New Zealand could slash its greenhouse gas emissions by kick-starting a major biofuels industry, a new Government-funded investigation has found.

But the new report's authors say market forces alone won't be enough to realise the country's potential for renewable, low-carbon transport fuels.

The report, by Crown research institute Scion, set out how New Zealand could turn feedstock crops into green fuels for heavy transport, ships and aircraft – something that stood to cut emissions and boost our energy security.

The researchers drew on a specially-developed computer model to simulate scenarios of what crops and processing facilities would be needed to produce different quantities of transport fuel sustainability.

Advertisement

The modelling explored substituting fossil fuels for biofuel, at proportions ranging between five and 50 per cent.

With combustion of liquid fossil fuels in 2015 representing about 23 per cent of New Zealand's domestic greenhouse gas emissions, biofuels could have a major impact on overall lowering of carbon emissions, the authors found.

By growing longer-term crops, such as energy forests, New Zealand could build a bio-fuelled future.

However, quantitative scenario modelling showed tens of thousands of hectares of purpose-grown feedstock crops and billions of dollars of capital investment in processing plant construction and production would be needed to make that ideal a reality.

The study findings, presented in the New Zealand Biofuels Roadmap Summary Report, showed how drop-in fuels from non-food feedstocks - particularly forestry grown on non-arable land - was the most attractive option.

This form of biofuel production could also drive regional development and employment growth in regions such as Northland, East Coast and the central North Island.

Scion's clean technology science leader Paul Bennett said the modelling and discussions with groups had made it clear the market alone wouldn't be enough to foster large-scale biofuel production.

However, if New Zealand could agree on the future role and scale that biofuels should play in decarbonising our transport sector, a national plan could follow.

Advertisement

"Part of that internal agreement needs to be getting the public on-board as key beneficiaries of a sustainable liquid transport fuels approach."

Naturally, it wouldn't be easy, nor quick to develop a green, renewable liquid transport fuels industry – but Bennett said New Zealand had the capability and resources to do it if there was investment, a public consensus and political will.

He singled out five main ways the country could benefit: slashing emissions; meeting our committed carbon targets; supporting regional growth; gaining independence from oil imports; and maintaining access to global markets for goods and services.

"We believe this study is a great starting point for an open and fact-based discussion around the New Zealand biofuels opportunities," Scion chief executive Dr Julian Elder said.

"We recognise that the information reported here is not an exhaustive study of all elements of a new biofuels industry, but hope this study will inform and catalyse such a debate."

The modelling tool was available for more quantitative scenarios, based on what Scion hoped was a longer-term move toward to manufacturing green fuels within the country.

The two-year study was supported by Scion's Strategic Science Investment Fund from the Ministry of Business, Innovation and Employment.

Dr Martin Atkins, a senior research fellow at Waikato University's Energy Research Group, said the study was well-timed.

"While there is lots of interest in electric cars, this study clearly shows that liquid biofuels have an important role to play and simply cannot be ignored and put in the too-hard basket.

"The study clearly defines the opportunities and key areas that need to be addressed and presents several possible futures that will provide focus for discussions between policymakers, the private sector and the community about the best way forward."