(Credit: Canva Pro)Oil prices have spiked to at least $84 per barrel — another reason to consider using alternative fuels. It’s especially true for airliners, among the industries hardest hit by rising fuel prices.
In fact, the International Air Transport Association said jet fuel prices rose to about $120 per barrel in the first week of August. Rising demand is the primary reason — about 70% greater this year than in the first six months of 2022. Jet fuel prices account for 20% to 25% of airlines’ operational costs.
“This increase is buoyed by both soaring crude oil prices and cracks between jet fuel and oil. Following Russia’s invasion of Ukraine on 24 February 2022, the Brent crude oil price increased by over 30% as of June due to a sudden loss of supply from Russia, which is the third largest oil producer in the world. Adding to that is the crack spread between the jet fuel price and the crude oil price.
“Lifted by the strong post-Covid recovery in demand for air transportation and amid continued shortages of supply, the cracks reached an all-time high of close to USD 67 per barrel in June. These two forces boosted the jet fuel price to its highest level in 14 years,” the association said in its announcement.
Fuel oil is also the primary reason the airline industry is responsible for 2% of all greenhouse gas emissions. According to the International Energy Agency, aviation accounts for 15% of global oil demand.
The aviation sector consumes 100 billion gallons of fossil fuels and emits 1 billion tons of CO2 annually. Electrifying planes is one option, but those flights are limited to a few hours. And sustainable aviation fuels are another choice.
According to reportlinker.com, the biofuels industry is poised to grow by $1.31 billion between 2022 and 2026. That would be a compound annual growth rate of 6.74%. Exxon Mobil, for example, is investing $600 million in algae. Algae is highly synergistic with the established oil and gas industries, and it can be refined on the same site as petroleum.
The US Energy Department says the biofuels industry has produced 17 billion gallons of fuel and prevented 544 million metric tons of CO2. The goal, initially, is to use that fuel to offset petroleum.
Renewable energy is at the heart of sustainable aviation fuels — including food waste, animal waste, and sewage sludge. The department says its carbon footprint can be 165% smaller than petroleum-based jet fuel.
Crude oil makes up jet fuel. About half of its contents must come from biofuels to be considered renewable. That can include algae, carbon waste, and ethanol made from corn or wood chips. For example, Gevo has a $100 million agreement with Scandinavian Airlines to begin supplying it with sustainable aviation fuel in 2024. It also has one with Delta Airlines.
Furthermore, a new plant broke ground in July in Washington State to transform CO2 into jet fuel — a technology that could clean up air travel. The plant will go live in mid-2024, producing initially 40,000 gallons annually. Shopify, Microsoft, and Alaska Airlines are their first customers.
The U.S. Air Force has tested the product, affirming that existing planes can add it without engine changes. The carbon can comprise as much as 50% of the jet fuel, resulting in 90% fewer lifecycle emissions.
The company Twelve said its E-Jet Fuel is carbon-neutral and fossil-free, derived from CO2. Biogenic sources such as ethanol plants, pulp and paper mills, and waste processing are the sources of CO2 feedstock.
“The life cycle emissions reduction of our fuel are substantial compared to conventional jet fuel,” said Andrew Stevenson, vice president of project development “It uses a lot of electricity. As long as we use renewable energy, there is no net emissions. It is why having low-cost renewable electricity is so important.”
He adds that the fuel will be more expensive than conventional jet fuel. However, that will change once the company builds economies of scale and the cost of renewables continues to fall.
