New Zealand needs sustainable aviation fuel industry to fly into the future or it will be left behind

Airlines are racing to cut carbon emissions as more countries impose rules on the use of sustainable aviation fuel. Photo / Dean Purcell

Air New Zealand’s sustainability chief says this country risks being left behind if it doesn’t develop a sustainable aviation fuel industry.

Kiri Hannifin says Government support is critical to develop the industry, which could be requirements for a minimum content of sustainable aviation fuel (Saf) as is happening in other countries.

She also says other countries are funding Saf projects directly.

Austalia’s government has announced a A$14.1 million ($15.5m) boost to two projects in an industry it says could support 7300 jobs by the end of the decade.

Other countries including Japan, Singapore, Canada, Britain and the nations of the European Union are imposing mandates requiring a minimum percentage of Saf, now made from used oils, animal fats and municipal waste, to be used by airlines by the end of the decade.

The proportion of Saf required ranges from 3% to 10% and will apply to all aircraft operating in those countries, including those flown by Air New Zealand.

The imposition of mandates is seen as critical to encourage energy companies to invest in new refineries.

“Looking around the world, in Asia-Pacific, and to the countries we fly to, the primary action being taken to grow the supply of Saf globally is via policy support, which signals long-term demand. This stimulates supply and more supply options will help manage costs. Currently, most policy support we see globally includes mandates, which are typically a small but gradually rising requirement for a proportion of Saf to be blended into the existing jet fuel supply system,” Hannifin said.

But when asked about mandates, Energy Minister Simeon Brown said before Christmas there were no plans to introduce them here.

The Government wants to enable Saf and work with the sector to remove practical barriers for its uptake.

“The Government has no plans to be mandating its use, particularly as this will make aviation more expensive for passengers and freight,” Brown told the Herald last week.

Neste has a large sustainable aviation fuel refinery in Singapore. Photo / Supplied

He said the Government was “fuel agnostic” and this applied to aviation fuels.

Earlier this month the Government released documents supporting the development of large-scale manufacturing of hydrogen made with renewable energy. It wants to break down barriers and make it easier for large-scale investment in plants.

Hydrogen is being trialled overseas to use directly in aircraft or in hybrid planes. It is also a key ingredient in synthetic Saf that is now being made in small quantities overseas, dropping directly into aircraft engines.

Air New Zealand - one of the country’s biggest polluters if emissions overseas are counted - is interested in synthetic Saf now being made by New York-based Air Company which has ambitions to step up its own production and licence its propriety technology in other countries. The airline will also run a battery plane trial next year.

Hannifin said she welcomed the minister’s commitment to working with the aviation sector to enable Saf and remove barriers to its uptake. But she wants to see action.

“We’d encourage the Government to get formal consultation underway with industry on how we can best achieve this outcome in, and for, New Zealand.”

She said that as in Australia a Saf industry - using wood was such as forestry slash - could boost employment in regional New Zealand.

While the price of Saf ranges between two and five times that of traditional fuel, the industry would benefit from economies of scale and the price would fall if big refiners were encouraged by guaranteed demand from airlines.

In November, Air New Zealand and LanzaJet released the preliminary findings from a study into using woody waste residues and low-value wood products in New Zealand to make sustainable aviation fuel (Saf) by producing ethanol.

Kiri Hannifin, Air NZ chief sustainability and corporate affairs officer. Photo / Dean Purcell

Domestic production could initially reach 102 million litres of unblended Saf and 11 million litres of renewable diesel each year.

It has found that locally produced Saf could meet up to a quarter of the aviation fuel needed for domestic flights a year. The study found that using domestically grown woody waste for Saf has the potential to contribute hundreds of millions of dollars to New Zealand’s economy a year and create hundreds of new jobs.

The study finds “significant investment” in infrastructure will be needed to achieve this and mandates requiring minimal use of it in planes would be critical to getting the industry off the ground.

Hannifin said Saf still represented the best way of cutting emissions, crucial for Air NZ and other airlines operating some of the longest flights in the world to and from this country.

“That’s why we’re so focused on it and so keen to get an industry up and going here and get some support from Government to help New Zealand do what it needs to do.”

There was growing pushback to flying in Europe (where some routes are being replaced by trains) and while there was no sign Europeans were avoiding New Zealand because of environmental concerns, there was a risk they may in the future as concerns grew about carbon emissions for aircraft, now responsible for about 2% to 3% of total emissions.

“We’re very cognisant of needing to address it quickly so that we don’t put off travellers from Europe or North America.”

They could instead choose other destinations for a lower carbon footprint.

Brendan Drury, managing director of Orbit World Travel, told the Herald there is growing awareness of sustainability.

“In 2019, just 10% of Orbit customers were monitoring travel sustainability. This year, that figure has grown to over 60%, and is expected to climb further,” he said.

“Sustainability is now a key factor when selecting suppliers, with many organisations prioritising those offering tangible environmental benefits.“

Tourism Holdings chief executive Grant Webster doesn’t think visitors flying long-haul were too concerned about their carbon footprint yet and said the country should invest in Saf, as appropriate.

“The reality is the big movements in technology and Saf production are probably going to come from the large markets in the world, we can’t afford to be at the front. So long as we are in touch with what is happening and are adaptive as the opportunities arise we will stay relevant to the key markets like Europe.”

Customers today, including the most avid sustainability advocates, tended to “suspend their beliefs somewhat” when it came to travel and tourism.

“Just like we may exercise less or eat poorly on holiday, so too do our sustainability actions diminish. We are far from a tipping point yet where this is a serious volume concern.”

Saf is almost chemically identical to fossil jet fuel and has the same emissions when burnt in an aircraft, but has significantly lower emissions than fossil jet fuel over the full life cycle of the fuel, from raw material production to combustion.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.