Business Aviation Law Blog

Congressional Budget Decision Threatens Growth of Aviation Biofuels Market

The Department of Defense has determined that reducing the military’s dependence on foreign petroleum products is critically important to national security. As mentioned in an earlier post, to meet this target, the United States Navy procured the largest order of algae and animal oil fat based biofuel in the federal government’s history, which the Navy planned to use to power its newly created “Green Strike Group.” Now, a congressional budget decision threatens that goal.

The House of Representatives passed the 2013 National Defense Authorization Act last month, which among other provisions, prevents the Department of Defense from purchasing alternative biofuels that are more expensive than traditional fossil fuels. A draft of the Senate’s version of the Act was recently released by the Armed Services Committee with the same prohibition.

Industry leaders had hoped that the Navy’s substantial procurement of biofuel would enable the new fuel source to be proven on a commercial scale, thus increasing the pace of research and development, expanding the market, and eventually reducing the fuel’s overall cost. These hopes may be dashed, however, if this act becomes law. Without large-scale military investment in the market, this new technology’s future use in other industries - such as the civilian business and commercial aviation industry – has become more uncertain.     

Special thanks to Sullivan & Worcester’s Noah Tomares, Environmental and Marketing Intern, for assistance in preparing this post.

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