As aircraft are bound (still) to a liquid fuel (it has the most energy content per weight) alternative resources need to be converted into liquid fuels. The industry needs to consider which source is the best for biofuel, it needs to be relatively easy to 'harvest' compared to fossil fuel, with no impact on human food or water supply whatsoever and must be environmentally friendly.
Aircraft engines still cannot run on water but, indirectly, this water can be and is a source of algae. And these algae have a high yield compared to other biomass sources which makes them very interesting to the energy industry. A big advantage of many biofuels over 'normal' fuel types is that they are biodegradable, and if spilled harmless to the environment.
In July 2010 the FAA has tested Swift Enterprises biofuel in a Lycoming engine, below the test report.
Document DOT/FAA/AR-10/13 from the FAA
Excerpt from the document:
Researchers at the Federal Aviation Administration William J. Hughes Technical Center Aviation Fuel and Engine Test Facility (AFETF) entered a Cooperative Research and Development Agreement (CRDA) with Swift Enterprises. Swift has plans to produce a high-octane, nonoxygenated, binary fuel from biomass for spark ignition, piston aircraft engines.
Due to the binary nature of the fuel and the use of heavy aromatics, the Swift fuel will require engine and airframe testing to determine the performance effects of noncompliance with the current aviation gasoline specification properties regarding distillation slope
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