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GERMAN airline Lufthansa has signed a deal with Algae.Tec to build an industrial-scale aviation biofuels plant.

The plant will produce crude algal oil for conversion into jet fuel and biodiesel. Under the agreement, Lufthansa will provide the funding to build the plant and agree to purchase at least 50% of the oil produced for a set period of time. Algae.Tec will manage the project and receive licence fees and profits.

The plant’s location has yet to be agreed, but it will be in Europe and adjacent to an industrial source of carbon dioxide, which is needed for algae growth. The size and cost of this project has not been revealed, but in August, Algae.Tec chairman Roger Stroud said that a commercial-scale facility using its technology would cost A$80–120m (US$84–126m).

Algae.Tec’s enclosed McConchie-Stroud system has been recognised for its low use of water and land. Old 40 ft (12.2 m) shipping containers are converted into photobioreactors, which are attached to solar light capture arrays. Carbon dioxide captured from power stations or manufacturing facilities is pumped through the reactors. 500 modules could produce 125,000 t/y of algae and capture 250,000 t/y of carbon dioxide emissions. The cost of the oil is less than A$40/bbl.

Lufthansa is not the first airline to seek alternative sources of aviation fuel. In May, US airline Delta bought the Trainer refinery in Pennsylvania, US, for US$150m and will spend a further US$100m to maximise jet fuel production. It hopes to minimise the impact of rising kerosene prices.