Persistently high oil prices and the imperative of reducing aviation’s carbon footprint have driven rivals Airbus, Boeing and Embraer to partner in the quest for cleaner-burning biofuels. The airframers signed a memorandum of understanding March 22 at the Aviation and Environment Summit in Geneva to jointly promote the commercialization of “drop-in” biofuels—alternative fuels that make use of the existing petroleum infrastructure.
“There are times to compete and there are times to cooperate,” said Jim Albaugh, Boeing Commercial Airplanes president and CEO. “Two of the biggest threats to our industry are the price of oil and the impact of commercial air travel on our environment.” Added Paulo Cesar Silva, Embraer president of commercial aviation: “We are all committed to take a leading role in the development of technology programs that will facilitate aviation biofuels development and actual application faster than if we were doing it independently.”
Airlines face cost pressure both to reduce fuel consumption and lower emissions. The International Air Transport Association said March 20 that it is downgrading its 2012 industry profitability outlook by $500 million from its December forecast, primarily due to rising oil prices. It now expects the price of oil to average $115 per barrel, up from the previously forecast $99, boosting fuel to 34 percent of average airline operating costs. The FAA, citing an IHS Global Insight projection, earlier this month forecast the price at $100 per barrel this year, an increase of 6 percent from 2011. The agency said it expects the price to rise to $115 by 2020 and to $138 by 2032.
Meanwhile, the airline industry and numerous governments are confronting Europe over its emissions trading scheme, which promises an escalating cost in carbon credits. The industry has said it will develop a solution by next year through the International Civil Aviation Organization.
The Geneva agreement commits Airbus, Boeing and Embraer “to speak in unity” to governments, biofuel producers and other stakeholders to promote the availability of alternative jet fuels. The airframers already participate in the Sustainable Aviation Fuel Users Group, which includes 23 airlines responsible for about 25 percent of annual aviation fuel use.
Last October Embraer, Boeing and the São Paulo State Research Foundation agreed to participate in a study, scheduled for completion later this year, on “creating a cost-effective, bio-derived and sustainable jet-fuel production and distribution industry in Brazil.” All three airframers have supported demonstration flights using biofuels since they won approval for commercial use last year.