Aviation: Large Potential Market for Use of BiofuelsWed, 02/19/2014 - 09:02
Mexico has one of the 20 largest aviation fleets in the world, and an estimated 10 million liters of aviation fuel are used in the country every day. This numbers make Mexico a key potential market for the aviation biofuel industry. Additionally, Mexico has the conditions and resources to become a major aviation biofuel producer. According to Captain Gilberto López Meyer, Director General of Aeropuertos y Servicios Auxiliares (ASA), a lot of land in Mexico has suffered from negative ecological impacts. These lands have lost nutrients due to heavy agricultural use or to not receiving enough water, and are now regarded as low quality soil no longer suited for food production. “There are millions of hectares of this kind of land in Mexico that are waiting to be put to good use. So availability of land for biofuel crops is not an issue,” he says.
Six years ago, airline companies would not have considered biofuels as a viable option because aviation fuels have distinctive traits. For example, they have to be able to function at a wide range of temperatures and pressures. But research and development on biofuels has come a long way and these fuels earned certification for use on commercial flights in Mexico in 2011. The International Civil Aviation Organization established that, ideally, biofuels should represent at least 1% of Mexico’s total aviation fuel consumption by 2015. This percentage is the equivalent of 100,000 liters per day. By 2015, this goal will entail a production of almost 40 million liters per year.
The aviation industry’s strategy to address climate change contemplates four lines of action. First, investing in better technology. Current airplanes are 70% more efficient than aircrafts from the 1970s and technology is still improving. The second line consists of better aerial operations by ensuring that fleets and airports function in the most efficient ways possible. Third, market measurements are enforced and polluting actors are fined. Biofuels comprise the fourth line of action. ASA is currently participating in all these mechanisms, having shown a commitment to energy efficiency and sustainability for the past 15 years. Additionally, ASA saw biofuels as an opportunity for economic development. López Meyer believes countries that are already investing biofuels as part of their energy transition strategy will have greater chances of getting ahead when the market detonates.
The sector is expected to grow at a reasonably slow pace, as it depends on technological advancements and the fossil fuel market. ASA had two options to push the development of biofuels. The first consisted of waiting for another party to produce biofuels for aviation, a rather safe alternative. The second was taking advantage of ASA’s strategic position to influence the market and push the industry by itself. “As the only supplier of aviation fuel in Mexico, anyone interested in producing fuels or biofuels for the aviation sector will have to sell the product directly to us. This puts us in a great position to stimulate the development of this industry. You could say we are taking advantage of a monopoly for a good cause,” explains López Meyer.
Prices are the main challenge for the implementation of biofuels in the aviation industry. The first flights for which ASA used biofuels cost 15 times more than regular flights. However, that ratio was only six times in 2012, still vastly more expensive but a sign that costs are coming down. López Meyer indicates that some developers are producing biofuels that cost three times as much as traditional fuels. So far, ASA has carried out around 40 flights using biofuels but no one can really predict when the prices of biofuels will become competitive. “Lowering prices is the main challenge, and we are working on a diagnostic of the entire chain that includes farmers, government organisms, financing, and shipment,” López Meyer adds.
Nobody is producing the required quantities of biofuels in Mexico due to the absence of market demand. However, this scenario is changing in other countries. For example, the US implemented the use of biofuels in the army to create economies of scale and foster the sector’s growth. This resulted in an increase in the production of raw materials and investments. ASA has asked for government support in expanding the use of biofuels, which responded by creating an inter-sectorial commission in charge of developing the biofuel sector, linking SAGARPA, SENER, and SEMARNAT. ASA is working with this organism in promoting a coordinated debate to improve policies and regulations regarding biofuels.
By using advanced biofuels that are manufactured from biomass or agricultural residues, the aviation industry is operating in a safe zone. This means aviation biofuels do not compete with food production, which is a common critique of biofuel production. López Meyer says ASA measures the precise environmental impact of the biofuels and alternatives it could use, ensuring that when a full commitment is made, it will be both economically and environmentally sound.