The airline has imported limited amounts of sustainable aviation fuel, which is three to five times the price of fossil fuel. Photo: AFP
Air New Zealand and the government are lifting efforts to prove the feasibility of the local production of sustainable aviation fuel (SAF).
Two firms which put up initial proposals for SAF production have been selected to take the plans to the next stage, with the airline and the government putting up a combined $2.26 million to fund the work.
SAF is made from forestry residues, municipal waste, or used cooking oils. It results in a significantly lower greenhouse gas component and can be used in current airplane fuel systems.
Air New Zealand's chief sustainability officer Kiri Hannifin said the cleaner fuel would be important in reducing emissions and would offer other benefits.
"Globally, SAF is in very high demand but [there is] limited supply. Commercially producing SAF in New Zealand would not only help lower the country's emissions while creating jobs, regional economic development, and Māori and iwi investment opportunities, but also provide energy security and energy independence which is something New Zealand doesn't have."
The two US-based companies selected - LanzaJet and Fulcrum BioEnergy - will now work through to early 2024 on the technical, economic, supply chain, and environmental feasibility of establishing and operating a SAF production facility in New Zealand.
The airline has imported limited amounts of SAF, which is three to five times the price of fossil fuel, and has said it is aiming for SAF to make up about 10 percent of its fuel usage by 2030.