Commercial Airplanes Aviation Biofuel: Recent breakthroughs and long term prospects Presented by Michael Lakeman, Ph.D. Environmental and Aviation Policy, Boeing Commercial Airplanes April 2014
One Boeing, One Planet By improving the environmental performance of our products and operations, we ensure the vitality of Boeing as well as our customers, our industry and our communities worldwide. Together, we will continue to build a better planet. Jim McNerney Chairman and CEO The Boeing Company 2
By 2032, airlines will need more than 35,000 new airplanes valued at $4.8 trillion Market value: $4.8T 2013-2032 2,500 2,000 1,500 1,000 500 0 $80B Regional jets 2% $2,290B Singleaisle 47% $1,100B Small wide-body 23% $1,090B Medium wide-body 22% $280B Large wide-body 6% New airplane deliveries by region 2013 2032 Region Airplanes Asia Pacific 12,820 Europe 7,460 North America 7,250 Middle East 2,610 Latin America 2,900 C.I.S. 1,170 Africa 1,060 World Total 35,280 7% 21% 3% 8% 3% 35,280 21% 37% Copyright 2013 Boeing. All rights reserved.
Global CO2 Emissions Emissions by sector, 2000-2030 Millions tons CO 2 equivalent/year 60,000 50,000 40,000 30,000 2% of total 3% of total Air Other transport Forestry Buildings Agricultural and waste 20,000 Industrial 10,000 Power 0 2000 2005 2010 2015 2020 2025 2030 Source: IPCC Small but growing share of emissions 4
Boeing s Role and Actions Boeing s Role Core activities Protect our environment Support and Advocacy Assure industry growth Act as industry catalyst to accelerate commercialization Feedstock and Pathway R&D Address customer s top cost Fuels approval Ultimate goal is to catalyze a vibrant commercial market 5
Boeing s Global Biofuel Program Key Activities Midwest Biofuels Roadmap SAFUG ILUC Position BIOJet Abu Dhabi Launched Gutter Oil Collaboration Biofuel flights RFS2 Includes Jet Fuel UAE R&D Center Northwest Roadmap and Partnerships Green Diesel Commercialization Brazil Biofuels Roadmap Launched RSB SE AsiaStudy GOL Biofuel Flights Amyris GOL MOU on Aviation Biofuels South Africa Biofuels Collaboration / MOU Indonesia Biofuels Mandate Australia Biofuel Efforts Working across Boeing and the industry to drive commercialization 6
Broad Demand for Aviation Biofuel Test Flights 2008-2011 Early commercial flights 2011-2012 Ongoing operation 2013+ Demand is not a constraint 7
State of Aviation Biofuel Industry Technically viable In demand Sufficient supply ASTM and Def Stan approved High quality standard Airline support In commercial use Strong US Military Demand Refinery capacity small Price premium Limited sustainable feedstock Supply is the main challenge 8
The continuing challenge $30 $0.10 The price premium of aviation biofuel used for demo flights The price premium that would eliminate 2012 airline profitability So what s driving the $30? Notes: Prices per gallon. $0.10 based on long term net margins of 1% and assumption of 1/3 of costs being fuel. 9
Scale? Scale? Price? Price? 10
Global Green Diesel Production Emerald Biofuels 85 M Gallons LA Eni 100 M Gallons Italy Diamond Green Diesel 137 M Gallons Norco, LA Dynamic Fuels 75 M Gallons Geismar, LA Neste Oil 594 M Gallons Singapore, Finland, Netherlands Advanced biofuels, commercialized 11
Green Diesel is a drop-in fuel Refining Green Diesel Diesel Markets Feedstock O O Biodiesel Green Diesel 12
HEFA is a premium fuel Jet-A (min 50%) HEFA Blend Aviation market Refining Green Diesel Green Diesel Diesel market Feedstock Distillation Green Diesel HEFA 13
The breakthrough Green diesel is similar enough chemically to be blended directly into jet fuel Dr Jim Kinder, Boeing Technical Fellow 14
Drop-in aviation biofuel, without the premium Jet-A (min 50%) HEFA Blend Aviation market Refining Green Diesel Green Diesel Diesel market Feedstock Distillation Jet-A Blend Aviation market 15
Significant impact expected $40 Competitive price $/gal 1,000 M Gal Instant scale 935 $30 $20 32 1% of global jet fuel 800 600 400 806 669 669 429 $10 $0 Airline Purchases of HEFA 5 Green diesel (no incentives) 3 Green diesel (net incentives) 200 0 51 2007 51 2008 102 2009 2010 2011 2012 2013 2014F Sometimes, the breakthrough is not in technology 16
The SBRC Sustainable Biomass Research Consortium
Why is SBRC research important? Our concept for biofuel production could be applied to the UAE and many other regions of the world 97% of the Earth s water is in the oceans About 20% of the Earth s land mass is desert ~25.5 million km2 Source: USGS
The ISEAS The flagship project of the SBRC is the Integrated Seawater Energy and Agriculture System
Moving From Dreams to Reality Aviation Biofuel Progress ASTM approval for commercial use Organized demand Favorable policy developments Commercial flights continue Next Steps ASTM approval of green diesel blending Emphasis on policy continuity Research expanded feedstocks/pathways Innovation supply chain and commercial Great progress. Superior fuel. Early in the journey. 20
Questions?