A great business opportunity has opened for Israel in the green jet fuel market. The new EU Phase III Emissions Trading Scheme (ETS) for green jet fuel seeks to reduce greenhouse gas emissions by planes operating in member states. The regulations will likely spur a large market for jet fuel made from algae.
The regulations will come into effect in 2013. Airlines that land in EU member states will be required to reduce their carbon dioxide emissions by 15% a year, or else pay a fine for air pollution.
Dr. Isaac Berzin, founding director of the Institute for Renewable Energy Policy at the Interdisciplinary Center Herzliya, says that the International Air Transport Association (IATA) has three options for dealing with the stricter regulations: one - replace plane fleets with more fuel efficient planes, which would cost hundreds of billions of dollars and takes to plan and implement; two - reroute flights in Europe to create shorter and more direct routes; or three - switch to biofuels with lower emissions, which currently appears to be the most practical solution. The leading jet biofuel under development is made from algae.
Berzin says, "A market for bio jet fuel has been created, which is competitive in price to regular fuel when the emissions fine is added." He adds that the fines will double the price of regular jet fuel each year to the point at which it will no longer be viable compared with algae-based biofuel.
Berzin is a chemical engineer who specializes in algae research. "Time" magazine selected him as one of the 100 most influential people on its "2008 Time 100" list. He heads a joint project with an Arizona power company to develop algae-based bio jet fuel, which has obtained a $100 million grant from the US Department of Energy. He says that there are only a few countries spearheading algae growing systems, and Israel stands out among them.
Rosebud Energy CEO John Antoniadis has said that he is prepared to invest $500 million in research to produce algae-based bio jet fuel. Rosebud Energy Deutschland GmbH is a German renewable energy investment company.
Antoniadis is seeking to invest in Israel in the field. On a visit to Israel last week, he met Minister of Environmental Protection Gilad Erdan and Minister of National Infrastructures Uzi Landau, and potential strategic partners, including contractors, oil refineries, and fuel companies. He said that he has a signed contract with a large European airline, which stipulates that if he can supply algae-based bio jet fuel, the airline will buy it.
Erdan said, "If there is a body willing to finance this, and the entrepreneur says that he already has a contract with a European airline for the sale of the product, all that's left for us is to allocate land and find a way to get the carbon dioxide, which the algae consume, to the area. We only have to find the right way to do it."
Berzin says that Israel has a critical opportunity now, and that the window of opportunity has to be seized within six months. He says that Greece has an alternative site in a 20-kilometer valley near Astakos, where farmers overpumped the aquifer, and seawater penetrated it, rendering the area unfit for agriculture. The Greek government is willing to allocate the site for the project. "The question is, how fast is Israel willing to move to get this project off the ground," he said.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2010
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