Deployment of aviation biofuels studied

Ministry of Transport and Communications
Publication date 28.11.2014 12.31
Press release

According to a recent study Finland is well-positioned to start extensive and continuous use of biofuels in aviation. The key issue to be solved is profitability, since biofuels are currently clearly more expensive than fossil aviation fuels.

The preliminary study on the subject was commissioned by the Ministry of Transport and Communications, Ministry of Employment and the Economy, Finnair, Finavia and Neste Oil. No comments have yet been made on the ideas and measures proposed in the study.

The study examined different business models that could cover the additional costs of using biofuels in aviation. Based on those models a concept that could be applied in Finland was developed. It could serve as a basis for discussions between the actors involved.

Minister of Transport and Local Government Paula Risikko says that the use of biofuels in aviation would strengthen Finland's image as an innovative forerunner in clean technology and bioeconomy.

"It would also provide many Finnish companies with an entirely new business area, make the Helsinki-Vantaa airport more widely known and increase its attractiveness as an important gateway between Europe and Asia", she says.

The study is based on the hypothesis that aircraft quality biodiesel will be approved for aviation. Preparations are currently underway for an international approval that would enable the use of renewable biodiesel as a biocomponent of aviation fuel. No separate investments in production would be required. However, investment in logistics would be needed to make the deployment cheaper and faster. According to the concept the aviation biofuel would be produced at the Sköldvik refinery in Porvoo, Finland.

The proposed concept is based on the assumption that demand creates supply. The additional costs incurred from biofuels would be covered by passenger ticket prices. The study proposes that the public sector and the so-called forerunner companies would be the first to participate in financing the additional costs of using biofuels. They would later be followed by other companies and private passengers.

According to the study the project would need public aid at its launching stage to open up the markets. However, the extent of biofuel use would in the end depend on clients' interest and readiness to pay. The study admits that the clients' actual readiness to pay is uncertain and not easily predictable.

Further information:

Kaisa Hietala, Executive Vice President, Renewable Products, Neste Oil, tel. +358 50 458 4128
Kati Ihamäki, Vice President, Sustainable Development, Finnair, tel. +358 40 582 2107
Mikko Viinikainen, Sustainable Development Director, Finavia, +358 40 530 2646
Anna Sotaniemi, Senior Government Adviser, Ministry of Transport and Communications, tel. +358 29 534 2491
Juho Korteniemi, Ministerial Adviser, Ministry of Employment and the Economy, tel. +358 29 506 0016

Paula Risikko