By KAVERI NITHTHYANANTHAN Source: Wall Street Journal

LONDON—Deutsche Lufthansa AG Friday became the first airline to use biofuel for a regularly scheduled commercial flight, as part of a 1,200-flight program, as it looks to cut its carbon emissions by making biofuel use routine.

“It’s the starting point of environmentally friendly flying,” said Lufthansa’s head of aviation biofuel, Joachim Buse, on board the first flight from Hamburg to Frankfurt, which itself will save one ton of carbon dioxide. “It’s a clear signal that the aviation industry is taking steps to mitigate against climate change.”

While many airlines, including Continental Airlines, Virgin Atlantic, Air France-KLM and Qatar Airways have flown test flights with biofuel, Lufthansa is the first to use biofuel on a regular commercial route.

Airlines contribute 2% of carbon emissions world-wide, and the body representing 230 airlines, the International Air Transport Association, has set the industry a goal of reducing carbon-dioxide emissions by half by 2050.

The Lufthansa A321 used a blend of 50% renewable jet fuel and 50% fossil-based jet fuel in the right engine, while the left engine used conventional jet fuel.

Aviation biofuel is made from plants such as jatropha, halophytes and camelina, or from waste material such as used cooking oil or animal fat, whereas normal jet fuel is made from non-renewable fossil fuel.

Lufthansa emphasized that no agricultural land needed for food production was being use to produce biofuel for the plane.

“Food comes first, then fuel,” Lufthansa board member Kay Kratky said. “We share this concern and we therefore trace the origin of any raw materials we buy and the conditions under which they are produced.”

The six-month trial will assess the effects of biofuel on maintenance and engines.

The start of the €6.6 million ($9.3 million) trial was delayed from April while Lufthansa waited for authorities to conduct low-temperature tests that would finally allow the fuel to be licensed. Competition issues have also proved an obstacle and prevented airlines from working more closely together during this research phase, but there could be opportunities ahead under the Star Alliance banner, Mr. Buse said.

Lufthansa expects carbon-dioxide emissions to be reduced by some 1,500 metric tons over the course of the six months.

The use of biofuel has the potential to lower aviation emissions by up to 80%. It is also lighter than conventional fuel and is 2% more energy efficient so airlines could opt to either carry less fuel or more passengers. But it is currently more expensive.

Elsewhere, Europe’s largest tour operator, TUI Travel PLC, will use cooking oil-derived biofuel on a passenger flight of its Thomson Airways on July 28 from Birmingham, U.K., to Palma, Majorca. Thomson is the U.K.’s third-largest airline by passengers behind easyJet PLC and British Airways.

TUI Travel said biofuels can cost five to six times conventional jet fuel, and TUI Travel Chief Executive Peter Long said “there is need to look at ways to incentivize investment” and build infrastructure to expand biofuel use.

Both airlines are forging ahead in the hope more airlines will look to adopt the fuel, a move that will encourage suppliers to enter and make the fuel financially viable.

There are some incentives. The Emissions Trading Scheme comes into effect in 2012 and if airlines can prove that the biofuel reduces carbon dioxide by 35%, they will be awarded carbon credits, Mr. Buse said.

The EU’s trading scheme is a market-based approach to controlling pollution and sets a limit on the amount of carbon dioxide that is being produced. The inclusion of the aviation sector will see airlines purchase carbon credits as a means to offsetting their emissions.

Thomson’s biofuel is supplied by Dutch-based company SkyNRG, while Lufthansa’s is being provided by Neste Oil.

Meanwhile, British Airways, which is a unit of International Consolidated Airlines Group SA, has partnered with Solena Group to establish Europe’s first sustainable jet-fuel plants and plans to use low carbon fuel that’s derived from waste to power part of its fleet from 2015.