Environmentally Friendly Alternative Fuels -

Critical to Aviations Future

www.caafi.org

Future of Aviation Advisory Committee

(FAAC) Subcommittee on the Environment

August 10, 2010

Richard L. Altman Executive Director, Commercial Aviation Alternative Fuels Initiative (CAAFI)

“(The) U.S. aviation industry is eager for an entirely new fuel dynamic and will be an enthusiastic purchaser “ ……..Letter dated 1/16/09 to President Elect Obama

Aviation Biofuels – Multi-year History

CAAFI Formed

2006

70%

63%

TotalImports

U.S. Production

U.S. Consumption

2005

Mill

ion

bbl p

er d

ay

1975 1985 1995 2005 2015

30

25

20

15

10

5

0

F

Improve Fuel Fraction

Reduce Crack Spread

Enhance Supply Security

New Sustainable Dynamic Economic Need

Jet < 10%Gasoline

Diesel

3

Global Climate

Reduce PM 2.5

Contain CO2 Growth

Air Quality

New Sustainable Dynamic Environment Need

Ozone PM 2.50

20406080

100120

Data for 50 Largest U.S. Airports

Non-at-tainment

Aerospace Industries Association

Air Transport AssociationAirports Council

International – North America

350 Sponsors/Stakeholders From All Continents * Actual attendance at 9/30/09 meeting 230 people, 125 entities

45 fuel producers

8 Universities, FAA Center of Excellence

15 Think Tanks, Consultants

21 Airlines, Exec Jets, Military, airport orgs.

CAAFI - Who We Are 14 Aircraft,

engine, subsystem

OEM’s

4 Oil service providers3 International

Finance

Federal Aviation Administration

17 government agencies / labs

COMMERCIAL AVIATION• 10X USAF fuel market• Multi-year procurement

and hedging fuel purchasing• oversight of certification via

ASTM• Concentrated Airport

Distribution (80% of fuel to 35 locations)

• Single global environmental framework via ICAO (U.N.) – FAA is U.S. Representative

• R&D Resources via NASA, FAA (CLEEN), Many Commercial teams

DOD/USAF• Self contained

development, certification, procurement.

• R&D Fuels research assets at via AFRL

• Initial Fit for Purpose testing via AFRL

• Section -526 LCA compliance with DOE

• Certification for Synfuel via Mil Spec

• Initial purchases of synfuels to verify production Scale up.

CAAFI/FAA Leveraging Government Partners

FEEDSTOCK SUPPLIERS

FUEL PRODUCERS

DISTRIBUTORS / FBO’S

CAAFI – How We Operate

Facilitate Maximum Opportunity “Flow-up”

Focus and Communicate Requirements “Flow Down”

DevelopDeploy

2009 Aviation Achievements • First Major Aviation Fuel Qualification

in 20 Years passed – ASTM D7566!• Four flight programs of Biofuels• ICAO Accepted Best Practices

- Fuel Readiness Level risk management.

- CO2 LCA Analysis Principles

• Four Commercial projects formed

Winner 2010 Air Transport WorldJoseph S. Murphy Award

for Industry Service!

2010 Off to Excellent Start • Hydrotreated Renewable Jet (HRJ/ Bio-SPK)

tracking to 12/10 ASTM Approvals (Jan. - June)• White House recognition of Aviation as lead

customer for Biofuels (Feb.)• FAA/DESC “Single Fuel Buyer” Alliance (March)• Greatly expanding the scope of potential

supplier discussions (April, May) • First Quantitative Jet Fuel Carbon LCA

(PARTNER) leads aviation centric impact quantification (May)

• “Farm to Fly” with USDA announced (July)• “One Buyer” United Aviation Exhibit at

Farnborough Air Show (July)

Going Forward Approach/Challenges

• Accelerate Development and Certification

• Mechanisms for Rapid Deployment and Quality Assurance

• Environmental Certainty and Crediting (Carbon and PM2.5)

• International Harmonization and Cooperation

Fiberized Sweet Sorghum

Camelina Rotation Crop

Accelerated Development / Certificaton

In Process• Execute Fuel

Readiness with USDA/DOE/DOD to one roadmap

• Increase Number of processes and feedstocks qualified

• Implement “Feedstock Readiness Risk Management (FERL) to Match Fuel Readiness

Issue / Challenges

Current FAA Advanced Fuel Programs is one year Congressional Plus up

Year Fuel Type Status2009 - 50% FT Synjet blends

including biomass/coal/gas- Approval executed September 09’ under ASTM D7566

2010 - 50% HRJ Synjet Blend - Currently being balloted…12/10 Approval target

2013.4 - Other Biofuel process blends

- Fermentation Processes from sugar and Cellulosic material- Catalytic Processes processes from sugar and cellulosic material- Pyrolisis from cellulosic material.

CAAFI Certification Timing Targets and Status

12

Rapid Deployment / Quality Assured

In Process:• Initial MOU’s, intent

to execute Purchase agreements, signed

• Many Success Models Being Pursued at State Level

• “Top Down” regional studies (“farm to fly”), tools development

• Quality Assurance targeted with Congressional “Plus-up”

Issues/Challenges• Financial Support

inadequate:- One year

funding of $1/gallon introductory credit

- 80% Loan guarantees for production facilities

- 5 year max. purchase agreements for government buyer • Quality Program

multi-year to assure success.

Multiple Success Models (most promising) California*Florida **GeorgiaHawaii**Illinois**

Michigan**Minnesota**Mississippi*

Ohio**New York**

North CarolinaNorth Dakota**Pennsylvania**

OklahomaTennessee**

Texas**Washington*

* airline/producer agreements ** study proposals or Pilot Plants

Planning & Tools Developments Tool Suite Available or in process• ACRP 02-07 Fuel Cost /benefit (complete)• ACRP 02-18 Airport / Supply chain handbook• ACRP 02-23 PM 2.5 Airport Priorities • Carbon Neutral Growth Scenario Analysis• Next Gen Insertion Optimization Tool Projects to Begin Soon• “Farm to Fly” Regional Top Down analysis• ACRP Multi-Modal Assessment project • USAF / CAAFI “Biofuels Summit II” with USDA with

USDA regions. • Feedstock Readiness Level Risk Management

Construct under USDA / FAA MOU

Environmental Certainty / Crediting

In Process• DOE / USAF carbon

LCA (sec -526) Compliance Model (with FAA/EPA)

• PARTNER (MIT) / FAA Aviation Specific Carbon Life Cycle Analysis

• Air Quality PM 2.5 measurement and analysis process gains

• Examination of Verification Process candidates

Issues and Challenges• Crediting benefits

fo Purchaser under co-mingling

• How will Renewable Index Number process be applied in RFS-2?

• Slow development of Aviation specific Particle modeling tool

• Will Aviation Specific Issues have priority at EPA (we’re 2% of GHG)?

“Ground to Wake” Carbon LCA

Aviation Specific LCA

Executed by DOE / USAF with

FAA/MIT and EPA

Compatible International Planning

In Process• EC Interchange and

Contributions with CAAFI Teams

• Leverating strong Independent Partner Assets with E.C.

• Specific proposals for areas of cooperation

• Broad Participation in the Roundtable on Sustainable Fuels, Air Transport Action Group (ATAG)

Issues and Challenges• Taxes (ETS) vs.

Environmental friendly fuel incentives

• Renewable quotas vs. carbon neutral growth

• U.S. Cooperative model difficult to emulate owing to member state differences in EC

• “Opportunity cost”, time penalties EC/US negotiations

Europe/U.S. Have Strong Partner Assets • Industry Partnerships – e.g. CFMI, IAE, P&W/MTU

• Significant standing (FAA/EU) dialogue

• EU / CAAFI program links now

• Shared contractors/processes

• Similar approach to ICAO (U.N.) (2009 common goals/methods )

• Aviation Positioned on “Cutting Edge” to be high visibility“First Mover”

• Pathways / roadmaps to success established /recognized

• Challenges / Remedies well understood

• U.S. CAAFI Public / Private Coalition global model

Environment Friendly Aviation Fuels?