By 2030, The Boeing Company (BA) plans to have aircraft powered by 100 percent biofuels. A global effort to minimize carbon emissions by 50 percent by 2050 is entering the company. To accomplish this aim, Boeing would only have to turn its entire line of airliners to alternative fuels over the next 10 years, as the aircraft’s projected life is 20 years. The fleet that will be created from 2030 will last at least until the middle of this century.
The comments made by Boeing indicate that the company is willing to compete for the concerns of customers, especially the European and Japanese industries, where there are heavy environmental constraints. And this is not merely a pollution control project: Boeing already has a promising proposal to fly commercial biofuel aircraft (used vegetable oil). We are talking about the freight flights of the 777 model requested by FedEx, which was carried out back in 2018.
Boeing finds that the key disadvantage of the introduction of biofuels in aviation is tight regulation: in most countries, safety requirements do not allow filling tanks with 100% alternative fuel. The overall threshold is 50%. That is, a combination of biofuels and classic kerosene derived from oil has to be used today. Boeing is willing to invest in the production of aircraft systems that can operate on alternative fuels if the restrictions are lifted. There are no statistics for the sum of this investment.
The comments on the transition to biofuels are a good publicity tactic, in our view. Aviation is not a big atmospheric polluter, it accounts for just 2 percent of the world’s carbon emissions, and it would not make much impact in this respect by burning hydrocarbons extracted from vegetable raw materials instead of crude. Moreover, the production of renewable fuels worldwide is only a quarter smaller than that of jet fuel consumption, and can theoretically be substituted. The switch to biofuels, however, would potentially help Boeing to respond to the environmental trend, increase demand from ESG funds (with an environmental filter), increase investment supply, and, as a result, enable Airbus and other global players to compete more effectively.
The Boeing Company (BA) shares have stopped falling since the beginning of January, amid the rise in the prevalence of diseases in Europe and the United States, as well as recent lockdowns. A growth turnaround is very possible, which will push the shares to the December level of $230-240 within 2-4 weeks. On this horizon, the growth rate is up to 18 percent greater than current prices.