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IADB Financing Bio-Jet Fuel Development

by Mike Godfrey, Tax-News.com, Washington

13 June 2011


The Inter-American Development Bank (IADB) has approved an initiative to aid Latin American and Caribbean public and private institutions in developing sustainable biojet fuels industries.

The IADB said the decision will open up funding for consultancy services, knowledge development and workshops on the sustainable use and production of biojet fuels, with the goal of demonstrating their feasibility for the regional aviation sector, and develop the region's potential to export such fuel.

Through the initiative, the IADB will partner with aviation industry stakeholders that are leading the development of alternative aviation fuels, such as the International Civil Aviation Organization, the Commercial Aviation Alternative Fuels Initiative, and the World Economic Forum as well as individual airlines, aircraft manufacturers and biofuel technology providers. These institutions and companies are working together on regulations and targets for carbon emissions reductions with the goal of displacing as much as 50% of jet fuel worldwide by alternative sources by 2050.

Options for alternative fuels in this sector are currently limited because of the technical requirements of jet fuels. The IDB project will make it possible to explore and develop technologies that will produce feasible substitutes to traditional fuels in the aviation sector, the IADB said. This would enable Latin America and the Caribbean (LAC) to play a lead role in the supply of a competitive value-added product. It is anticipated that the production cost will be lower in the LAC region.

“This new biofuel market niche has excellent prospects due to its strong association with climate change issues, and the great stakeholder motivation and support to biojet fuel,” said Arnaldo Vieira de Carvalho, leader of the IDB team for the initiative.

Laura Natalia Rojas, co-leader of the IDB project team, said the biofuels' aviation market is expected to encounter fewer technical and market obstacles due to the approach being adopted by the aviation industry, which does not require adaptation of engines or of storage and distribution infrastructure. This, it is believed, will make it considerably easier to introduce biojet fuels to the global market.

Airlines based in the LAC countries have held several biojet fuel demonstration test flights in the last two years with fuels derived from feedstocks, such as jatropha, and several more tests are planned for 2012.

Countries that have already initiated the development of sustainable biojet fuels in the region, including Brazil, Mexico and Colombia, will be among the first to benefit from the grants.

TAGS: aviation

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