Mumbai: India’s second largest airline by passengers carried, Kingfisher Airlines Ltd, has signed an agreement with three international firms to explore development and production of an alternative jet fuel to reduce carbon emissions.

Power backup: Kingfisher Airlines chairman Vijay Mallya. Pankaj Nangia / Bloomberg

Regular jet fuel or aviation turbine fuel (ATF), a colourless refined kerosene, accounts for up to 40% of the total operating cost of airlines in India.

“We have already signed up with three companies to develop the biofuel. We are working on the cost-benefit analysis for the project," said a senior Kingfisher Airlines executive who did not want to be identified as he is not authorized to speak to the media.

He did not disclose the names or details of the international companies that will develop the bio jet fuel for his carrier. If the experiment succeeds, the airline will be able to reduce its dependence on high-cost ATF and pare its carbon footprint or greenhouse gas (GHG) emissions.

Rival carrier and the country’s largest airline Jet Airways (India) Ltd said it is closely monitoring global research and development (R&D) into alternative fuels while national carrier Air India is not immediately looking at bio jet fuel, but is reducing carbon emissions through various operational techniques.

In an unrelated development, European Aeronautic Defence and Space Co. NV (EADS), the parent company of aircraft manufacturer Airbus SAS, is in talks with a few Indian biotech firms to explore joint partnerships in biofuels.

Jean Botti, chief technology officer at EADS, had told Mint in December his company is talking to some institutions in India but declined to name them.

Green craft: A February 2008 photo of a Virgin Atlantic Boeing 747 plane that was partially powered by biofuel derived from a mix of babassu and coconut oil, a first for commercial aircraft. Gill Allen / Bloomberg

Many international carriers have been in talks with specialized firms that are developing alternative jet fuel using renewable oils including those derived from agriculture, algae, animal fat and waste greases.

On 15 December, 15 international airlines including American Airlines Inc., Delta Air Lines Inc. and Deutsche Lufthansa AG signed a pact with AltAir Fuels Llc and Rentech Inc. for the supply of alternative aviation fuel by 2012.

Indian carriers, however, have not reached such a stage as yet.

AltAir Fuels, set up in 2008 to develop projects for the production of jet fuel from renewable and sustainable oils, said there is no specific interest from Indian carriers.

Julie Dawoodjee, vice-president, investor relations and communications at Rentech would only say that members of the International Air Transport Association, or Iata, have expressed interest in alternative aviation fuels and the association would like its 230 member carriers to use 10% alternative fuels by 2017.

Air India, Jet Airways, JetLite (India) Ltd and Kingfisher Airlines are members of Iata.

Sanjay Agarwal, chief executive officer of Delhi-based low-fare carrier SpiceJet Ltd, said developing alternative fuel is “not a priority as of now" for his carrier.

Another executive of a private airline, who did want to be named, has reservations about bio fuels as the cost could be more than that of ATF.

In February 2008, a Virgin Atlantic Airways Ltd Boeing 747 jumbo jet flew between London and Amsterdam using a fuel made from coconuts and Brazilian babassu nuts.

European plane maker Airbus, too, experimented with an alternative fuel made of a synthetic mix of gas-to-liquid for its A380, the world’s largest civilian plane.

Kingfisher Airlines has placed orders for five Airbus A380 planes, to be delivered in 2014.

In an email response to Mint’s query, John Williams, at Scoville Public Relations, a consulting firm for AltAir Fuels, said on Thursday: “The company projects that it can produce renewable jet fuel for approximately $2.50 (Rs117) per gallon beginning in 2012. It’s unknown at this time...what petroleum-based jet fuel will cost in 2012. Also unknown is whether or not, and what additional cost may be put upon petroleum jet fuel in the form of carbon emissions tax."

“The company believes it will be able to make its bio jet fuel price competitive with petroleum fuel in either case," Williams said. “The facility is projected to begin producing the bio jet fuel in late 2012."

According to Rentech’s Dawoodjee, even though the bio fuel price is expected to be competitive with traditional jet fuel, her company is working on a pricing mechanism to protect the carriers from extreme crude price volatility.

Jet Airways, though clarifying that it has no plans for forming alliances for carbon emissions, said it has a very young fleet of aircraft—with an average fleet age of approximately 4.5 years—making it one of the most emission-friendly airlines in the region.

“In the meantime, Jet Airways’ carbon emission monitoring plan has been accepted by EU (European Union) for our flights into EU states," a Jet spokesperson said in an email.

Air India is not looking for alternative fuels but is reducing the usage of ATF. It has registered a 12.5% reduction in fuel consumption in 2008-09 from 2007-08.

This could be possible through changes in operational techniques, equipment settings and use, fuel management, flight planning, engine maintenance, cabin weight management, etc., an Air India statement said.

“Every sector is responsible for reducing its share of carbon emissions in the fight against climate change. The aviation industry is expanding rapidly in part due to regulatory and taxing policies that do not reflect the true environmental costs of flying," Ankur Toby Ganguly, communications manager at Greenpeace India, told Mint.

“Alternative jet fuel, if it helps in reducing the carbon footprint of a flying aircraft, is a welcome step," he said. “Passengers flying more due to ‘cheap fares’ or due to the fact that alternative jet fuel has reduced carbon emissions, could result in increased gross GHG (greenhouse gas) emissions from the aviation sector. This would be more detrimental to the climate."

According to Greenpeace, a non-government organization that lobbies for the protection and conservation of the environment, the aviation sector accounts for at least 4% of total GHG emissions globally.

But Iata, whose members account for 93% of scheduled international air traffic, said aviation is responsible for 2% of global manmade carbon dioxide emissions. It has committed to 50% reduction in carbon emissions by 2050.

Reduction in carbon emission is becoming increasingly important as the European Union Trading Scheme (ETS) has mandated that all flights with their origin or destination in the EU have to be covered by the scheme.