Sustainable Biofuels and Commercial Aviation

BOEING is a trademark of Boeing Management Company. Copyright 2009 Boeing. All rights reserved.

Richard A. Wynne
Director Geopolitical and Policy Analysis Boeing Commercial Airplanes
March 3, 2010

Agenda !Aviation and the environment !Sustainable biofuels !Questions?

Why do we care?

! Why does a commercial airplane company care about biofuels?

Boeings proud agricultural tradition

! 80 head of cattle graze near the Apache flight line in Mesa, Arizona, minimizing incursion of Russian thistle, wild sunflower, and broadleaf weeds

A critical industry
! Air travel is, and will continue to be, a highly valued and integral part of the social and economic fabric of our world ! Air travel is crucial to business, personal relationships, transporting goods and improving the standard of living around the world ! Today, the air transport industry supports (directly and indirectly) more than 32-million jobs... about 8% of World GDP* ! In 20 years, these economic benefits have the potential to more than double
*The Economic and Social Benefits of Air Transport 2008, ATAG

Our challenge: aviations CO2 emissions contribution could grow from 2% to 3% by 2030
Emissions by sector, 20002030 Mt CO2/year
60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000

3% of total

2% of total

Air Other transport Power Industrial Buildings Forestry Agriculture & waste

2000

2005

2010

2015

2020

2025

2030

Source: McKinsey & Co. /WBCSD Mobility 2030 model; IPCC

Aviation in the spotlight

Making selfish choices such as flying on holiday or buying a large car are a symptom of sin. Richard Chartres, Bishop, Church of England

The industry is committed to action on climate change

we are committed to a pathway to carbon-neutral growth and aspire to a carbon-free future.

ATAG 2008 industry declaration for action on climate change

Our plan and commitments

Relentlessly pursue manufacturing and life cycle improvements Improve performance of worldwide fleet operations Deliver progressive new products and services Pioneer new technology

100%
100% of Boeing major manufacturing sites will maintain ISO 14001 certification.

25%
Focus on 25% efficiency improvements in worldwide fleet fuel use and CO2 emissions by 2020.

15%
Improve CO2 emissions and fuel efficiency by at least 15%

75%
Devote more than 75% of R&D toward benefiting environmental performance

We are focused on specific objectives

Using less fuel Efficient Airplanes Operational Efficiency

Changing the fuel Sustainable Biofuels

Building on a strong track record

MORE FUEL

Early Jet Airplanes

HIGHER DECIBELS

Relative fuel use

90% Reduction in Noise Footprint 70% Fuel Improvement and Reduced CO2
Noise dB
LOWER DECIBELS

LESS FUEL

EVEN LESS

New Generation Jet Airplanes

EVEN LOWER

1950s
Noise footprint based on 85 dBa.

1990s

Airspace modernization will provide significant near-term benefits

Current situation: ! Most air traffic systems are serving increased demand with outmoded technologies ! System congestion and delays waste fuel and increase emissions Vision for the future: A next-generation air traffic system will enable more direct/efficient routing and taxi routes and eliminate wasteful holdtimes in the air ATM enhancements could improve fuel efficiency and CO2 emissions by up to 12% IPCC Cutting flight times by a minute per flight on a global basis would save 4.8 million tons of CO2 every year. IATA

World air travel has grown 5% per year since 1977

5.0 4.0
RPKs (trillions)

3.0

T re

nd

2.0

1.0

0.0
RPKs = Revenue Passenger Kilometers Source: ICAO, Scheduled Traffic and operating profit
2009E 1985 1986 1987 1988 1977 1978 1979 1980 1981 1982 1983 1984 1989 1990 1991 1999 1992 2000 1993 2001 1994 2002 1995 2003 1996 2004 1997 2005 1998 2006 2007 2008

In this context, growth is a double-edged sword

Background Key drivers of emissions reductions

Using less fuel

! Efficient airplanes ! Operational efficiency

Changing the fuel

Renewable Fuels

! ! ! !

Lower lifecycle CO2 Sustainable No infrastructure mods Sustainable Biofuels

Presented to ICAO GIACC/3 February 2009 by Paul Steele on behalf of ACI, CANSO, IATA and ICCAIA

Sustainable Biofuels are an essential enabler to continued growth

We are focused on specific objectives

Using less fuel Efficient Airplanes Operational Efficiency

Changing the fuel Sustainable Biofuels

Focus on Sustainability
Are all biofuels equal? What are the best sources?

Main categories of alternative fuels

Fossil Fuels 1st Generation Biofuels 2nd Generation Biofuels

Opportunities:
! Significant supplies ! Proven technology ! Steady supply ! Public policy support ! Lower lifecycle CO2 ! Avoids food for fuel ! Regional solutions ! Supply chain not mature ! Costs near-term

Challenges:
! Capital costs ! Energy, water intensive ! CCS tech. not mature ! Competes with food ! Airplane compatibility

We are focusing our efforts on sustainable biofuels

Sustainability considers environmental, economic and social impacts

No CO2 removed
CO2 removed

Lower CO2 lifecycle

Petroleum-based fuel Plant-based fuel

Does not compete with food or promote deforestation

Promotes local and regional solutions and economies

Boeing is focusing on alternate fuels that have low life-cycle CO2 emissions
3

Relative CO2 emissions as compared to jet fuel

Jet fuel from crude oil

Jet fuel from plant sources

Jet fuel from coal with CO2 sequestration

Jet fuel from coal

Sustainable biofuel supply chain overview

Commercial viability threshold requirements: " Sustainability principles established " Sustainability practices and auditing " Technology/agronomy in place " Fuel processing technology in place " Viable feedstock and processing developers in place
Feedstock project Biofuel processing project Biofuel delivery infrastructure Airline use

3 5 years

Our sustainable biofuels strategy

Enable the industry to achieve market viability by 2015 Success criteria
Five focus areas 600+ million gallons/yr of bio content 5-10 feedstock/fuel production projects

Fuels Approval

Feedstock Viability

Airport Infrastructure

Commercial Production

Support and Advocacy

75%

20%

10%

10%

15%

Boeing Stakeholders: Commercial Airplanes Environment, Health and Safety Government Operations Boeing Research & Technology

Boeing Defense Systems Boeing International Global Corporate Citizenship

Act as catalyst to accelerate broad commercialization

Flightpath to a biofuelled future

Biofuelled commercial flights Establish mass distribution systems from refineries & blending facilities to airports Build production plants, refineries & blending facilities Produce feedstock Find the right parts of the world to grow the crops Certification Lab tests and analysis Test flights 2009 2010 2011 2012 2015 2020 2030 2040

Over time, as more feedstock is cultivated, more refineries come online and more biofuel is blended into fuel for commercial flights

Indicative proportion of biofuel to be dropped-in to the aviation fuel supply

<1%

1%

15%

30%

50%

Source: Beginners Guide to Aviation Biofuels, Air Transport Action Group (ATAG), May 2009

Accelerating fuel certification

Current specification Amended specification

Amendment to include high-performing sustainable biofuels

D1655

D1655

New specification will include high performing biofuels

Boeing is working to: ! Research and test fuel to inform the aviation community ! Increase airline participation in ASTM ! Write a technical fuel certification report

Emerging portfolio of feedstock options

Optimum land for growing sustainable aviation biofuels: Algae Jatropha Camelina
Other candidates emerging ! Tallow ! Castor ! Cohiba ! Etc

Circles indicate potential locations for biofuel feedstock growth (indicative estimate)

Feedstock diversity supports need for regional approach

Source: Beginners Guide to Aviation Biofuels ATAG, May 2009

Candidate sustainable biofuel feedstocks

Camelina
Ready Now Challenges
Limited total yield Tied to grain markets

Jatropha
Ready in 2 to 4 years Challenges
Warm climates only Manual harvest today

Halophytes
Ready in 2 to 4 years Challenges
Prove at scale Optimize agronomy

Algae
Ready in 8 to 10 years Challenges
Bio-optimization Competing approaches Processing costs

Viability based on timing, technology and local resources

Long-term trajectory of cost is crucial

Fossil Fuels mature technology chasing finite & diminishing supply Biofuels emerging technology driving renewable & increasing supply

COST

TIME
*Data is notional

Aviation is uniquely structured to maximize benefits of sustainable biofuels

Road transport Aviation

Tens of thousands fueling stations

Hundreds of millions of vehicles

Several hundred fueling stations (airports)

20,000 vehicles

Industry has unique needs, and is uniquely positioned

Sustainable biofuels must work in existing aviation infrastructure

! Meets fuel performance requirements ! Requires NO change to airplanes or engines ! Requires NO change to infrastructure ! Can be mixed or alternated with Jet-A fuel

Successful flight test program demonstrated biofuel viability

! ! ! ! Demonstrated technical feasibility Identified sustainable biofuel sources Promoted development of viable commercial markets Demonstrated diverse engine / airframe combinations

20% Coconut & Babassu Feb 2008

50% Jatropha Dec 2008

50% Algae & Jatropha Jan 2009

50% Camelina, Jatropha & Algae Jan 2009

Increasing level of test objectives

KLM takes strides in sustainable air transport Amstelveen 23 Nov, 2009

! First sustainable biofuel observer flight ! Launched SkyEnergy consortium North Sea Petroleum Spring Associates KLM Royal Dutch Airlines
This is technically feasible. We have demonstrated that it is possible. Government, industry and society at large must now join forces to ensure that we quickly gain access to a continuous supply of biofuel. KLM President & CEO Peter Hartman

Supply chain formation is beginning

Challenges for sustainable aviation biofuels

Feedstock Availability
Oilseeds

Processing
UOP-type hydrotreating

Certification
ASTM spec ???

Cellulosics

Pyrolysis/gasification /fermentation

No process for ASTM spec?

Commercial efforts underway via Sustainable Aviation Fuel User Group

GOAL: To help speed the creation of a viable market mechanism for sustainable biofuels. Members are using power of their fuel spending dollars to ensure sustainability of future aviation fuels
"Sustainability principle and monitoring in place "Technology/agronomy in place "Fuel processing technology in place "Viable feedstock and processing developers in place

www.safug.org

Ensuring a sustainable approach to aviation biofuels

The users group pledges to consider only renewable fuel sources that " Require minimal land, water and energy to produce " Minimize biodiversity impacts " Dont compete with food or fresh water resources " Provide socioeconomic value to local communities in cultivation and harvest of feedstocks

Sustainability Pledge

Things to remember
! Commercial aviation is a critical driver of economic growth and good jobs ! Boeing is committed to the environment ! Sustainable biofuels, produced at scale and at an acceptable price point, are a central element in reducing aviations GHG emissions ! Feedstock availability and cost are the major challenges ! Let a hundred flowers blossom ! Coherent and focused policy advocacy required

The Challenge
Just as employees mastered "impossible" challenges like supersonic flight, stealth, space exploration and super-efficient composite airplanes, now we must focus our spirit of innovation and our resources on reducing greenhousegas emissions in our products and operations.
W. J. McNerney Chairman, President and CEO The Boeing Company

We are committed to a better future

THANK YOU

For more info: www.boeing.com/commercial/environment

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