Aviation industry needs up to $70 bil to meet biofuel targets: executive
Singapore (Platts)--12May2011/155 am EDT/555 GMT
The airline industry will not be able to meet targets being set for the
use of aviation biofuels without immediate multibillion dollar investments
into feedstock production and refining capacity, the head of a company aiming
to be an integrated producer and supplier of the new fuels told an industry
gathering in Singapore on Wednesday.
Without the investment of $60 billion-70 billion, said Mitchell R.
Hawkins, chairman and CEO of the US-based Biojet Corp., such targets as those
set by the Air Transport Action Group and the European Union will not be met.
ATAG has set the goal of 6% of all aviation fuel being made up of
biofuels by 2020, while the EU's commission has set the goal of low-carbon
aviation fuels making up 40% of all fuel for the sector by 2050.
"If we just look at the near term target, you need $60 billion-70
billion, not over time -- if you want to have that fuel in 2020 -- because of
the lead time needed for these investments, you have to write the check now,
you have to write the check today," Hawkins said. "Nobody is writing that
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Biojet, which earlier this year received $1.2 billion in funding from
Equity Partners Fund, needs another $6 billion to fund its own development
plans that call for first aviation biofuel deliveries by 2013.
Hawkins, speaking at the International Air Transport Association's
Aviation Fuel Forum in Singapore, said he based his calculation on the
overall investment needed on how much it would cost to meet ATAG's 2020
target using just one of the usual feedstocks of jatropha, camelina, algae or
Using jatropha as the main feedstock, for example, would require an
investment of $30 billion for 2,000 farms of 10,000 hectares each, Hawkins
said. If camelina was the main feedstock, it would require an investment of
$34 billion for 8,500 farms.
Additionally, $34 billion would be required to build 67 bio-refining
plants at a cost of $350 million-500 million each, he said.
Comparing these figures with funds of around $100 million each raised in
recent public share offerings by companies working on aviation biofuels, "the
numbers just don't wash."
In 2010, biofuel companies Amyris and Codexis raised about $80 million
each in IPOs, and earlier this year in March, an IPO by biofuel company Gevo
netted a total of about $120 million.
--Thomas Hogue, firstname.lastname@example.org