Z Energy says it wants to to be part of the work to develop a sustainable aviation fuel industry in New Zealand.
The company says it intends to be part of the closed request for proposal process announced by Air New Zealand early this week.
The airline and the Government's Ministry of Business Innovation and Employment will look for an operator of a commercial sustainable aviation fuel (Saf) plant in New Zealand.
Z Energy may have a new owner if it wins the bid to build a plant. It is the target of a possible takeover by Australian company Ampol which has been given exclusive access to its books until October 11.
The aviation sector is a big contributor to New Zealand's overall emissions: five million tonnes of carbon dioxide equivalent were produced in 2018 from domestic and international aviation.
The fuel company says that while electric, hybrid and hydrogen aircraft are coming and could work in New Zealand domestically, Safs was the only current option for decarbonising medium and long-haul flights. Air New Zealand is working with Airbus on a hybrid hydrogen aircraft to fly regional routes.
Z Energy general manager of strategy and risk Nicolas Williams said the way the planet's resources were being used wasn't sustainable and there was a need for alternative solutions".
"We support and recognise the need for SAF to become the norm in New Zealand. It is part of Z's road map for providing low-emission fuels that can help our customers decarbonise their operation," he said.
In 2018, Z began working with industry partners, including Air New Zealand, to identify the near-term pathways (5-10 years) for the viable and sustainable commercialisation of aviation biofuels in New Zealand.
Last year, as part of a Saf consortium, Z worked to develop a Road map for SAF to 2050 – which shows that there is a viable pathway for standing up a Saftindustry locally.
"Z has consistently advocated for policy that would enable and incentivise the local
production of Saf, both as a company as well as part of a consortium. We believe
public and private sector collaboration will be vital to driving tangible outcomes in
this space, as has been the case for successful Saf production in other countries," Williams said.
The use of Saf could reduce aircraft emissions by more than 80 per cent for every litre used, and its production in New Zealand would create jobs in the regions, benefit the economy and position New Zealand as a world leader.
Z's strategy lead Sheena Thomas said the country had signed up to emissions reductions targets and this gave her confidence that a viable industry could now be built.
It was likely Saf would come from wood waste, which was abundant in New Zealand. The Marsden Point refinery had been suggested as a possible site given infrastructure is already in place there.
Z had tried to scale up commercial production of biodiesel at Wiri but that plant was now mothballed, largely because of the rising cost of the tallow feedstock.
In a draft report early this year, the Climate Change Commission pointed out that in other countries where sustainable aviation fuel is being produced, its use has been supported by public funding and other policies.
The commission has suggested grants or tax credits to improve competitiveness with fossil fuels. In a submission to the Government, Air New Zealand has pointed floated options such as production incentives and using a percentage of traveller levies to fund the industry.