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A renewable energy source, derived from organic matter, wastes, or residuals, has the potential to play a role in reducing carbon emissions. Biofuels are one of the largest and widely accepted sources of renewable energy today.
In the transportation sector(rail/road/aviation/marine), they are mixed with existing fossil fuels such as diesel and gasoline.
Biofuel is commonly tagged as a cost-effective and environmentally superior alternative to petroleum and other existing fossil fuels.
The aviation industry is now looking at the second, or next-generation biofuels that are sustainable. Aviation biofuel is an environment-friendly alternative for traditional jet fuel used in the aviation industry.
The feedstocks being investigated for aviation fuel use have the potential to deliver large quantities of greener and cheaper fuel. It is unlikely that the aviation industry will rely on just one type of feedstock. Some feedstocks are better suited to some climates and locations than others and so the most appropriate crop will be grown in the most suitable location. Aircraft will likely be powered by blends of biofuel from different types of feedstocks along with jet fuel.
In the last few years, the aviation sector has outlined sector-specified GHG emissions-reduction targets, including the carbon-neutral growth by 20222 and a 50% reduction in carbon emissions relative to 2005 by 2050 (IATA, 2015).
The bio-jet fuels will play an important role in achieving these targets, there are very limited resources available to project the bio-jet fuel volumes that will be required under these scenarios.
Aviation is responsible for 12% of CO2 emissions from all transport. Due to this, there is a need for biofuel in the aviation sector, with on going trend the carbon emission is expected to touch 1600 metric tonnes by the year 2030.
The aviation sector uses a special type of fuel to power aircraft, these jet powering fuels are usually classified as Jet A1 fuels. The jet fuel has to meet strict specifications, with global standards set up by ASTM including for renewable and sustainable fuels.
The conventional bio-jet includes aviation biofuels made by hydroprocessing of oils and fats to make HEFA(Hydro processed Esters and Fatty Acids).
The other two advanced bio-jet pathways now certified are SIP and ATJ.
SIP bio-jet is manufactured through fermentation of sugars by microorganisms to create a hydrocarbon molecule known as farnesene. This is further treated with hydrogen to produce another molecule known as farnesane, which can be blended with petroleum-derived jet to produce a bio-jet fuel blend.
The ATJ route involves fermentation of sugars to alcohols, such as ethanol or butanol. These are further upgraded to bio-jet fuel, as demonstrated by companies such as Swedish Biofuels.
As per the U.S. Energy Information Administration, the global aviation sector consumed 310 Bn Litres of jet fuel in the year 2012, this accounted for 12% of total global consumption of transport fuels.
The Global aviation industry is expected to grow by about 3% per annum, still, growth in the use of jet fuel will likely be lower because of improving technologies and ever-increasing fuel efficiency.
The U.S. Federal Aviation Administration (FAA) forecasted 1Bn gallons of Bio jet fuel production in 2016. Each tonne of jet fuel is 1250 L with appropriate conversion factors. 3.8 Bn L of bio-jet fuel is forecasted to be produced by 2018.
The U.S Air Force is expected to replace 50% of conventional Jet fuels with renewable alternatives such as bio-jet fuels. On similar lines, The European Union (EU) has set up a target of 2 Metric tonnes of bio-jet fuel to be produced and consumed in the Eurozone by the year 2021.
Though the vast majority of commercial volumes of bio-jet fuels are produced through the HEFA pathway, the main product in all but one of these facilities is HEFA diesel.
Boeing recently applied for verification of a blend that includes HDRD and renewable diesel with jet fuel. Boeing has made testings for blends of up to 15% of this fuel in a demonstration flight. If approved, this pathway could have a significant impact on bio-jet production capacity because renewable diesel with good cold-flow properties could also be used as a bio-jet component.
The demand for aviation biofuel is directly related to global aviation fuel consumption and the growth will follow the almost same trend.
Boeing set a target of 1% biofuel in total consumption for the year 2016, while
Australia is aiming for 50% substitution by 2050,
The European Union estimates production of 3.5Bn L by 2020 and 40% by 2050,
Germany aims for 10% substitution by 2025,
Indonesia aims for 2% by 2018,
Israel 20% by 2025.
European Union Current Installed Capacity (CIC) and projected for the year 2025. (In Metric Tonnes)
The estimated targets are less unlikely to be met because the expansion of production capacity has been much slower than it was expected to be.
The Projections by Boeing highlight that the biggest increases in aviation-fuel demand will be in Asia, Africa, Latin America, and the Middle East.
This demand will be driven by an increased passenger and cargo aviation traffic, the developing economies of India and China are leading the way in aviation biofuel. The bio-jet fuel production in these regions will be dependent on regulatory policies where applicable, feedstock availability and harvesting is also an important factor to be considered.
The APAC member countries like Indonesia can develop bio-jet fuel production capacity based on the domestic production of palm oil, instead of exporting the oil to facilities in other countries. However, issues such as sustainability and indirect land-use change must be addressed.
If Bio-jet fuels are to be used in mass quantities by the aviation industry in the next 50 years, they must conform to strict regulations certified under ASTM standard D7566, and their performance will have to be equal to or better than conventional jet fuel.
It is expected that biofuel will offer an improvement to conventional fuel, in part such as lower sulfur content. The cost of bio-jet is not yet precisely determined, as this is not a readily available commodity, and contracts for the purchase of volumes of bio-jet do not usually disclose the price.
Although the HEFA technology is commercially mature, costs will remain a significant challenge due to the high price of the feedstock, as well as availability and sustainability concerns. The selling price of the vegetable oil feedstocks has historically been higher than the selling price of diesel and jet fuels
The North American market, particularly the USA, will be one of the prime markets for Aviation Biofuel Market due to the nature of industrial automation in the region, high consumer spending compared to other regions, and the growth of various industries, mainly AI, along with constant technological advancements. The GDP of the USA is one of the largest in the world, and it is home to various industries such as Pharmaceuticals, Aerospace, and Technology.
The average consumer spending in the region was $72K in 2023, and this is set to increase over the forecast period. Industries are focused on industrial automation and increasing efficiency in the region. This will be facilitated by the growth in IoT and AI across the board. Due to tensions in geopolitics, much manufacturing is set to shift towards the USA and Mexico, away from China. This shift will include industries such as semiconductors and automotive.
The European market, particularly Western Europe, is another prime market for Aviation Biofuel Market due to the strong economic conditions in the region, bolstered by robust systems that support sustained growth. This includes research and development of new technologies, constant innovation, and developments across various industries that promote regional growth.
Investments are being made to develop and improve existing infrastructure, enabling various industries to thrive. In Western Europe, the margins for Aviation Biofuel Market are higher than in other parts of the world due to regional supply and demand dynamics. Average consumer spending in the region was lower than in the USA in 2023, but it is expected to increase over the forecast period.
Eastern Europe is anticipated to experience a higher growth rate compared to Western Europe, as significant shifts in manufacturing and development are taking place in countries like Poland and Hungary. However, the Russia-Ukraine war is currently disrupting growth in this region, with the lack of an immediate resolution negatively impacting growth and creating instability in neighboring areas. Despite these challenges, technological hubs are emerging in Eastern Europe, driven by lower labor costs and a strong supply of technological capabilities compared to Western Europe.
There is a significant boom in manufacturing within Europe, especially in the semiconductor industry, which is expected to influence other industries. Major improvements in the development of sectors such as renewable energy, industrial automation, automotive manufacturing, battery manufacturing and recycling, and AI are poised to promote the growth of Aviation Biofuel Market in the region.
Asia will continue to be the global manufacturing hub for Aviation Biofuel Market over the forecast period with China dominating the manufacturing. However, there will be a shift in manufacturing towards other Asian countries such as India and Vietnam. The technological developments will come from China, Japan, South Korea, and India for the region.
There is a trend to improve the efficiency as well as the quality of goods and services to keep up with the standards that are present internationally as well as win the fight in terms of pricing in this region. The demand in this region will also be driven by infrastructural developments that will take place over the forecast period to improve the output for various industries in different countries.
There will be higher growth in the Middle East as investments fall into place to improve their standing in various industries away from petroleum. Plans such as Saudi Arabia Vision 2030, Qatar Vision 2030, and Abu Dhabi 2030 will cause developments across multiple industries in the region.
There is a focus on improving the manufacturing sector as well as the knowledge-based services to cater to the needs of the region and the rest of the world. Due to the shifting nature of fossil fuels, the region will be ready with multiple other revenue sources by the time comes, though fossil fuels are not going away any time soon.
Africa is expected to see the largest growth in Aviation Biofuel Marketover the forecast period, as the region prepares to advance across multiple fronts. This growth aligns with the surge of investments targeting key sectors such as agriculture, mining, financial services, manufacturing, logistics, automotive, and healthcare. These investments are poised to stimulate overall regional growth, creating ripple effects across other industries as consumer spending increases, access to products improves, and product offerings expand. This development is supported by both established companies and startups in the region, with assistance from various charitable organizations. Additionally, the presence of a young workforce will address various existing regional challenges. There has been an improvement in political stability, which has attracted and will continue to attract more foreign investments. Initiatives like the African Continental Free Trade Area (AfCFTA) are set to facilitate the easier movement of goods and services within the region, further enhancing the economic landscape.
Latin America and the Oceania region will showcase growth over the forecast period in Aviation Biofuel Market). In Latin America, the focus in the forecast period will be to improve their manufacturing capabilities which is supported by foreign investments in the region. This will be across industries mainly automotive and medical devices. There will also be an increase in mining activities over the forecast period in this region. The area is ripe for industrial automation to enable improvements in manufacturing across different industries and efficiency improvements. This will lead to growth of other industries in the region.
