a unified accounting structure be established to verify the origin and sustainability credentials of biofuels for aviation.

The development of an accepted set of globally harmonised standards will help ensure that investment is directed at biofuels that meet acceptable sustainability criteria, thus minimising this form of risk. Criteria need to be mutually recognised around the world. For aviation, global standards are needed wherever possible, due to operational routing of aircraft, common global equipment and worldwide fuel purchasing requirements.

Step 5 Understand local green growth opportunities

Sustainable aviation biofuel doesn’t only bring environmental benefits for aviation, it can also foster the development of a new industry. Given the diversity of feedstocks that aviation is considering, there are few places on earth that could not support some development of a new, sustainable, energy industry. These can range from growing large quantities of jatropha, halophytes or camelina in the most appropriate environments, to establishment of algae farms on land or off-shore, to smaller scale biofuel facilities in cities utilising municipal waste.

By bringing the aviation industry, government, biofuel, agriculture and academic expertise together, analyse the optimum opportunities that exist in your country for aviation biofuel production including the most effective feedstock sources and infrastructure requirements. A number of regional development banks are also working on ways to encourage the process along. The contacts at the back of this publication may provide advice for how to get this process started.

Step 6 Establish coalitions encompassing all parts of the supply chain

Experience has shown that there are many benefits to be gained from collaboration across the various stakeholder groups involved in all aspects of aviation biofuel production and use. These groups can bring together parties who have not traditionally needed to work together, such as:

• Airlines, airports, aircraft and engine manufacturers

• Academic institutions

• Fuel refining companies

• Agricultural companies and farmers groups

• Local, regional and national Departments of Agriculture, Defence, Transport, Economic Development and Enterprise

• Regulators – aviation, transport and agriculturalChambers of commerce and industry

• Environmental and sustainable development NGOs

Throughout this publication are examples of a number of stakeholder-oriented processes, all of which are groups of regional and national stakeholders, who have convened to work through the sustainability, supply, investment and long-term planning issues and maximise the opportunities within their respective regions. Within coming years, many significant commercial, policy and sustainability outcomes will result from such comprehensive regional stakeholder processes. These processes serve to enable commercial parties, while also giving confidence to governments and civil society organisations that sustainable aviation fuels efforts are following a contemplated path. Those seeking to better understand potentials for this industry should engage with the processes outlined in this document to understand next steps in each region.

The aviation industry has established a plan for reducing emissions. Sustainable aviation biofuels are an important part of that plan and, as you will have seen in this publication, the industry and its partners have made significant progress. There is confidence that biofuels can be a very significant part of every airline’s future. From policymakers, the industry is looking for encouragement and the right set of legal, fiscal and policy responses to ensure this exciting new energy stream can bear fruit as quickly as possible.