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Branson nudges airline industry toward biofuels

The European Union is bringing airlines into the greenhouse gas emissions trading scheme, meaning their operating expenses will rise.

Frank Gunn/Canadian Press

The airline industry will tell you that it generates at most 3 per cent of global carbon dioxide emissions, making it only a small part of the global warming problem. True, but guess what? In spite of the economic downturn, air travel for business, holidays and weekend breaks is shooting up through the clouds. By many estimates, industry emissions will climb 75 per cent between 2008 and 2020.

Problem status, in other words, is coming. What to do about it? Richard Branson, billionaire British entrepreneur and founder of Virgin Atlantic Airways has an idea, one that he launched this week at the climate talks in Durban, South Africa.

Mr. Branson, though his Carbon War Room, a non-profit organization that promotes technology and markets to fight climate change, launched, a market information site for the tiny, but apparently promising, business of making renewable aviation fuels. The War Room's partner in the venture is scientific publisher Elseveir.

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The idea is to provide the airline companies with information on the renewable jet fuel supply chain so they can compare suppliers on technical performance, economic viability, sustainability and carbon footprint. The goal is to create a viable market for the fuels. "Airlines told us that there wasn't enough information to make investment decisions in renewable jet fuels," Suzanne Hunt, the War Room's aviation expert, said in a statement. "At the same time, renewable fuel entrepreneurs, complained they couldn't get strong purchase commitments from airlines."

The other goal might be to prevent governments from forcing airlines to purchase carbon-dioxide permit permits, or at least very expensive ones. The European Union is bringing airlines into the greenhouse gas emissions trading scheme, meaning their operating expenses will rise. Earlier this year, Standard & Poor's estimated that it 2012-2013 alone, the permits will cost the industry €1.125-billion, based on a €15 per tonne price of carbon dioxide.

Mr. Branson thinks renewable aviation fuels have a bright future. The first test flight of aircraft using a non-oil-based fuel was in 2008. In the next five years, according to the War Room, some renewable jet fuel companies could produce enough renewable fuel to replace as much as 20 per cent of the fuel on a mid-sized airlines. The figure sounds ambitious, though suddenly soaring oil prices would certainly give a boost to the industry. So might the carbon-dioxide permits scheme. S&P said "We believe [it]may prompt the switch toward bio fuels."

Renewable jet fuels can be made from any number of sources -- natural oil, biomass, alcohol, sugars. The goal, of course, is to avoid production that competes with food for humans. In the United States, the massive effort to turn corn into ethanol that is blended with gasoline has been blamed for rising food costs.

The RenewableJetFuels site is already loaded with information. The fuel maker currently ranked highest under the judgment parameters is New Zealand's LanzaTech. Only last week, it nailed a $3-million (U.S.) contract from the U.S. Federal Aviation Administration to work on commercially viable aviations fuels from waste gases "that are completely outside the food value chain."

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More

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