China embraces Jatropha Jet Fuel

As of today, China consumes nearly 20 million tons of aviation fuel each year, and China Petroleum & Chemical Corp, also known as Sinopec provides 70% of it. Following regulatory approval from the Civil Aviation Administration of China (CAAC) the company is actively seeking new raw materials for aviation biofuel. China hopes that nearly a third of the fuel used by its rapidly expanding airline fleet will come from plants.

Going forward, China is expected to use 12 million metric tons of aviation biofuel a year by 2020. This will equal about 30% of projected total jet fuel consumption which in itself is predicted to double to 40 million metric tons a year by 2020. The market value of Chinese jet biofuels is estimated to exceed 120 billion yuan ($19 billion) by 2020.

In October 2011, China’s flag carrier Air China became the first Chinese carrier to conduct a successful demonstration flight powered partly by jatropha based biofuel, paving the way for future biofuel use on commercial flights in the country. The one-hour trial used 15 tons of biofuel blend – half conventional jet fuel and half China-grown, jatropha-based biofuel – to power one of four engines on an Air China 747-400 jet. The jatropha plants were cultivated by PetroChina, a state-owned oil company, on a plantation in southwest China in the mountains of Yunnan province and refined by Honeywell.

For China, the demonstration flight was a significant step toward establishing the aviation biofuels industry in the country. It will certainly create public awareness, stimulate upstream investment into feedstock production and promote the commercialization of bio jet fuel in China. Further test flights across the Pacific Ocean to a North American city are planned for the next few months.

Air China’s maiden jatropha flight is a result of a broader effort kicked-off in 2010 by China’s National Energy Administration and the U.S. Trade and Development Agency to address the technical, economic and institutional factors required for the development of a new biofuels industry in China. The team wich includes various government agencies and associations, was to address feedstock harvesting and processing, the establishment of refining capacity for commercial production, and the development of the infrastructure to store, deliver and dispense biofuels.

The use of jatropha-based fuel could have particular appeal in China, which has plentiful swathes of dry and barren land to devote to growing the plant. In line with soil and climate conditions, Jatropha is grown on low-quality farmland and wastelands in Southwest China’s Sichuan, Yunnan and Jiangxi provinces since 2007.

PetroChina, the listed arm of the countries largest oil and gas producer and distributor, China National Petroleum Corporation (CNPC), is planning to build a bio jet fuel refinery by 2014 to produce 60,000 tons of jatropha based aviation biofuel annually. However, that amount is still minimal compared to the estimated 28 million tons of biofuel China will use annually by 2015.

The biggest challenge going forward is the availability of sufficient jatropha feedstock. According to PetroChina estimates the country boasts about 800 million mu (i.e. 53.4 million hectares) of barren hills suitable for growing jatropha seeds.

The Chinese airlines have realized that feedstock supply security is essentially linked to investments into the source. Over the next four years alone, the mainland’s aviation industry is expected to inject as much as US$300 million to expand its supply of biofuels.

By 2015, China targets to replace 1 per cent of the country’s annual jet fuel usage with biofuels. Establishing a domestic biofuel supply chain would help meet China demand for jet fuel, which according to the Civil Aviation University of China (see reference below) is projected to increase to 23.7 million tons in 2015, from 15.3 million tons in 2010, and to 40 million tons in 2020.
Biofuel would also help Chinese aviation meet its target of reducing CO2 emissions by 3% a year. At the 15th United Nations Climate Change Conference in Copenhagen in 2009, the Chinese government committed to a 40 to 45 percent reduction in overall carbon dioxide emissions per GDP unit by 2020 compared to the 2005 emissions level. Additionally, the Civil Aviation Administration of China (CAAC) has committed to a 22 percent reduction in aviation emissions within this same time period.