by Maxx Chatsko (The Motley Fool) The airlines industry is heavily committed to reducing emissions, but success in renewable fuels has historically been elusive. — The global airlines industry has committed to reducing its carbon dioxide emissions 30% from 2007 by 2020. A variety of technologies are being leveraged to accomplish the goal, including fuel-efficient aircraft and renewable fuels. Of course, given a lack of commercially ready and economically viable renewable jet fuels, the industry is still searching for ways to reconcile its responsibilities to climate and shareholders.
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JetBlue uses roughly 825 million gallons of jet fuel every year. Volumes that high represent a major obstacle for upstart renewable fuel producers, which have yet to perfect their technology platforms. …
Consider that JetBlue recently announced an agreement to purchase 330 million gallons of renewable jet fuel over the next 10 years from SG Preston. On average, the volume would cover roughly 4% of the company’s annual consumption. It’s a start, but still a drop in the bucket.
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For instance, French energy giant Total SA (NYSE:TOT) owns majority rights to an engineered biology technology platform capable of producing large quantities of renewable jet fuel. It hasn’t scaled the technology yet because it wants production costs to fall to $1 per liter — or less, given current crude oil prices. But it is already making investments to that end.
In the last week Total SA announced an investment, along with Bill Gates, in Renmatix, which has pioneered a process for extracting sugars from waste biomass and paper mill byproducts. Those same sugars, which could be priced at a fraction of the cost of agricultural sugars, could significantly reduce production costs for the renewable jet fuel technology wielded by Total SA. At that inflection point, renewable fuels are no longer a game for underfunded start-ups to play. The industry could change for good.
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Airlines are making these investments while crude oil prices hover around multiyear lows, while next-generation technologies are maturing beyond the failure points of previous platforms. READ MORE