A collaboration agreement announced Wednesday between Lufthansa and Algae.Tec Limited will create a large-scale production facility in Europe for the creation of aviation biofuels from algae. The agreement forms the foundation of a long-term partnership between the carrier and the alternative fuel producer. Lufthansa will fund the project, entirely, and Algae.Tec will manage it, retaining license fees and profits. As part of the deal, Lufthansa has also entered a long-term "offtake agreement" consisting of "at least 50 percent of the crude oil produced at an agreed price." Lufthansa was an early adopter of alternative fuels and has used them on revenue flights.
In late 2010, Lufthansa announced a six-month trial, beginning in April 2011, that would see biofuel used on revenue airline flights for the first time. That trial was partly funded by the German government. The worldwide aviation industry has carbon-neutrality targets that set 2020 for carbon-neutral growth, worldwide. By 2050, the industry hopes to have cut emissions by 50 percent versus year 2000 emissions. The Algae.Tec agreement may again put Lufthansa a step ahead of other carriers in planning for those goals. The exact location of the Lufthansa/Algae.Tec future production facility was not specifically in an early statement, which said no more than it will be "adjacent to an industrial CO2 source."