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Strong Opportunity for Midwest Aviation Biofuels Industry

Report from Midwest Aviation Sustainable Biofuels Initiative (MASBI) Shows Demand for New Fuel Sources, Recommends Actions, Highlights Economic Benefits

Chicago, June 27, 2013 — United Airlines (NYSE: UAL), Boeing (NYSE: BA), Honeywell’s UOP, the Chicago Department of Aviation and the Clean Energy Trust today announced the formation of the Midwest Aviation Sustainable Biofuels Initiative (MASBI), designed to advance aviation biofuel development in a 12-state region holding significant promise for biomass feedstock, technology development, job creation and sustainable commercialization. MASBI will deliver a comprehensive evaluation of the region’s biofuel potential and a plan to support regional and national needs in a responsible manner.

The commercial aviation industry has a clear path toward cleaner, more economical and more secure energy alternatives through the increased use of advanced biofuels developed in the Midwest, according to a report issued today by the Midwest Aviation Sustainable Biofuels Initiative (MASBI).

MASBI produced the report following a yearlong analysis of the benefits that could be delivered from a robust sustainable aviation biofuels industry in the Midwest. MASBI is a coalition led by United Airlines, Boeing, Honeywell’s UOP, the Chicago Department of Aviation and the Clean Energy Trust, along with an Advisory Council of more than 40 public and private organizations, chaired by Argonne National Laboratory. MASBI strategy and program management support was provided by Oliver Wyman, a global leader in management consulting with recognized expertise in energy and aviation. In addition to endorsing the report’s recommendations, several individual MASBI members made new commitments to help secure a robust future for biofuels.

Noting the progress made in developing biofuels, including its use on more than 1,500 commercial aviation flights globally, the coalition agreed that more must be done to achieve the sustainable production of commercial-scale and cost-competitive advanced biofuels from sources such as non-food crops and waste products.

MASBI issued its report at a summit of aviation and energy experts, biofuel developers, environmental organizations, government officials and research institutions. The recommendations include:

1. Streamline the approval process for new biofuel production methods;
2. Level the policy playing field for advanced biofuels with the conventional petroleum industry;
3. Tailor agriculture products such as oil-seed crops for jet-fuel production;
4. Improve biofuel production through agricultural innovation; and
5. Pursue deal structures that balance risk and reward for early adopters of technology.

“We’ve been developing a new industry – one that has the ability to reduce carbon emissions, create green jobs, drive innovation in clean technology and bolster the successful future of the airline industry which is vital to communities all around the world,” said Jimmy Samartzis, managing director of global environmental affairs and sustainability for United Airlines. “We need to focus on this today, so that we can have these options tomorrow as we build a more sustainable future.”

Expanding the availability of sustainable aviation biofuels will have clear business benefits for the airline industry and the broader Midwest economy. From 1990 to 2012, fuel costs increased by 574 percent and are now the single largest expense for commercial aviation, accounting for up to 40 percent of an airline’s operating budget.

Commercial aviation spends $6.3 billion on jet fuel a year for flights originating in the Midwest. MASBI estimates that replacing five percent of petroleum jet fuel in the Midwest with aviation biofuel would create more than 3,600 jobs and reduce carbon-dioxide emissions by 700,000 tons.

“The Midwest can be a leader in this effort because it boasts the experience, technological innovation, and resources to do so,” says Samartzis. “The impact of MASBI goes well beyond the Midwest and influences the development of the advanced biofuels industry nationally and globally.”

Visit www.masbi.org to download the full report and executive summary. Additional public statements from several MASBI members can be found on the final page of this document.

In addition to supporting the recommendations in today’s report, several MASBI stakeholders announced commitments in support of aviation biofuel development:

• The Chicago Department of Aviation and United Airlines signed a Memorandum of Understanding to initiate a cooperative effort towards identifying opportunities to develop advanced alternative fuels for aviation use with a particular focus on converting waste streams in the Chicago area into lower-carbon aviation fuel.
• Honeywell’s UOP, United Airlines and Boeing will provide funding for Purdue University to research ways to convert corn stover – leaves and stalks left in fields after the corn harvest – into jet fuel. The companies’ funding supports existing research and development funding from the Indiana Corn Marketing Council and Iowa Corn Growers Association.
• United Airlines will issue a Request for Proposal for the development and purchase of cost-competitive, sustainable, renewable jet fuel and renewable diesel to supply one of United’s hub locations. Using guidelines and technical requirements presented by MASBI Advisory Council member Commercial Aviation Alternative Fuels Initiative (CAAFI), the intent is to emphasize market demand, spur innovative approaches to partnership across the value chain, and obtain delivery of renewable fuel to be used in daily operations.
• The Clean Energy Trust (CET) will mobilize its existing innovation and advocacy platform to prioritize advanced biofuels in its funding strategies and local and federal policy work. Over the next six to eight months, CET will advocate for supportive policies which will build upon the MASBI recommendations.
• With the support of Boeing, United Airlines, and Honeywell’s UOP, the Clean Energy Trust’s Clean Energy Challenge will fund and develop a prize directed towards advanced biofuels projects in the Midwest. The Clean Energy Challenge has been a catalyst in jump-starting innovation within the Midwest by allowing clean energy entrepreneurs at varying stages of development to compete for funding and to receive other resources for growth, improving their chances of success.

Additional Public Statements from MASBI Members

“Sustainable aviation biofuel plays a crucial role in the commercial aviation industry’s strategy to achieve carbon-neutral growth from 2020. This alternative energy source is good business too; many of our customers conduct flights using biofuel and want to incorporate sustainable aviation biofuel into their operations on a regular basis.”
- Billy Glover, vice president of market strategy for Boeing Commercial Airplanes

“Our airports can be a catalyst, facilitator and an advocate for this critical new biofuel technology. Working with private industry, academic institutions and non-profits, the public sector provides an important voice in the policy dialogue relating to biofuels and aircraft emissions.”
- Rosemarie S. Andolino, commissioner for Chicago Department of Aviation

“The environmental and economic benefits of biofuels depend on equitable, supportive tax policies. Those policies will create stability and predictability, leading to long-term capital investment in the industry by private investors.”
- Amy Francetic, executive director for Clean Energy Trust

“Having supplied fuel for more than 100 military and commercial flights, Honeywell’s UOP has seen increasing interest in biofuel among the aviation industry. We look forward to continuing to promote the viability of advanced biofuel as a way to reduce stress on the environment and dependence on crude.”
- Jim Rekoske, vice president and general manager for Honeywell’s UOP Renewable Energy and Chemicals business unit

“The same cooperation and shared sense of purpose that produced MASBI’s recommendations are a hopeful sign that parties across the aviation fuel supply chain can produce a thriving biofuels industry. We will continue to provide subject matter expertise in technology analysis, sustainability factors and the status of federal policy as part of our role in building a better energy future.”
- Seth Snyder, biofuels technology manager and section leader for Argonne National Laboratory

About the Midwest Aviation Sustainable Biofuels Initiative

The Midwest Aviation Sustainable Biofuels Initiative (MASBI) brings together partners from across the value chain to promote the development and use of biofuels. Its Steering Committee is comprised of the following founding members – United Airlines, Boeing, Honeywell’s UOP, the Chicago Department of Aviation and the Clean Energy Trust. To learn more about MASBI, visit www.masbi.org.

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