Dive Brief:
- BP has invested $30 million in Fulcrum BioEnergy Inc., a company which makes biofuel for jets from a waste gasification process, as reported by Bloomberg.
- A 10-year deal has also been worked out for BP to buy 50 million gallons of biofuel from Fulcrum's North American facilities. The biofuel will be distributed through Air BP Ltd.
- Fulcrum has received major equity investments from United Airlines, Cathay Pacific Airways and Waste Management.
Dive Insight:
This announcement follows a United Nations accord reached in Montreal last month which creates a global system in which airlines will pay for environmental initiatives to offset their emissions. While gasification hasn't caught on as a large-scale processing method for solid waste, the potential to make cleaner jet fuel is appealing to airlines as they face greater scrutiny for their environmental effects.
Fulcrum's Sierra BioFuels Plant in Nevada will present a business opportunity for waste companies once it opens in 2019 and that potential will increase as the company expands. Affiliates of both Waste Management and Waste Connections have long-term agreements with Fulcrum to provide municipal solid waste feedstock for the facility. Once it's running, the Nevada facility will process about 200,000 tons of prepared feedstock to create 10 million gallons of biofuel per year.
If successful on a large scale, this type of waste-to-biofuel technology could go a long way toward improving the sustainability image of airlines. Hardcore environmentalists often criticize excessive flying, or don't fly at all, and some airports have struggled to develop effective waste management programs.
