Air New Zealand chief executive Christopher Luxon says using biofuel in aircraft is a long-term bet as the industry struggles to find a sustainable alternative to traditional aviation fuel.
Speaking at a sustainability event in Auckland, he said the airline had received about 30 expressions of interest in developing biofuel from this region and infrastructure in partnership with Virgin Australia.
It was whittling down a shortlist of companies now.
"It's a long term bet. It's really hard to scale these things up," he told the gathering of about 400 business leaders.
While a commercial programme was a long way off it was important to keep working to develop alternative fuels, he said.
The aviation industry, responsible for more than 2 per cent of greenhouse gases, is being pushed to act this week by delegates from 190 nations, who are debating a United Nations accord in Montreal that would cap emissions from international flights.
Air New Zealand is one of the biggest fuel users in the country and within the company fuel burning is responsible for more than 99 per cent of its carbon emissions.
Luxon said the airline was increasing fuel efficiency by using more newer, more efficient aircraft, using more more efficient flight paths and tailored arrivals and departures.
It was also switching its car fleet to electric vehicles and airport service vehicles were also moving away from traditional fuel. About 45 per cent of airport vehicles were now electric, up from 32 per cent a year ago.
He said the airline was also developing carbon offset schemes aimed at upgrading land.
Sir Jonathon Porritt, chairman of Air NZ's Sustainability Advisory Panel, said the airline industry had to be very sober about making projections about biofuel.
"In the past people have made over-excited projections and it hasn't helped anybody. We've got to acknowledge it's going to be quite a slow story," said Porritt who also chairs the Forum for the Future, a sustainable business charity in Britain.
Bloomberg reports the biofuel industry currently has enough factories to produce as much as 378 million litres of jet fuel annually. That barely registers next to the more than 314 billion litres airlines consume each year.
Air New Zealand, the Department of Conservation and local iwi today announced new conservation initiatives on three of the country's Great Walks - the Heaphy Track, the Whanganui River Journey and Lake Waikaremoana. The projects are an expansion of the Air New Zealand Great Walks Biodiversity Project and involve pest control work to protect native animals.
The airline's support for conservation initiatives with DOC is worth more than $1 million annually.