Eid Al-Olayyan, CEO of Petrixo Group, explains how green fuels can power the world towards a better future.
Green fuels are second-generation biofuels. These new energy solutions are important for scalable, accessible, environmental, and renewable solutions. Petrixo Biofuel Refinery, a Fujairah-based company leading green fuel production in the Middle East, is aiming to produce green fuels that have the potential to transform the energy and petrochemical landscape of the country for the better.
Currently, the world is in a state of green fuel fever and the green fuel market is on the brink of remarkable success. Second-generation green fuel is portrayed as having huge potential benefits. The robust outlook for green fuel demand in the USA, Europe, GCC and Asia is growing and the trend will continue over the next 30 years and further.
Just a few years ago, the idea of manufacturing fuels from biomass based feedstock was just a theory – a twinkle in a scientist’s eye. Yet today, through a combination of research breakthroughs, with proven, tested technologies, certification by bodies such as the US ASTM, and demand from an industry eager to switch from fossil fuels to green fuels, production of green fuels in commercial quantities are just around the corner.
Green Fuel Production
The green fuels leader in the Middle East, PETRIXO Biofuel Refinery, in line with the American and European ASTM quality standards, will produce green oil products in the UAE including green jet fuel, green naphtha, green LPG, and green diesel. The produced green fuels are ecologically safe and will be competitively priced.
Policy and Commitment
The UAE’s General Civil Aviation Authority has been at the forefront of environmental initiatives. In May 2012, the Minister of Economy and Chairman of the General Civil Aviation Authority (GCAA), HE Sultan Bin Saeed Al Mansoori, approved an Environmental Policy for the civil aviation sector. This policy reaffirms the role of the International Civil Aviation Organisation (ICAO) in leading efforts to reduce the impact of emissions of civil aviation and climate change.
On November 3, 2015, Dubai joined the climate change battle through its membership of the group C40, a global network of large cities taking action to address climate change. Membership of C40 gives the Emirates powerful tools to slash global emissions. It has been reported that C40 cities have a crucial role to play in ensuring that the world will follow a low carbon pathway and are three times more likely to take action if a goal or target has been established.
Market Demand / Market Opportunity
The green aviation fuel market is created by demand from airlines; conversely, the green diesel market was created by mandates to fuel suppliers. The airlines have taken a leading role in setting up green aviation fuel value chains in partnership with existing green aviation fuel producers around the world.
Attracting investment and Financing
While airlines and other transportation companies are enthusiastic and committed, there are still barriers to overcome. There are companies with proven technologies out there, but getting to scale is going to be hard due to challenges in obtaining finance.
Petrixo is not alone in its readiness for the next stage of market development. Raising finance for green projects can be a complex exercise and presents a wide range of challenges, especially because it will require significant debt and equity financing. Therefore, in order for any green fuel project to have successful financing strategies, it will require careful attention and planning at an early stage by utilising its core competencies.
The aviation and transportation industry is eager for sustainable green fuels. This is a good opportunity investors do not want to miss. The land transportation and aviation sectors have made it clear that they want renewable, sustainable green products and there is no doubt it will happen. The green industry is developing, and there has already been a lot of progress. Investors and financing institutions should act now: the market is coming to life.
Currently aviation is responsible for at least two per cent of the total manmade GHG emissions worldwide. However, IATA estimates that the worldwide aviation sector will grow to 4.5 per cent per year, which could result in six times more CO2 emissions in 2050.It is IATA’s vision to reduce net CO2 emissions by 50 per cent by 2050, compared with 2005 levels. Furthermore, all industry growth will be carbon neutral from 2020 onwards. As stated above, this ambitious target could be achieved with green aviation fuel. However, biofuels need to be produced in a sustainable manner and save greenhouse gases (GHG) in comparison to fossil fuels.
No sector of the world’s economy is more ripe and ready for the carbon reduction approach to emissions than the aviation industry.
We see a very bright future, particularly in the aviation field, which is going to be a big market for the green fuels of Petrixo, with demand coming from both commercial and land transportation sectors.
Success in such new, green products does not come easily, especially in a world of intense competition; it comes through hard work, dedication, and passion. We strive to achieve the best and make our work extraordinary. We are passionate about what we do and we are goal driven to excel in every aspect of the green industry. If we do nothing and fail to be ambitious, our green industry will suffer. It is only when we are bold enough and we invest appropriately that we will deliver the vision, mission, and our goals from now and beyond.
Barriers to Development
Airlines, as well as land transportations, are pushing for commercialisation of recently developed alternatives in a bid to diversify their fuel supply and reduce their environmental impact. However, there are a number of barriers to the development of renewable fuel production that can meet the demand at a price that competes with fossil fuels, such as:
- Lack of impartial, accurate information on production methods and performance, and the potential for production of useful quantities, is hindering investment in scale-up and forcing caution from consumers who cannot risk faltering supply.
- Greenfield biofuel refinery projects require a substantial amount of capital. Financing challenges remain a bottleneck in facilitating construction of commercial fuel manufacturing facilities. It is obvious that investment is needed to build these plants and get production capacity to a scale where biofuels become available at a competitive price – that is the hurdle the industry needs to overcome now.