Finnair said it plans to continue green fuel trials, with the hopes that the developing cost structure will support future investment.

One of the challenges of using conventional biofuels in existing infrastructure is its propensity to damage engine components, such as seals. It is for that reason that the inclusion of biofuels in forecourt fuels is typically limited to around 10% or less. However, one company believes it has found the solution with a direct corollary for conventional fossil fuels derived from organic matter.

Kaisa Hietala, vice president of renewable fuels at majority state-owned refining company Neste Oil, explains: “It was a conscious decision not to produce biodiesel, but with this fuel we wanted to create a solution in which consumers could use 100%, for example, in fleet use in buses and so on.”

For example, in August 2013 the company revealed that it is part of a year-long fleet demonstration programme in Coburg, Germany, with the aim of introducing to the market a fuel with a significantly higher proportion of renewable content than current diesel blends. The new blend, known as Diesel R33, contains 26% NExBTL, 7% conventional biodiesel (FAME) produced from used cooking oil, and 67% fossil diesel. The maximum limit for adding FAME-type biofuel to fossil fuel under the EU'S Fuel Quality Directive (FQD) and the EN 590 diesel standard is 7%.

This demonstration project is financed by the Bavarian State Ministry of the Environment and Public Health (StMUG), the European Union, and various other partners.

The fuel has zero aromatics and zero sulphur, Hietala explains, meaning that it behaves exactly like diesel and can be used as a “drop-in fuel”.

“This is compatible with current fuel logistics, meaning that all retailers and fuel wholesalers can use the same tanks, the same pipes and so on,” she said.

“When we are producing this fuel, we are using the same technology as normal refining. We are breaking down the vegetable oil molecules and reorganising them and creating a copy of conventional diesel if you look at the chemical structure, but the origins are renewable.”

Sourcing Sustainable Fuel

The NExBTL biofuel hydrogenation process is based on as many as 10 different raw materials, giving it the most diverse – and, therefore, potentially stable – supply chain. Hietala figures a 40-90% reduction in CO₂ production per litre of fuel, depending on the raw materials used, as well as lower exhaust emissions.

Among the diverse raw materials used, the product is derived from 50% palm oil and 50% from waste and residue raw materials such as fish and animal fats, but can also include materials such as tar oil pitch, technical corn oil and PFAD (Palm Fatty Acid Distillate), a material derived from palm oil refining. Soya bean, rapeseed and jatropha oils are also all compatible with the NExBTL process.

Nonetheless, Neste Oil is also continuing research into new raw materials which are not derived from potential food resources. For example, at the end of July last year the company announced that it had added technical corn oil – a residue generated during ethanol production – to the list of suitable feedstocks. Trials to confirm the suitability of technical corn oil for producing NExBTL diesel were carried out in spring 2013, and Neste Oil has now started using the material on a commercial basis. Supplies are currently sourced from the US.

“Our strategic aim is to constantly extend the range of renewable feedstocks we use to produce renewable fuels, and in particular the volume of waste- and residue-based materials we use,” Matti Lehmus, Neste Oil's executive vice president, oil products and renewables, explained.

“Technical corn oil is an excellent addition to our feedstock base, as it is officially approved for producing renewable fuel intended for the growing North American market.”

Neste Oil currently invests around €40 million in R&D annually, the bulk of which, some 70%, is allocated towards research into renewable feedstocks and renewable refining technology. Microbial oil and algae oil will be the most interesting new alternative inputs in the future.

Back in September 2013, Neste Oil and Raisioagro launched a research project to investigate the potential of straw as a raw material. Large quantities of waste straw are produced as agricultural residue in Finland and elsewhere, and the project will study whether a logistically effective and efficient, large-scale straw harvesting chain could be created in Finland.

Indeed, Neste Oil has been testing processing of straw for some years, and pilot-scale microbial oil production trials were started in 2012 when Europe's first such pilot plant was commissioned at Porvoo.

Says Lars Peter Lindfors, Neste Oil's senior vice president, technology: “This latest research project will give us valuable new information on the true potential straw offers as a feedstock for producing renewable fuel in Finland, and on the logistics chain needed to supply straw in the quantity required for an industrial process like ours.”

In 2012 Neste produced around 2 million tonnes of its NExBTL product, making it the largest such producer of biodiesel worldwide.

Furthermore, its biofuels division is expected to deliver a €200 million profit over the 2013 financial year. Overall, the company has invested approx. €1.5 billion in the production of renewable fuels. Renewable products accounted for 12% of Neste Oil's total net sales of €17.9 billion in 2012.

Applications and Markets

Neste Oil has been expanding trials of its fuels since launch and has been working with a number of major air carriers. According to Arja Suominen, senior vice president of communications and corporate responsibility for Finnair, it has been working with Neste Oil on developing and testing of biofuel alternatives to jet fuel.

However, Suominen notes, “the challenge, of course, currently is that biofuels are expensive. On a cost basis, fuel accounts for one third or one quarter, so seeing the costs double would simply not do. Of course, when the volumes go up they will become less expensive.”

Nonetheless, Finnair does plan to continue trials and investment in green fuels infrastructure despite the additional costs. By way of context, the company spent some €800 million on kerosene in 2012 transporting 8.7 million passengers.

“Right now it's a little bit of a chicken-and-egg scenario and we're looking at first flying 50:50 or even less when conducting trials,” Suominen said.

“What we'll probably do is start with smaller amounts of biofuels and then add more and more as the costs come down, but this is something we are committed to. We've had commercial negotiations already to make Helsinki the green hub of northern Europe. We will see something within the next few years and then gradually on a larger scale.”

In mid-November Neste Oil joined a Dutch initiative with partners, including KLM, SkyNRG and Schiphol Airport, to develop a comprehensive jet fuel supply chain based on its biofuels products. The move came just a year after the company joined the ITAKA (Initiative Towards Sustainable Kerosene for Aviation) project, which is being funded by the European Union to support the commercialisation and use of renewable aviation fuel in Europe.

This 36-month project has been granted some €10 million under the EU'S Seventh Framework Programme for Research and Development, and Neste Oil will produce a total of 4,000 tonnes of NExBTL under the scheme, which includes Airbus and Embraer, for example.

In addition, during a recent six-month trial, Lufthansa flew close to 1,200 flights between Frankfurt and Hamburg using NExBTL. Furthermore, Neste Oil has also committed to the European Aviation Biofuels Flightpath and the targets it contains for increasing the use of biofuels in aviation by 2020 to 2 million tonnes annually.

However, despite these drivers, the demand for biofuels from the aviation industry has not picked up as much as expected. As Hietala explains: “We thought that aviation would pick up biofuels pretty quickly, as they have very ambitious greenhouse gas saving targets and the aviation sector is growing all the time. But with the current financial challenges many aviation companies are facing, we have not seen marked demand [growth], so currently the majority of the production is for renewable diesel.”

Whatever the long-term prospects for the airline industry, there are clearly green alternatives to fossil fuels and they're available in commercial volumes. What's more, cost considerations aside, buyers can be confident that it's a product which has been extensively tested across the streets – and skies – of Europe and beyond. ♦

David Appleyard is a freelance journalist with extensive experience covering energy, technology and finance sectors.

This article was published in the January/February 2014 issue of Renewable Energy Focus magazine.

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