This project, dubbed GreenSky, was aiming to convert municipal solid waste into around 16m gallons of sustainable jet fuel on an annual basis. However, it is understood that the idea has now been shelved.
BA has said that the much-delayed project, for which Solena had struggled to raise the necessary finance, had been brought up short because of the current low oil price levels, which have dropped to around US$50 a barrel.
That dollar figure is critical: to make the process profitable, the companies were basing projections on a barrel price of US$70. Without that, there would be little incentive to proceed, since any cost competitiveness would have been lost.
The project actually dates back to 2010 but the US$500m venture was due to start production this year. Speaking on the matter Jonathon Counsell, Group Head of Sustainability IAG, confirmed that the unexpected dip in oil prices had been the main culprit. It appears that whilst other biofuel conversion technologies might be able to operate on a US$50 per barrel basis, Solena’s business model precluded this possibility. Part of the blame he lays at the door of the government, in particular its inaction to incentivise sustainable jet fuels in the same way as other renewable transport fuels, such as biodiesel.
On a more positive note, British Airways has stated that it remains committed to pursuing the idea of conversion of solid waste to jet fuel and to that end, it has approached other companies interested in this idea. Unfortunately, this encouraging news has been offset by the fact that Solena Fuels has now filed for bankruptcy in the US.
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GreenSky not so green
We reported recently on an interesting industry joint venture between British Airways and Solena Fuels that would see the construction of a facility near London.
