National Development Plan for Alternative Aviation Fuels

Renewable aviation fuels are not yet competitive with fossil kerosene. The price of sustainable fuels based on current vegetable oil prices is about 50% higher than the price of fossil kerosene.

In order to achieve competitive prices as quickly as possible, a " National Development Plan for Alternative Aviation Fuels" supported by the German Government is required. This should be implemented as part of the Mobility and Fuel Strategy (MKS) and should include the following key points:

Ensuring the supply of raw materials

Feedstock supply is becoming increasingly important. Politicians have also recognised this: In terms of raw materials for fossil fuels, they have supported projects aiming at securing their supply via the Deutsche Rohstoffagentur (DERA).

The cultivation of biomass is not yet included. The scope of the DERA should urgently be be expanded to include support programmes and investment guarantees for biomass projects in the future, similar to those provided for mineral resource supply projects. This includes a piloting group that identifies, organizes and finances pilot projects. Accompanying governmental agreements should specify cultivation and export criteria. As a result, scalable bioenergy projects would be developed and investment risks would be minimised.

Possible structure and competencies of the DERA bioenergy project team:

Investigate the potential of biorefineries

Currently, there is not a single refinery in Germany that can produce alternative aviation fuel. The establishment of such production facilities is urgently needed in order to guarantee a reliable supply of fuel and to be able to harness the potential of this emerging global market for the benefit of the German export industry.

However, the essential investments are very high. For this reason, a comprehensive benefit analysis is required. Further decisions are to be based on this assessment of the existing refinery locations regarding their suitability for conversion or expansion into a bio-refinery. Location analysis also offers the chance to evaluate its use for the German national economy and to identify the potential for new jobs, the export of technology and independence from product imports. Finally, such a study shall develop suitable operator models and marketing options for by-products.

Such a study should be commissioned immediately as part of the National Development Plan for Alternative Aviation Fuel. The results must then be entered into the MKS.

Securing financing for the refineries

The results of the study alone would already provide an important criterion for investors. More extensive support of the project must be provided by by public funds. Transferable examples are already available, like the eco-innovation programme of the Federal Ministry of the Environment – which already has successfully supported pilot projects in the area of environmental technology for years.

There also needs to be a bio-refinery support programme from the governmental Reconstruction Loan Corporation (Kreditanstalt für Wiederaufbau, KfW), focussing on this task, providing, for example, 30% investment grants and loans at reduced interest rates for the remaining 70%. Such measures would allow construction of a large-scale industrial bio-refinery to begin as early as 2015.

A HEFA-based plant would require investments of approx. €600 million to €1 billion. Such an installation can produce an annual output of approx. 800,000 tonnes of biojet, biodiesel and bio-naphtha. However, in order to achieve a ten per cent input by 2025, at least two such plants would be required. The investment grant provided by the KfW therefore has to be set at a total figure of between €360 and 600 million.