In the short term economics is the major hurdle to overcome for the deployment of alternative fuels in aviation.
Current assessments converge on an lack of competitiveness of alternative fuels compared to conventional jet fuel in the initial development phase before best practices, progress in production technology and economies of scale can bring about meaningful cost reductions.
Incentives, or compensation mechanisms for the environmental benefits of using these fuels, are required to bridge the price gap in order for airlines to buy the fuels and to create a market perspective that will attract investors and reduce the perceived risk of this emerging industry. ICAO is currently working with Member States, technical experts and stakeholder groups to integrate alternative fuel into the developing Global Market Based Measure (GMBM). This integration would help incentivise the use of sustainable alternative aviation fuels.
Renewable energy policies, which exist in most countries, support the deployment of biofuels for road transport through mandatory production quotas and fiscal incentives. A level playing field needs to be created for aviation in order for fuel producers to also consider this market, where technical requirements for fuels are also more stringent.
Beyond supporting measures, a key to the deployment of alternative fuels in aviation is to bring costs on par with fossil fuels. This requires improving efficiency and reducing the costs of both transformation processes and feedstock production, which will necessitate further support and investments in research and development, as well as the demonstration and scale-up of technologies.
Reference:
ICAO SUSTAF experts group report, “The Challenges for the Development and Deployment of Sustainable Alternative Fuels in Aviation”, May 2013.