Business NZ Energy Council executive director Tina Schirr.
Work continues in New Zealand onwhat could be the cheapest way of decarbonising aviation.
Synthetic hydrogen is one option for airlines, and while expensive to make now it could be a long-term solution to not only power aircraft but be part of building up the country’s energy resilience.
Marsden Point fuel terminal operator Channel Infrastructure (CHI), and Fortescue Future Industries (FFI) are looking at the development of a green hydrogen manufacturing facility in Northland.
They say it could produce synthetic Sustainable Aviation Fuel (e-Saf) that could supply around 60 million litres a year – equivalent to more than 3 per cent of the pre-Covid annual jet fuel requirements for the aviation sector in New Zealand.
While Air New Zealand is also looking at battery technology for small regional flights and traditional Saf for long-haul flights, hydrogen is an option.
The airline’s chief sustainability officer, Kiri Hannifin, says hydrogen will be important for the whole of the economy to decarbonise but it is very intensive to make.
‘’You need a lot of energy to make green hydrogen so we need a bigger, broader grid.’’
Business NZ Energy Council executive director Tina Schirr says the development of green hydrogen could solve problems across the energy sector.
New Zealand has a high share of renewable energy in its national grid, which enables realistic decarbonisation using green hydrogen.
Once the current projects under construction are commissioned, the country will have 90 per cent renewable electricity.
“This places us in an ideal space to enable green hydrogen projects, domestically and for export,” Schirr says.
The role for hydrogen domestically is in the hard-to-abate sectors – aviation fuels, shipping fuels, heavy transport, fertiliser production and potentially “green” steel/aluminium. “It’s not a question of electricity or hydrogen, we need both. We should electrify everything we possibly can and let hydrogen and other fuels do a great option for the things we can’t directly electrify and where batteries are not viable.”
Schirr says aviation is critical to New Zealand’s economic wellbeing. If the country doesn’t move towards decarbonising aviation, it may jeopardise our clean, green image in the tourism and export sectors.
The global pressure is on, she says.
This includes the European Border Adjustment Mechanism and mandates for Saf both indicating increasing pressure for shipping and aviation.
The European Commission has proposed a Saf blending mandate for fuel supplied to European Union airports, with minimum shares of Saf gradually increasing from 2 per cent in 2025 to 63 per cent by 2050.
Hydrogen has a key role to play in decarbonising the aviation sector, both initially as a key input to producing e-Saf (a drop in fuel that can be blended up to 50 per cent with fossil jet fuel) and in the longer term as a direct fuel.
Schirr says producing some e-Saf within New Zealand has benefits for fuel security, will create jobs, and stimulate associated industries.
The cost of not progressing decarbonisation initiatives within our borders is huge – both in terms of impact on those key tourism and export sectors, but also in terms of the massive offsets we will be paying out for not meeting decarbonisation commitments.
Offset payments will be heading offshore to support other countries’ decarbonisation projects.
‘’Why not get the benefits here directly?’’
Green hydrogen can be produced from curtailed renewable energy (to monetise otherwise “spilled” capacity) to make e-Saf, which can be stored and transported like conventional aviation fuel and blended to reduce emissions.
New large hydrogen projects can also unlock new power generation, with electricity being the key input for hydrogen. Basically, anything that can de-risk new generation projects, increase supply and reduce power prices, which then in turn is good for hydrogen production.
Good examples out there: The NZ Hydrogen Aviation Consortium (with Airbus, Christchurch Airport, Hiringa, Fabrum, Fortescue and Air NZ) is leading the way, starting with solar PV and electrolysers to produce green hydrogen for aviation and other users. Hydrogen production is flexible.
“This means it is ideal to provide large-scale demand response – a critical ingredient for New Zealand and at a significantly lower cost than the [now ditched] Onslow pumped hydro scheme.”
A “back of the envelope” calculation shows Onslow was last estimated at $16 billion to build to manage NZ’s dry-year problem.
The 600 MW Southern Green Hydrogen project is estimated at $2b and would provide around a third of NZ’s total dry-year requirement.
“That would come up roughly to $6b if we wanted to cover the [entire] dry-year problem. Still massively cheaper and it also produces hydrogen for export so makes money separately.”
Airports and logistics operators can also use hydrogen fuel cell vehicles and equipment to reduce emissions on the ground.
Biogenic SAF (bioSAF)
Uses organic feedstocks (fats, oils, woody residues, municipal solid waste. The technology is in commercial use today (about 0.1 per cent of all commercial flights) but the key challenge to scalability is the amount of feedstock needed, says Channel Infrastructure. Used oil and municipal solid-waste quantities are too low to scale production. Forestry wastes are dispersed with a high cost to harvest, aggregate and transport and feedstock cultivation competes with food crops. There is also a risk of feedstock cost escalation as Saf scales and demand grows.
Synthetic Saf (e-Saf)
Also known as Power-to-Liquids (PtL), it is chemically “indifferent” to fossil jet fuel. Manufactured by combining renewable hydrogen and CO2 to produce hydrocarbons via the Fisher Tropsch process and is scalable. But it is reliant on supply of renewable electricity to produce green hydrogen. Channel says e-Saf manufacturing is still in its infancy and highly capital intensive.
Air NZ
Net zero emissions by 2050, 10 per cent Saf use by 2030, begin replacing Q300 domestic fleet with more sustainable aircraft from 2030.
American Airlines
Net zero emissions by 2050, 10 per cent Saf use by 2030, 45 per cent reduction in net emissions from 2019 by 2035.
Cathay Pacific
Net zero emissions by 2050, 10 per cent Saf use by 2030, committed to 1.1 million tonnes of Saf use over 10 years, invested in Fulcrum bioenergy (Saf maker).
Emirates
Supports the IATA Net Zero emissions by 2050 strategy.
Qantas
Net zero emissions by 2050, 10 per cent Saf use by 2030, 25 per cent reduction in net emissions from 2019 by 2030, average of 1.5 per cent a year fuel efficiency improvements, US$200 million joint investment with Airbus to accelerate Saf industry in Australia.
Qatar
Net zero emissions by 2050, 10 per cent Saf use by 2030.
Singapore Airlines
Zero emissions by 2050, 10 per cent Saf use by 2030.
United Airlines
Net zero emissions by 2050 (without use of offsets), 10 per cent Saf use by 2030, 50 per cent reduction in carbon intensity from 2019 by 2035.
Source: Channel Infrastructure.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
A 737 Max fuselage panel broke free shortly after takeoff in January 2024.