© OECD/IEA 2017

Aviation biofuel perspectives

Pharoah Le Feuvre

Singapore, 15th November 2018

IEA

© OECD/IEA 2017

Transport’s renewable share is far lower than that of electricity and heat. Most renewable energy is

consumed in road transport, with potential untapped in aviation and marine.

Renewable energy in transport by fuel (left) and renewable consumption by transport mode in 2023 (right)

Renewable energy in transport remains low

3.4% 3.8%

0%

1%

2%

3%

4%

5%

0

30

60

90

120

150

2017 2018-23 growth 2023

Mtoe

Biofuels Renewable electricity % RE (right-axis)

Road biofuels

Aviation biofuels

Maritime biofuels

Rail electricity

Road electricity

Other electricity

Total: 112 Mtoe

© OECD/IEA 20183

9.6

0.6 1.6

1.7

2.5

3.2

0

2

4

6

8

10

Shipping/other

Passengervehicles

Aviation Road freight Petrochemicals Growth2017-2030

mb/d

Around 2/3 of oil consumption growth is anticipated to come from transport,

with aviation accounting for around 20%.

Pressing need for decarbonisation solutions in the transport sector

Projected oil demand growth to 2030

© OECD/IEA 2017

The IEA’s 2DS outlines an essential role for biofuels and electrification to achieve low carbon transport.

Sustainable biofuels’ share grows three-fold by 2030 and by a factor of 10 by 2060.

Transport sector final energy demand by fuel in the IEA’s 2DS (2014-60)

Biofuels are key to transport decarbonisation efforts

0

20

40

60

80

100

120

2014 2030 2045 2060

EJ

Hydrogen

Electricity

Biofuels

Natural gas

Oil

x 3

x 10

© OECD/IEA 2017

Trucking, aviation and shipping account for two-thirds of biofuels consumption in the 2DS by 2060,

however only biofuels with very low lifecycle emissions are compatible with this low carbon scenario.

Final energy consumption by fuel in long-haul transport modes in the 2DS (2015-60)

Biofuels main contribution to the 2DS is envisaged in long-haul transport

0

5

10

15

20

25

30

35

2015 2030 2045 2060

EJ

Medium & heavy-freight trucks

Petroleum Products Sustainable biofuels Electricity

0

5

10

15

20

25

2015 2030 2045 2060

Aviation

0

5

10

15

20

25

2015 2030 2045 2060

Shipping

© OECD/IEA 2017

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025 2030

Mtoe

Conventional (including waste and residue HVO/biodiesel) Novel advanced

ForecastHistorical Low carbon scenario

Current market growth of sustainable biofuels falls short of the volumes required

to keep on track with the COP 21 global climate agreement.

Historical and forecast transport biofuel production compared to volumes within the IEA’s low carbon scenario

Accelerated deployment of sustainable biofuels is required

© OECD/IEA 2017

In the long term commercialisation of a wider array of aviation biofuel production pathways will be

required to access lower cost feedstocks with higher availability.

Production costs for fossil jet fuel and aviation biofuels with break-even crude oil price

Aviation biofuels are currently more expensive than fossil jet fuel

0

100

200

300

400

0.0

0.5

1.0

1.5

2.0

Fossil jet kerosene ($50-100/bbl oil) Commercial aviation biofuels Novel advanced aviation biofuels

Production cost (USD/L)

Break-even crude oil price (right axis)

USD/bbl

© OECD/IEA 2017

The potential additional cost per passenger from biofuel blending may be lower than other elements that

influence ticket price e.g. seat class and time of purchase (subject to individual airline commercial policy).

Cost premium of commercial aviation biofuels (15% blend) per passenger from London

Higher efficiency lowers the cost of aviation biofuel consumption

0

5

10

15

20

25

30

35

New York Sydney Tokyo Istanbul Berlin

Cost per passenger (USD)

Fleet average efficiency High-efficiency aircraft

Note: Estimated costs based on IEA analysis.

© OECD/IEA 2017

As most demand is policy driven, low oil prices have not stopped biofuels output increasing.

Policy support for aviation biofuels is gaining momentum.

Crude oil price and biofuels production 2007-17

Biofuel policy support has proved effective in growing production

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Indexed 2007 = 100

Crude oil price Global biofuel production

© OECD/IEA 2017

Over ¾ of novel advanced biofuel projects currently in development are in

the EU, USA and India where policy support is available.

Forecast novel advanced biofuels production, 2018-23 (left) and current project development by country (right)

New aviation biofuel technologies need to commercialise

1 2 3 4 5 6 7

0

1

2

3

2017 2019 2021 2023

Billion L

Planned Under constructionOperational small-scale Operational commercialAccelerated case

32%

27%

18%

5%

18%

Europe

United States

India

Canada

RoW

© OECD/IEA 2017

Conclusions

• Transport remains the hardest sector to decarbonise, with limited uptake of

renewables.

• Biofuels are key to reducing CO2 emissions from long haul transport.

• Biofuel production needs to accelerate to meet the needs of the IEA’s long

term low carbon scenarios. But measures are required to ensure sustainability.

• Demand from aviation for sustainable biofuels is clear, but solutions need to

be identified to close or share current cost premiums over fossil jet fuel.

• Commercialisation of a wider array of aviation biofuel production pathways is

needed to access feedstocks with higher availability and lower cost.

© OECD/IEA 2017

For further insights and analysis…

• Renewables 2018 Market Report

• World Energy Outlook (WEO) 2018

• Technology Roadmap - delivering sustainable bioenergy (free)

• How2Guide for Bioenergy (free)

• The Future of Trucks (free)

• Global EV Outlook (free)

For more information see: www.iea.org/publications/

• Tracking clean energy progress in the transport sector:

www.iea.org/tcep/transport/