Airlines are under pressure to switch to alternative fuels. Photo / Supplied
Airlines are under pressure to switch to alternative fuels. Photo / Supplied
A Finnish company that hopes to make 1.5 million tonnes of sustainable aviation fuel by next year says it is well placed to power aircraft flying here.
Neste produces sustainable aviation fuel (Saf) from sustainably sourced renewable raw materials, such as used cooking oil, but is looking to use otherfeedstock, including woody waste, seen as the most promising feedstock in this country.
Sami Jauhiainen, vice president of business development, renewable aviation, said current global SAF production capacity of 100,000 tons will grow as a result of investments in Singapore and Rotterdam.
He said the firm's Singapore refinery was well positioned to serve the Asia-Pacific markets, such as New Zealand, and to support the region and the aviation industry in meeting their ambitious climate targets.
Neste is exploring investment opportunities in new technologies and new sustainable raw materials including forestry and agricultural residues, municipal solid waste, algae oil and power-to-liquids, which refers to production of fuels from renewable hydrogen and captured carbon.
"New Zealand, for example, has a strength in the availability of forestry residues, which could help attract investments in Saf production. In addition to feedstock availability, also the existence of effective regulatory frameworks, particularly mandates, is required to create certainty of a market to attract high capital expenditure investments in Saf production."
Jauhiainen said Neste was in discussions with the Government and private organisations in New Zealand.
In October 2020, Neste and Z Energy announced a partnership, introducing Neste's renewable fuels, including renewable diesel and sustainable aviation fuel into the New Zealand market.
Air New Zealand has signed a memorandum of understanding to partner with MBIE on a feasibility study for domestic production of Saf and what Government support might be needed to make that commercially feasible.
Late last year the Government announced a biofuel mandate for Saf would be developed this year, taking in work already underway.
While mandates for land transport are planned from 2023, Ministry of Business, Innovation and Employment officials recommended to Cabinet that aviation be given more time, with a regime by 2025.
Establishing production of a sustainable aviation fuel in New Zealand, or even securing reliable imported supply, requires extensive infrastructure investment at an average cost of about $1 billion, a Cabinet paper says.
Finland's Neste is already working with NZ firms and agencies. Photo / Supplied
Jauhiainen stresses Neste's Saf is produced entirely from sustainably sourced renewable raw materials, such as recycled cooking oil and animal fat waste. Palm oil is not used for the production of sustainable aviation fuel.
But drop-in fuel is three times to five times more expensive than conventional jet fuel. He said the cost of Saf is expected to come down over time, as production of sustainable aviation fuels is scaled up and supply chains become more efficient, but it is likely to remain more expensive than conventional jet fuel, driving the need for long-term regulatory frameworks to create the market for Saf.
He said sustainable aviation fuel is a drop-in product, meaning it can be used in existing aircraft and jet fuel supply infrastructure without any investments and modifications. Introducing Saf to the New Zealand jet fuel supply chain does not involve any particular technical challenges.
Currently Saf can be blended with conventional jet fuel up to 50 per cent. When blended it is American Society for Testing and Materials ASTM certified.
As of November 30 last year the Government of Finland owned directly 35.91 per cent of Neste shares, non-Finnish shareholders 39.50 per cent, Finnish institutions 17.10 per cent and retail investors hold 7.49 per cent.
