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Shell invests in LanzaJet in bid to produce more green jet fuel

Shell invests in LanzaJet in bid to produce more green jet fuel

London — Shell has invested in bio-jet producer LanzaJet as the energy major looks to increase its presence in the production of renewable fuels.

LanzaJet, which is a spin-off of US-based biotech company LanzaTech, said on April 6 said that Shell’s involvement will “further accelerate commercialization” of its “Alcohol-to-Jet” technology as the aviation sector takes steps to reduce its carbon footprint.

LanzaJet is currently building a US-based alcohol-to-jet facility known as the Freedom Pines Fuels biorefinery in Soperton, Georgia, which will have a capacity of 10 million gal/year. This plant will convert sustainable ethanol into sustainable aviation fuel, and is expected to start up in 2022.

Sustainable aviation fuel, or SAF, is a renewable alternative to traditional jet fuel that the global aviation industry has explored over the past decade, with five production technologies approved to convert sustainable feedstocks into fuel. It is mostly manufactured from bio-waste, namely agricultural waste fats and/or oils, or residue raw materials.

NEW STRATEGY

Shell is gradually trimming its future upstream and refining operations and directing more spending to grow its low-carbon businesses. This project is expected to help it achieve its 2050 net-zero ambitions.

“Our access to feedstocks, experience of optimizing supply chains and extensive sales and marketing business will hopefully contribute to LanzaJet creating sustainable, robust and scalable commercial operations, supporting our customers’ decarbonization ambitions for many years to come.” according to Anna Mascolo, president, Shell Aviation.

In February, Shell unveiled a new strategy in the wake of last year’s price collapse, the coronavirus crisis and rising pressures to transition away from fossil fuels.

It expects its oil production to decrease by 1%-2% annually as it holds upstream investment close to 2020 levels and prioritizes transition areas such as LNG, renewables, and electricity provision.

Shell will have the opportunity to make further investments in the construction of larger-scale production facilities over the coming years, LanzaJet said.

FUEL OF THE FUTURE

LanzaJet will be able to produce up to 90% of its fuels as SAF, with the remaining 10% as renewable diesel.

LanzaJet’s SAF delivers more than a 70% reduction in greenhouse gas emissions on a lifecycle basis, compared to conventional fossil jet fuel, the company said. Any source of sustainable ethanol for jet fuel production, including, but not limited to, ethanol made from recycled pollution is used in its process, it said.

Other LanzaJet investors include LanzaTech, Suncor Energy, Mitsui & Co., British Airways and All Nippon Airways.

SAF is currently around four times more expensive than conventional jet fuel. But five years ago it was 15 times more expensive, according to S&P Global Platts data.

Platts assessed Northwest European SAF at $2,037.63/mt on an ex-refinery basis on April 6. This compares with a price of $514.25/mt for a 30,000 mt jet fuel cargo on a FOB basis out of Northwest Europe on April 6.

But SAF is expected to become more cost competitive due to its rising supply as more airlines adopt the cleaner fuel which is also being supported by better technology.

Aircraft can currently only operate using a maximum 50% blend of SAF and conventional jet fuel known as Jet A1. But the amount of SAF that can be blended into Jet A1 depends on the purity of the initial petroleum-based product.

Stringent jet fuel specifications, for example a flashpoint of 38 degrees C and maximum freeze point of -47 degrees C, have been a hurdle to achieving greener jet fuel.

The SAF market remains minuscule in comparison to the amount of jet fuel traded globally. It currently accounts for only 0.01% of global jet fuel use, according to S&P Global Platts estimates. However, the aviation industry wants to increase this sharply in the coming years as takes steps to decarbonize.

The Emission and Climate Impact of Alternative Fuels (ECLIF3) study started last month, which is looking into the emissions impact and performance of using 100% sustainable aviation fuel on passenger aircraft.

SOURCE

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