Virgin Australia’s Push for Sustainable Fuels

Virgin Australia Taking The Sustainable Fuel Agenda To New Heights

Article taken from ISCA’s 2018 Impact Report.

Written by Robert Wood (General Manager Group Sustainability, Virgin Australia)

Sustainable aviation fuels derived from biomass (plants, trees, algae, waste and other organic matter/bio-oils) offer the single largest opportunity to reduce emissions for airlines in the medium term whilst ensuring long-term fuel security for the industry.

At a global level, the aviation industry is committed to reducing its greenhouse gas emissions and has set a target of carbon neutral growth from 2020. The use of sustainable aviation fuels will significantly contribute towards achieving this target.

The Virgin Australia Group (the Group) has been actively supporting the development of sustainable aviation fuels since 2008, including:

• participating in domestic and international policy discussions;
• working with State and Federal Governments, along with industry groups, on ways to stimulate the production of these fuels in Australia;
• undertaking studies on fuel production pathways and feedstocks; and
• holding direct negotiations with sustainable aviation fuel producers.

However, despite these efforts, and those of many others in the industry, sustainable aviation fuels are not currently produced in Australia. The Group consulted with a number of sustainable aviation fuel companies and identied that providing a strong demand signal combined with a long-term off-take arrangement was the best way to attract investment to sustainable aviation fuel projects in our region.

In March 2016, the Group, in partnership with Air New Zealand, released a Request for Information (RFI) to procure 200 million litres of sustainable aviation fuels for a period of 10 years, starting in 2020. The RFI generated strong local and international interest. Many submissions were received and assessed through a detailed due diligence process to short-list companies.

Following initial discussions with these organisations, further detailed technical analysis and financial due diligence was conducted. Given that the cost of traditional jet fuel today is not the only appropriate measure to benchmark these sustainable aviation fuels against, the Group looked at the overall value that sustainable aviation fuels would bring to our business between 2020-2030, and has created a new contracting approach for the supply of these fuels.

Through the RFI process, the Group began to develop a clear understanding of the total costs of these fuels, however the re-certification of the fuel before incorporation into the fueling infrastructure, as well as the logistics of the blending method, remained a barrier.

Following this identified gap in knowledge, the Group entered into a partnership with the Queensland Government and a sustainable aviation fuel supplier, Gevo Inc. to test the supply- chain readiness for sustainable aviation fuels in Australia. This project will see the supply of sustainable aviation fuel into the Port of Brisbane, which will be received over the course of the next 12-24 months. This will be the first time that any airport in Australia will have sustainable alternative fuel supplied through the regular fueling infrastructure.

This fuel is produced using the Alcohol (Isobutanol) to Jet fuel pathway and will be certified to ASTM D7566. The insights generated from this project will enable the Group to move forward in our procurement of sustainable aviation fuels, as well as increasing the attractiveness of investment in this industry in Australia. This project will also identify opportunities for improvements in the current processes and infrastructure to ensure Australia is ready for these fuels, making our region attractive to investors.

The purpose of this project is to help us better understand the logistics and cost of supplying sustainable aviation fuel into the current fuel infrastructure at Brisbane Airport. This includes blending and certifying the fuel to Jet A-1 and transporting it into the Joint User Hydrant Installation (JUHI), which is the infrastructure that holds the fuel at Brisbane Airport.

This infrastructure is jointly owned by four fuel companies (VIVA, AirBP, Caltex and Mobil) and Viva manages the JUHI that supplies domestic, international and military aircraft at Brisbane Airport.

Over the past several months, the Group has been working with multiple stakeholders to ensure that sufficient infrastructure, process design and skills exist to allow this industry to develop moving forward. The key to the success of the project will be in identifying the safest and most cost effective way to blend, certify and supply these fuels into the JUHI and ultimately into all aircraft uplifting fuel.