A trans-Tasman alliance is calling on the government to partner with the private sector to accelerate the use of biofuels by the aviation sector.
The report suggests that governments should consider co-financing domestic biofuel production plants. Photo: 123RF
A new report from the Sustainable Aviation Fuels Alliance of Australia and New Zealand (SAFAANZ), whose members include Air New Zealand, Z Energy and the Bioenergy Association of NZ (BANZ), is recommending that both countries should establish a "jet council".
This would be a collaboration between private sector stakeholders in the aviation industry and government officials on both sides of the Tasman to subsidise the development of sustainable aviation fuel (SAF) and its use.
SAFs are derived from a biomass, which can consist of animal waste, forest residues, rubbish and other organic materials. Biochemical processes are commonly used to produce SAF from alcohol molecules derived from sugar/starch bearing plants.
The most attractive biofuels are so-called "drop-in" fuels, meaning they can be dropped-into an existing petroleum distribution network or mixed-in with fossil fuels without the need for a complete overhaul of the technology involved.
BANZ executive officer Brian Cox said "drop-in" SAFs were being used by several overseas airlines, that had an arrangement with a supplier, but there was limited use in Australasia because SAFs were more expensive than fossil fuels.
"We need to have involvement from the government on this, there is a price gap that needs to be bridged, we need to work collectively."
The report suggests that governments should consider co-financing domestic biofuel production plants and other possible incentives to accelerate the uptake of SAFs by airlines.
"If we wish to go and reduce [New Zealand's] emissions faster than we currently are then there are avenues like this that are available, can be done, but they do need us as a community to say 'yes, we are prepared to pay the cost'," Cox said.
He said he would like biofuels to be prioritised in the same way that electric vehicles were.
The government announced the introduction of a biofuels mandate last year. It meant that from 2023 fuel wholesalers would have to cut their total greenhouse gas emissions by selling biofuels - by 1 percent in 2023, 2.4 percent in 2024, and 3.5 percent in 2025.
However, previous reporting from RNZ found that a shift to wider use of biofuels was forecast to raise petrol and diesel prices and knock up to $1 billion off the country's economic growth.
It referred to government and independent reports which suggest that biofuels would have to imported until at least 2035 because the cost of producing it domestically would cost a billion dollars by 2031.
It warned fuel prices could increase due to the high cost of importing biofuels for retailers which would reduce the purchasing power of households.