Biofuels still waiting for take-off

Elizabeth Howell
October 19, 2022

Canada's new aviation plan for sustainability has the industry's attention — but observers say the government could have gone even farther to put environmental concerns at the fore.

The plan, released on September 28, defines a pathway for the aviation industry to 2030, with the goal of bumping up the use of sustainable fuels — which is right in line with the aviation sector's move to net zero carbon emissions in the coming decades.

"Canada’s updated Aviation Climate Action Plan sets an ambitious net-zero by 2050 vision for the sector, an aspirational target [10 percent] for the use of sustainable aviation fuel by 2030, along with key actions the government and the aviation sector will take to achieve this vision," government officials wrote in a statement on Transport Canada's website.

Warren Mabee, who directs Queen’s University’s Institute for Energy and Environmental Policy, told Research Money the government’s plan is an improvement, but less ambitious than it appears, since it builds on existing innovation in biofuels, which are becoming more viable by the year.

"It's been almost a decade since we started doing large-scale tests of renewable or sustainable fuels in aviation," he said. A better path, he added, would be to focus on questions such as how to integrate aviation fuels into the infrastructure, especially at major airports like Pearson, which are already grappling with schedule delays amid pandemic supply turbulence.

"We don't have the infrastructure built to make this fuel, and that is the biggest hurdle to actually making this work," Mabee said. He cited a list of logistical challenges: figuring out how to make the fuel, how to support emergent facilities, and how to transport it to airports.

"Does it mean that we put it into rail cars and move it around the country?" asked Mabee, who pointed to the location of facilities as a basic question. Just as fundamental will be support for the sustainable fuel industry, to avoid failures such as BioAmber, a Montreal-based firm that had been seeking to develop commercial scale output of a renewable biochemical that would derive a variety of sustainable products, including aviation fuel.

BioAmber filed for bankruptcy in 2018, ceasing operations amid concerns about high production costs and low production capacity, according to a 2021 peer-reviewed journal paper from researchers with the Government of Canada and the University of Saskatchewan.

According to Mabee, BioAmber’s demise did not necessarily stem from its ambitions with regard to fuel, but the daunting prospects of the entire biochemical sector.

"One of the challenges that we've had on the bio side — and this is a constant sort of an issue for us — is that a lot of these fuel products don't really pay the bills," he said, noting that it remains difficult to get any biorefinery model up to working scale.

Meanwhile, though strong policy supports may be useful, hard choices need to be made to wean companies off those subsidies and keep shareholders happy. A national industry association, Advanced Biofuels Canada, told Research Money that subsidies likely will be required in the short term, to keep up with the powerful United States market, where recent inflation reduction efforts include subsidies to that country’s airlines.

According to Fred Ghatala, the organization's director for carbon and sustainability, Transport Canada’s new targets are a "glass half full" direction, which looks to decarbonisation through sustainable aviation fuels, while paying little attention to emission targets. He called for the Canadian government to give the biofuel sector a "firm demand signal", so that these products can be blended into the aviation fuel supply in an economically sustainable way.

"Do we need that in Canada for SAF [sustainable aviation fuel] to be used here?” Ghatala asked with respect to subsidies. “Arguably, yes.”

The 10 percent target for biofuels, he added, is a match to the American goal. Given how tightly the two countries' industries are integrated, the similarity is "not lost on anyone."

Ghatala acknowledged the barriers to implementing biofuels in today's high-inflation environment, especially when investors are spooked by talk of a new global recession. Yet this can also be the right time for strategic investments in new technologies, which could produce benefits down the road, or at the very least, address climate change in ways that will only be a benefit to the economy over the long term.

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