Crude Jatropha oil can be refined into two products: biodiesel and biokerosene.

Figure 17.2 IATA’s goals for bio jet fuel share and key messages. Source: GEXSI Presentation at World Biofuel Markets 2010.

17.4.1 Biodiesel

Biodiesel is produced by transesterification. Along with ethanol, biodiesel is already widely produced from various feedstocks around the world. However, biodiesel is unsuitable for use as jet fuel, primarily because its freezing point is too high. The large majority of Jatropha planting projects today are targeting biodiesel, which is the larger overall market. Biodiesel is ideal for "heavy engines,” like heavy rail, heavy truck, and heavy marine engines. Several shipping companies like Maersk, the container shipping company, are testing biodiesels at present.

17.4.2

I have cases of customers who have invested substantial amounts in biofuels with disappointing results so far. Most of the time it is very much a case of "kicking the tires”: go to the plantations, check the yield per acre or hectare, check the plants, count the plants, check the plantation farmers and government laws, and so on. Mother Earth Investments accepts mandates to optimize investments if improve­ments and professional advice are needed.

Jatropha Projects, Research, and Joint Ventures

This chapter gives an insight how much several industrial companies are investing in Jatropha. Often these companies are privately held or Jatropha is just a part of their business activities.

21.1

19.1

Air New Zealand

The first airline that flew with Jatropha biokerosene was Air New Zealand on 30 December 2008 (http://www. airnewzealand. co. nz/biofuel-test). Air New Zealand communicated that more than 1.4 tonnes of jet fuel could be saved on a 12-hour flight powered by the biofuel obtained from the seeds of the African Jatropha plant, keeping about 4.5 tonnes of carbon dioxide emissions out of the atmosphere.

The airline said that scientists made the estimate after Air New Zealand con­ducted the world’s first commercial aviation test flight using a 50/50 blend of Jatropha fuel and standard jet fuel in a Boeing 747-400 powered by Rolls-Royce engines in December 2008. Speaking on YouTube, Captain David Morgan, Air New Zealand’s chief pilot, said that the highest blend of any type of biofuel was used in that test flight, a joint initiative with Boeing and Rolls-Royce.

Since this test flight the blend has been submitted to rigorous industry eva­luation with a view to being certified for everyday use. When shorter-range flights were included, overall savings were estimated to reduce greenhouse gas emissions by 60-65% compared to jet fuel derived entirely from petroleum.

Morgan said that Air New Zealand aimed to become the world’s most envir­onmentally sustainable airline and it was proud to have played an important role in furthering the aviation industry’s body of knowledge on sustainable alternative biofuels. "We currently have a team looking at several different biofuel options,” he said. "We remain committed to our ambition of having 10% of our fuel needs by 2013 met by alternative fuels, but appreciate there are many more steps to be taken by experts in other areas to deliver biofuel as a commercial aviation fuel source”.

The airline said the Jatropha oil used for the test flight came from seeds grown on environmentally sustainable farms in Malawi, Mozambique, Tanzania, and India.

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

198 | 19 Airline Jest Results with Biofuels

19.2

We are also heading towards a "zero-waste economy” where nothing is thrown away and everything is recycled. Thus, bulk commodities like animal fats,

vegetable fats, and palm oil are gaining value, and are traded in large quantities. As an example, vegetable fats are now trading around €0.8/kg and milk costs €0.4/kg! Today big companies like McDonald’s make a fortune by selling the used oil from French fries, the US meat giant Tyson is doing the same thing in animal fats, and Weyerhaeuser makes cellulosic ethanol from woodchips together with Chevron.

Today, we capture just a fraction of the total output of greenhouse gas emis­sions, and we recycle only a tiny part of industrial, municipal, agricultural, animal, and forest residues. We are witnessing breakthroughs in biology and new opportunities present themselves to turn waste streams into value streams. Con­version, carbon capture, and repurposing of all industrial wastes are industrial goals for the coming generation.

However, like anything else in life, a change towards a zero-waste economy must start in the mind first!

22.8

Our World in 2030

Finally, a few predictions. I often discuss with friends how our world will look like

in the future and here are my thoughts of our world in 2030:

• We will live in a low-carbon society.

• Our world will have 8 billion people, 60% living in megacities.

• We will all pay if we pollute: we will all be subject to direct carbon footprint taxes.

• Centers of big cities will be closed for cars.

• Liquid transport fuels will be biofuels and not fossil fuel based.

• We will live in self-sufficient (“autarchic”) houses and villages — we will sell electricity to the grid.

• Airplanes will emit 50% less carbon dioxide than today; they will fly partly on biokerosene.

• We will buy fewer cars, but share more cars through partial ownership.

• We will have an electric bike in the garage. The electricity will come from solar panels, thermo-solar electricity, geothermic electricity, or biomass.

• Agriculture will become a high-tech industry. New grain, tree, and vegetable varieties with a high protein content will be developed.

• Biotechnology and agriculture will merge more and more. Energy will partly come from dedicated energy crops and energy farms.

• Clean energy will come from algae, solar, wind, wave, and energy crops.

• Glasshouses with vegetables will be on top of supermarkets — the produce will be sold downstairs.

• Agriculture and rain forests will provide us with medicine against AIDS, cancer, and so on.

• Life expectancy will be 90 years and people will work until 75.

• We will have to save money for our old age — state pension plans are something of the past.

• We might be subject to resource, water, or religious wars.

• There will be the creation of the United States of Asia.

• A new world currency will be backed by the global resources or an index of resource currencies.

• The US dollar will be “second-tier” currency.

• There will be earthquakes in California.

• China will be the number one world power and have a population of 1.5 billion people.

• India will be the second largest world power and have a population of 1.5 billion people.

• “Chindia” will have 40% of the world population.

• In schools, Mandarin will become obligatory, like English.

• Democracy in the Arab world will be the norm.

• Oil will be 50% depleted — Saudi Arabia returns to poverty.

• Old-age people will be the norm in Europe and Japan.

• The white race will be a minority in the United States.

• There will be a chronic deficit of women in China — a population now decreasing.

• Worldwide, Islam will be the religion of 30% of the global population.

• The Internet will be everywhere: on your fridge, in your car, in trains, airplanes, and so on.

• We will deposit a hair with insurance companies instead of filling out forms — our DNA will be our passport.

• Intelligence: the police and security forces will know exactly where we are at all times.

• Great advancements will made in medicine: there will be cures for cancer, AIDS, Ant Aging Medicine, and so on.

• In medicine the black box we call the “brain” will become more transparent.

• Bacterial diseases will start to spread.

• Water desalination with solar power will be the norm.

• The Sahara will be the solar power grid for Europe.

• High-speed trains across Europe and Asia will be the norm. We will fly less and take the train much more.

• Africa will becomes a powerful, rich continent, delivering natural resources to the world.

• Next to new energy, nature and agriculture are the sources for new medicines and many new products like biodegradable plastics and packaging material and ultra light car bodies made from active carbon.

• We will use more and more products made out of degradable active carbon. We will drive cars made out of active carbon fueled by hydrogen, electricity, or biofuels.

Remember: stock markets might go down, real estate prices might be shrinking, the

dollar might go down, the euro might fall apart, but agriculture and forests always keep

on growing. Always!

In August 2011, Aeromexico became the first airline to carry out a passenger flight across the Atlantic using Jatropha as a biofuel. A GE-powered Boeing 777-200ER aircraft, with a blend of 30% biofuel sourced from Jatropha and 70% conventional jet kerosene, flew 250 passengers from Mexico City to Madrid. Around 20 tonnes of the Jatropha fuel was supplied by Mexico’s largest airport operator and jet fuel provider Airports and Auxiliary Services. Aircraft manufacturer Boeing was also involved in the flight program.

Mexico’s sustainable jet biofuel strategy encompasses additional biomass sources such as algae, Salicornia, and castor seed. The airline says it is planning further biofuel flights despite limited availability of the fuel and the cost being considerably higher than conventional jet kerosene. Aeromexico is also flying with Camelina biofuel between Mexico City and Costa Rica.

On June 19, 2012 KLM flew from Amsterdam to Rio de Janeiro, Brazil, with a Boeing 777-200 on the occasion of a sustainable development conference. The aircraft engines were partly running again on sustainable fuel made from used cooking oil. KLM is open to use different kinds of biomass-feedstock for bioker­osene, as long as they meet a range of sustainability criteria, including a sub­stantial reduction in CO2 emissions, and minimal negative impact on biodiversity and food supply.

investment Opportunities

Too much of a good thing can be wonderful.

Mae West — actress.

20.1

There are three methods to refine feedstock into biokerosene: hydrogenation, the Fischer-Tropsch process, and nanoemulsion with polarization.

17.4.2.1 Hydrogenation

Hydrogenation is a hydrocracking process in a catalytic reactor whereby 30 kg per tonne hydrogen is added to the crude Jatropha oil in order to condense the oil’s energy content. Also, the oxygen is removed as carbon dioxide or carbon monoxide. This process is called hydrogenation (also known as hydroprocessing, hydrotreating, or hydrocracking). The resulting fuel is functionally the same as petroleum-based jet fuel, with the especially important characteristic of not freezing until —57°C, 21% better than the Jet A-1 specification of —47°C. The refining process is very similar to the hydroprocessing that takes place in petroleum (oil) refineries to produce jet fuel and other products. This process can yield a 70-75% fraction of jet fuel from the feed oil, with the remaining 25-30% converted to naphtha and propane ("liquid petroleum gas”). This hydrogenation process for producing bio jet fuel is
the most commercially advanced, with Honeywell’s UOP Division and Syn — troleum both claiming to have licensable processes. From discussions with UOP and Syntroleum, the cost for refining the bio jet fuel (including capital recoup­ment and the refiner’s profit) is estimated to be $0.40-0.65 per gallon.

Waterland (http://www. waterlandasiabio. com/jatropha) is a large private equity group in The Netherlands and a big investor in Jatropha. The company has an agri­cultural technology enterprise with headquarters in Jakarta, Indonesia. It has devel­oped high-yielding Jatropha plants that give a superior yield and oil content, which is a result of years of research and development. Waterland is a leader in Jatropha research and development in Asia, and together with its partners has successfully established first-class research and technology bases in Indonesia, Germany, The Netherlands, India, Vietnam, and Malaysia that are accelerating the commercialization of next — generation biofuels and renewable power generation. Combining agricultural and technological innovations, intellectual property rights, and extensive hands-on operational plantation experience, Waterland controls all aspects of Jatropha research, development, and cultivation, including bioengineering, high-tech conversion tech­nologies, commercialization ofvaluable byproducts, and the processing ofhigh-grade biodiesel. The Waterland Group Asia was established to support a joint investment initiative by several European-based companies who own and operate power plants in Europe, which require sustainable biomass energy sources to operate. Waterland currently produces Jatropha oil from over 12 000 hectares that have reached produc­tion status and the Group currently has over 60 000 hectares of planted Jatropha that will bear more and more fruits for crude jatropha oil in 2012 and 2013. The Group’s cornerstone is its social farming model where it endeavors to empower local farmers with the aim of bringing prosperity, independence, and self-sustainability to the communities surrounding the forest on a commercially sustainable basis.

The interest in Waterland’s Jatropha plantations from aviation companies has led the company to begin planning a new oil expelling and purification center at Kedu Selatan and another at Cilicap, Indonesia, which will allow for further

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

commercial quantities of Jatropha oil to be shipped to the airline industry and, after further refining, to be used as jet fuel.

Lufthansa, the German-based airline, has bought 200 tonnes crude of Jatropha oil at $1000 per tonne from Australia-based Jatenergy Ltd. for use in its long-term trial of renewable jet fuel.

Jatenergy has a joint venture with PT Waterland in Indonesia called PT Jatoil Waterland. This company has acquired 2- and 3-year old Jatropha plantations in Central Java, Indonesia, totaling 2000 hectares. Subsequently, the crude oil is refined into biokerosene in Singapore in the Neste refinery and sent to Lufthansa.

21.2

Paradoxically, an airline from the oil-rich Middle East is one of the first movers in the biokerosene race — Qatar Airways ("Your Five-Star Airline”). Qatar is the world’s number one gas producer and its refineries can produce biokerosene from domestic gas. This procedure is called gas-to-liquid (GTL). Qatar Airways has already made a test flight on 12 October 2009 using GTL kerosene from London Gatwick to Doha with passengers and the CEO on board. Now, Qatar Airways is developing biokerosene from biomass and plants, called biomass-to-liquid (BTL). In 2014, Qatar Airways hopes to fly with a 100% synthetic jet fuel as a mix of 50% GTL and 50% BTL, and give birth to the first zero-emission aircraft or zero-carbon aircraft in commercial air traffic! That would be a true sensation and I wish them luck in their efforts to realize their dreams.

In Doha, Qatar Airways, Qatar Science & Technology Park, Qatar Petroleum, and Airbus announced the establishment of the Qatar Advanced Biofuel Platform (QABP), which will prepare a detailed engineering and implementation plan for economically viable and sustainable biofuel production, a biofuel investment strategy, and an advanced technology development program ("Qatar Airways sets up platform to research and develop alternative jet fuel;” www. energyboom. com).

For BTL, the group has been advised by Seattle-based Verno Systems Inc. (www .vernosystems. com), and has embarked on a very comprehensive and detailed feasibility study on sustainable BTL jet fuel. QABP is structured so that it can be expanded to include additional projects, technologies, investments, and partner­ships globally, and is focused on short-, medium-, and long-term goals.

19.3

It is my firm conviction that investing in the whole value chain of bioenergy, par­ticularly biofuels and biomass, is one of the best investment opportunities today. This means investments right at the source to produce plants and biomass. I visit numerous conferences, and talk to many scientists and end-users of renewable energy, but literally 99% of all the stakeholders forget that without investments at the source the value chain from plant to biofuel does not exist. I argue, if this apathy or unwillingness to invest in cultivating feedstock continues, a structural shortage of biofuels and biomass will continue to exist in the foreseeable future. Those com­panies and investors who secure a value chain by buying land, a plantation, long­term off-take agreements, or subsequently a woodpellet or agripellet plant and transportation to the end customer will be the big winners.

Those companies, like mining, power, cement, and chemical companies, that remain passive and do not act will be forced in a few years to pay a hefty premium for biofuels or biomass and eventually a substantial carbon bill from Brussels on top.

Twenty years ago most of us were living without the internet, without Google, Facebook, without BlackBerrys, smart phones, iPods, iPhones, and iPads. Today we cannot imagine life without the software and hardware in this information age. In terms of energy, we are in the first stage of a transformation towards a low — carbon society, even a zero-waste society. In the future, we will be driving in electric cars, or cars running on biodiesel, planes will fly on biokerosene, and we can build and live in houses that deliver so much power that we can sell it back to the grid. Silicon Valley is already changing from a computer hard — and software center into a renewable energy valley, full of starts-ups experimenting with algae, enzymes, and so on. It should now be called Biomass Valley.

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

I do not believe that airplanes will fly on battery power in the coming 25 years. Batteries do not store enough energy to let a plane fly for 5000 km. Thus, planes will rely on liquid fuels for the time to come. The Swiss scientist Bertrand Picard has flown a plane using solar panels and plans to fly around the world with it (www. solar- impulse. com). He will prove it can be done, but we are still far away from commercial flights with 300 passengers on board, powered by solar or hydrogen energy.

Investment opportunities in biofuels and biomass are so obvious, because certainly in Europe and lately also in Australia, governments are imposing new laws that makes emitting carbon dioxide very expensive. This accelerates massively the demand for clean energy and clean fuels. On my travels throughout Eastern Europe and Asia, CEOs of big mining and utility companies have revealed what their purchase needs are in the coming 5 years for woodpellets, woodchips, palm kernel shells, olive oil seedcake, or any biomass with a good calorific value expressed in gigajoule per tonne. If they do not buy it and if they do not cogenerate fossil fuels with clean energy to lower their carbon dioxide output, they are going to pay substantial penalties for their extra carbon dioxide emissions, which for big com­panies can run into hundreds of millions of euros. Thus, the discrepancy between exponentially rising demand and a moderate supply of biofuels and biomass is, in a nutshell, a great business opportunity. The demand floodgates for biomass feedstock like Jatropha, Pongamia, algae, sugarcane, Napier grass, waste, animal fats, and used cooking oil are opening up.

In general, biokerosene can be derived from the world’s three existing sources — petroleum, plants, and animal fats.

20.2

Next to hydroprocessing, an old technology exists — the Fischer-Tropsch process invented by Franz Fischer and Hans Tropsch in Germany in 1925. Who will win the race between Fischer-Tropsch and hydroprocessed aviation fuels? The Fischer-Tropsch process is a four-step synthesis that first involves gasifying bio­mass feedstock and reacting it with steam at moderate pressure and elevated temperatures in the absence of combustion. The resulting synthesis gas ("syn gas”) often contains impurities like sulfur and large amounts of carbon dioxide, which requires that it be scrubbed. The third step involves passing the syn gas over a catalyst (usually iron — or cobalt-based) to form a variety of hydrocarbons. Depending on the gasification process, one can alter the reaction conditions (pressure, temperature, time, or catalyst), resulting in changes to the molecular structure of the hydrocarbons. Using well-established refining methods, the hydrocarbon is upgraded to the subsequent liquid fuel.

Although both processes produce essentially the same end fuel, the differences between biomass and oil-seed-based aviation fuels are stark.

The idea of producing synthetic aviation fuel is hardly a new concept. Germany pioneered the production of Fischer-Tropsch synthetic fuels during World War II. Currently, the South African airline Sasol (www. sasol. com) produces approxi­mately 150 000 barrels per day at its coal-to-liquid facilities. (South Africa also used the Fischer-Tropsch process during the era of apartheid.)

A number of companies are currently exploring the utilization of the Fischer- Tropsch process to transform biomass into aviation fuel. Companies like Choren, Rentech, and the Solena Group have announced commercial projects that could result in hundreds of millions of gallons of production capacity coming online by 2014.

Synthetic aviation fuels created via a process known as biomass-to-liquids (BTL) have a number of benefits beyond the obvious one — that they are not petroleum — based! Fischer-Tropsch fuels have lower carbon and particulate matter emissions, thermal stability, and can be derived from any type ofbiomass, as well as from coal and natural gas.

In the race to the commercialization of aviation biofuel, hydroprocessing has a number of advantages over the Fischer-Tropsch process. First, in recent years, every major airline that has tested biofuels has used jet fuel derived from hydroprocessing. For example, when Virgin Atlantic became the first commer­cial airline to oversee a flight partly powered by biofuels, it used a 25% blend of biofuels in one of its engines that included hydroprocessed coconut oil and babassu oil. KLM, Air New Zealand, Qatar Airways, Continental Airlines, and Japan Airlines have also completed flights using biofuels like Jatropha, algae, and Camelina.

In 2014, 100 million gallons of Camdina-based jet fuel are expected to be delivered to 15 airlines by Sustainable Oils and AltAir. There are a number of commercial hydroprocessing plants being built, most notably by Neste Oil and ConocoPhilips.

For example, Neste Oil has built a facility in Singapore that has a production capacity of 58.2 million gallons per year at an upfront capital cost of $135 million. Another Neste refinery with the same concept was opened in the fall of 2011 in Rotterdam.

Given the strategic importance for the military of obtaining copious amounts of domestically sourced energy and the blank check the Department of Defense receives, it is clear that aviation biofuels are coming — whether from the Fischer — Tropsch process or hydroprocessing.