With the West Texas Crude oil price at well under $US 100 per barrel and the cross over price for aviation grade biofuels largely assigned to the $US 140-150 barrel proxy value, the announcement of a deal between Airbus and China’s Sinopec company to develop carbon neutral alternatives to kerosene might seem easy to see as being of low importance.

But it is the biggest such co-operative pact to be struck by Airbus which has similar research and development arrangements in Australia, Latin America, the Middle East and Europe.

One of the critical features of biofuel alternatives to standard fossil carbon releasing fuels for aviation or any other purposes is that they are made close to the airports, factories or locality distribution networks that require them, not shipped up to half way around the world adding substantial inefficiency and cost to the process.

Burning fuel to carry fuel is part of the ‘dismal arithmetic’ that weighs down the performance and economics of longer range airliners, and a whole lot more in the broader energy consumption picture.

China in coming decades may well become the most energy intensive economy on the planet, but its geographical and demographic density has the potential to make all its investments in alternative, sustainable and non-fossil carbon releasing forms of energy more cost effective than they could be in larger by area and less densely populated economies.

In a conversation with Airbus executive vice president of engineering Charles Champion last week he emphasised the short term variables and long term advantages of developing, certifying and securing bio-fuel alternatives that can be run through the same engines as conventional fuel, avoiding any modification costs for airlines.

However the short term consequences could be that as bio-fuels rise in availability and decline in price they may suppress price rises in traditional oil based fuels, a feed back effect that will also determine the time line for the inevitable ascendancy of alternative fuels.

This is part of the Airbus/Sinopec announcement:

China Petroleum and Chemical Corporation (Sinopec), one of China’s biggest energy companies and Airbus are developing and promoting renewable aviation fuel production for regular commercial use in China.

Sinopec is the instrumental partner in helping the Central Government to establish a Chinese airworthiness certification for alternative aviation fuels made from locally grown feedstocks.

The certified fuel known as “1# bio-jetfuel” will be produced by Sinopec using its own technology in a newly built refinery in Hangzhou (near Shanghai). The refinery is one of the few in the world that has the capacity to produce aviation fuel from biomass in large-scale.

Airbus is supporting the development of the Chinese standard with technical expertise gained in past certification processes with the European Union and US fuels standards bodies and in the selection of sustainable feedstocks.

“Bio-jetfuel is becoming increasingly important in aviation and the energy market. It will help aviation grow sustainably and demand for fuel increase. Sinopec has developed its own technology for producing aviation fuel from biomass and waste oil and has already produced aviation fuel meeting international standards. Sinopec is assisting CAAC (Civil Aviation Administration of China) in the airworthiness certification process and is proud to be collaborating with Airbus and other partners in the push for alternative aviation fuels,” said DAI Houliang, SVP of Sinopec.

In addition to fuel certification, the partners are also establishing a sustainable alternative fuel value chain in China, to help speed up its commercialisation, and will use 100 per cent domestic resources and refining capabilities.