Air New Zealand is preparing to test a shipment of sustainable aviation fuel as part of a broader decarbonisation programme that includes assessments of electric and hydrogen propulsion systems for short-haul aircraft. A consignment of 1.2 million litres of neat SAF has been sourced from renewable fuels company Neste and imported to New Zealand by locally-based Z Energy to test and help develop a supply chain for imported supplies while the country continues to explore the establishment of a local SAF industry. The SAF imported to New Zealand was developed by Neste from renewable waste and residue raw materials and delivered to the Marsden Point Fuel Import Terminal, north of Auckland. After blending with conventional aviation fuel, the product will be pumped to Auckland Airport, the airline’s home hub, through existing infrastructure.

“This is a major milestone for us,” said Greg Foran, Air New Zealand’s Chief Executive Officer. “Air New Zealand is already one of the most fuel-efficient airlines in the world with our modern fleet, but the future of travel relies on low-carbon air transport. By 2030, we expect our fleet to be fuelled by 10% SAF.”  

While the first flights to use the fuel have not been announced, Air New Zealand said the initial supply would be sufficient to fuel the equivalent of about 400 roundtrip flights between Auckland and the national capital, Wellington. “While we are starting out small, it will help us to test the supply chain and understand the true cost of importing SAF into New Zealand,” said Foran. “Currently, SAF only makes up less than 1% of the global fuel supply and is around three-to-five times the cost of fossil jet fuel, so while sourcing it is a challenge, it’s one we are tackling head on.”

The Neste SAF arrived in New Zealand one year after Air New Zealand and the Ministry of Business, Innovation and Employment signed a Memorandum of Understanding to assess the feasibility of developing a local SAF facility in the country. “Commercially producing SAF in New Zealand would not only help lower the country’s emissions and provide enhanced fuel security and energy independence, it would also create jobs and economic development in the regions,” the airline said.

In addition to the SAF trial, Air New Zealand is studying new and retrofitted electric and hydrogen propulsion systems for short-range domestic operations.

The New Zealand SAF programme increases deployment of the fuel in the Asia-Pacific region, following trials or commitments in other markets, including Japan, Singapore and Malaysia, and indications that the new Australian government will also embrace SAF following its recent confirmation that it will form an advisory body similar to the UK’s Jet Zero Council. While Asia-Pacific is the largest collective air transport market, it seriously lags Europe and the US on SAF.  

Air New Zealand is continuing to engage with the New Zealand government to press for policy settings that enable the establishment of a local SAF market and help reduce the high price of the fuel, long-considered by the airline to be a major impediment to its introduction. The government will introduce a sustainable biofuels mandate in 2023 and plans to also legislate a SAF blending mandate.  

New Zealand’s Minister for Research, Science and Innovation, Dr Ayesha Verrall, welcomed the industry’s import of the first SAF shipment, acknowledged Air New Zealand’s innovation and reaffirmed the government was working with the aviation sector to explore ways of decarbonising air transport. “We need new solutions as we transition to a low-emissions economy,” said the minister. “This is why it’s encouraging to see the import of SAF. This complements our other work as the government is currently investigating the feasibility of SAF production in New Zealand. Air New Zealand’s work on SAF will also support the government’s Aerospace Strategy, recently released for consultation.”

The acquisition of SAF from Neste comes as the producer expands its Singapore refinery to produce up to 1 million tonnes of SAF per year amidst soaring global demand. The upgraded facility is due to be commissioned early next year to help supply not only the growing Asia-Pacific appetite for SAF but also demand in Europe and the US in particular, where government mandates and incentives have accelerated demand for the fuels.

“Neste has been at the forefront of accelerating the production and use of SAF,” said Sami Jauhiainen, the company’s VP APAC for Renewable Aviation. “We are proud to support Air New Zealand and the New Zealand government with the ambitious climate goals that show a great example for others to follow. With the expansion of our Singapore refinery nearing completion, and the ongoing modification of our Rotterdam refinery, we will be able to produce up to 1.5 million tons of SAF by the end of 2023, ready to support aviation globally and in the Asia-Pacific region.”

Mike Bennetts, CEO of the fuel importer Z Energy, said his company recognised and supported the need for SAF “to become the norm” in New Zealand. “We are pleased to work alongside Air New Zealand and Neste to bring this shipment of SAF into the country and recognise collaboration with others will be essential to help us decarbonise at the scale and pace needed to address climate change.”

In neighbouring Australia, the newly-elected Federal Government recently announced plans for an advisory group similar to the UK’s Jet Zero Council or Canada’s Council for Sustainable Aviation Fuels to help the airline sector achieve net zero carbon emissions. Catherine King, the Minister for Infrastructure, Transport, Regional Development and Local Government, told a Sydney forum on sustainable aviation fuels that climate inaction by the previous national government meant the new administration was now hurrying to make up lost ground. 

“We know that industry is looking to sustainable aviation fuels to play a role in emissions reductions and we know the potential for sustainable aviation fuels is significant,” said King, adding the government was keen to expedite collaboration with industry. The airline advocacy group A4ANZ (Airlines for Australia and New Zealand), which convened the SAF forum, welcomed her announcement, saying “SAF must be prioritised in our effort to reach net zero by 2050.” The key members of A4ANZ are the region’s five biggest airlines, Qantas, Jetstar, Virgin Australia, Air New Zealand and Australia’s Regional Express. Qantas, which is actively advocating for establishment of an Australian SAF industry, is using blended SAF on flights from London Heathrow and has signed a SAF offtake agreement in the US.

King said the government would produce an Aviation White Paper to examine all aspects of the industry, prioritising how to maximise aviation’s contribution to achieving net zero carbon emissions. It would also establish a specialist unit to determine how the government and the transport sector could collaborate to achieve net zero, and establish an advisory body through which ministers and industry CEOs could come together to progress low-or-no carbon flight. 

“Over recent years, industry has raced ahead of government, and I know many of you are progressing your own initiatives,” she said. “Now, we are hurrying to catch up. With transport being one of Australia’s largest sources of emissions, there is no time to waste.” Without detailing specific initiatives, she added: “We know that industry is looking to sustainable aviation fuels to play a role in emissions reductions, and we know the potential for sustainable aviation fuels is significant. We also know that governments across the world are working closely with industry to drive new innovations in sustainable fuels and sustainable aviation.”

Photo: Air New Zealand

The Asia-Pacific region, the world’s largest combined air transport market, has edged closer to lower carbon air services with significant initiatives announced in two countries, Singapore and New Zealand, reports Tony Harrington. Commencing in 2022, the Civil Aviation Authority of Singapore (CAAS) will conduct a 12-month trial of sustainable aviation fuels (SAF) at Changi International Airport with Singapore Airlines and state-owned investment company Temasek. It will also partner with Airbus on a two-year feasibility study into production, infrastructure and procedures for hydrogen-powered aircraft operations. In New Zealand, a partnership has been formed between Finnish renewable fuels company Neste and Wellington-based fuel corporation Z Energy to import sustainable aviation fuel and renewable diesel, in line with the government’s commitment to transition to a low-carbon economy. Air New Zealand and Airbus have also announced a partnership to investigate how hydrogen propulsion could be applied to the airline’s domestic operations.

Although Asia-Pacific accounts for 38% of global air journeys, it lags Europe and the US in progressing sustainable aviation. In a post-COP26 communique, the Association of Asia Pacific Airlines (AAPA), which represents 14 operators, said commercialisation of SAF was critical to reducing aviation’s emissions and government support was essential for the industry to reach net zero by 2050, which AAPA members committed to in September.

“Facilities for producing SAF are severely lacking in Asia-Pacific compared to other regions,” said AAPA’s Director General, Subhas Menon. “Taxes, onerous regulations and other penalties would only increase the cost of travel without any benefit to the environment. Conversely, government incentives and investment would contribute to the effective development of sustainable fuels and new energy sources to bolster the industry’s efforts to achieve carbon neutrality by 2050.”   

In Singapore, CAAS, Singapore Airlines and Temasek have issued a Request for Proposal, through which select, unnamed producers and suppliers have been invited to develop and implement plans to provide blended SAF. The pilot programme follows a study by the Singapore government and key industry participants to examine the operational and commercial viability of SAF at Changi Airport, one of the biggest and busiest air transport hubs in the region.

CAAS Director-General Han Kok Juan said sustainability was a key priority for the aviation industry as it recovered from the pandemic and SAF a critical enabler of decarbonisation. “The pilot, which will incorporate the blending of neat SAF in local facilities, certification of blended SAF and delivery to Changi Airport, is a significant step to operationally validate SAF integration options in Singapore. It will provide insights on end-to-end cost components, potential pricing structures for cost recovery and support future policy considerations for SAF deployment,” he said. The announcement of the Singapore SAF trial coincided with the release at the COP26 summit of the SAF Policy Toolkit, developed by the World Economic Forum’s Clean Skies for Tomorrow SAF Ambassador’s Group, of which Singapore is a member (see article).

On the study with Airbus that will look at demand for and production of alternative aviation fuels, Han said recovery from Covid-19 “will not be a return to business-as-usual but an opportunity to rebuild an aviation sector that is more sustainable. It is not a question of whether, but of how, to make flying greener and developing concrete pathways to achieve that goal while ensuring that air travel is still accessible.”

Sabine Klauke, Chief Technical Officer, Airbus, added: “The decarbonisation of our industry requires a combination of approaches, hydrogen being one of them, and will need unprecedented cross-sector collaboration to create the new aviation infrastructure ecosystem. We are therefore pleased to have CAAS as a partner, as we embark on this exciting journey.”

The CAAS-Airbus partnership initially will consider the technical feasibility of an airport hydrogen hub and infrastructure to support operations by hydrogen-powered aircraft, including the production, storage and distribution of hydrogen, ground services for aircraft, logistical equipment and refuelling systems. In addition to provision of hydrogen, the study will consider how alternative fuels could be integrated into airport developments, either from the start or progressively as technology evolved.

In New Zealand, Z Energy has partnered with Neste to import sustainable fuels. Earlier this year, as part of a broader decarbonisation strategy, the government announced it was considering SAF blending mandates, a policy already being rolled out in Europe to boost demand for SAF to levels that supported commercial production. Z Energy is a major provider of fuel in New Zealand, supplying airlines, shipping, road transport and industry. It owns and operates pipelines, terminals and bulk storage infrastructure, supplies over 200 auto fuel retailers, and owns 15.4% of Refining NZ, the country’s only oil refinery. Together with Air New Zealand, Z Energy is a strong advocate of local SAF production.

Sami Jauhiainen, Neste’s VP Business Development, Renewable Aviation, said collaboration with Z Energy was designed to grow the availability of SAF and renewable diesel in New Zealand, and to support the country’s emission reduction targets. “While the market for SAF is today more mature in Europe and North America, where regulatory frameworks create a growing market, we expect the Asia-Pacific region to follow on that path sooner rather than later,” said Jauhiainen, who in January will transfer to Singapore to take up the new role of VP Asia Pacific for Neste Renewable Aviation. The company has also announced it will open an Asia-Pacific Research and Development Centre in Singapore, to undertake advanced analytical and raw material research with partners in Singapore and across the APAC region.

Virgin Australia CEO Jayne Hrdlicka has expressed confidence investors and global SAF providers would also focus on Australia, once appropriate policy settings were in place. She told the recent IATA SAF Symposium: “We need government support to ensure the seed capital that’s needed and the funding to get up to scale is there and available, along with the tax offsets needed to motivate that investment cycle. We’re doing our bit with the Australian government to find solutions to get the ball rolling.

“We see great things happening in the US, and we’re really buoyed by that because we think some of the first mover investments that have been made elsewhere in the world will also increase the odds of success in Australia. Then the costs of experimentation and innovation are a bit lower and we can partner with others to make headway more quickly that we’d otherwise be able to do. We have to do that with support from other stakeholders, including government.

“When that curve starts to move in the right direction, all those first movers are going to be looking at the opportunities that exist globally but haven’t yet been delivered. I would fully expect that we would have companies arriving here who want to leverage the technology and capabilities that they have elsewhere, knowing that they have got a ready market for the output and hungry to just take in the opportunity.”

Earlier this year, Virgin’s rival Qantas announced a partnership with BP to explore opportunities to establish a SAF industry in Australia.

“Even though we have been flying a lot less, we’ve actually seen the same proportion of customers choosing to offset their domestic travel during the pandemic – showing that this issue remains top of mind for people,” said Andrew Parker, Qantas Group Executive Government, Industry and Sustainability. “Airlines globally have a responsibility to cut emissions and combat climate change, particularly once travel demand starts to return. The Qantas Group has set some ambitious targets to be net carbon neutral by 2050, and while offsetting emissions is a big part of that in the next few years, longer term initiatives like building a SAF sector in Australia are key.”

Photo: Singapore’s Changi Airport (© Changi Airport Group)

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