Work with Australia on jet biofuels

Bioenergy Association Energy News

24 March 2022                                                                                                                                                                               

Collaboration with Australia will be essential to develop a local
sustainable aviation fuel industry, the Bioenergy Association of New Zealand
says.

Executive officer Brian Cox says it makes sense for the countries to
collaborate on research and development of SAF – particularly as Australia
has more money, resources and people to put toward it.

“A collaborative Australia-New Zealand approach is going to get us there
faster,” Cox says.

“We need to demonstrate to both governments that, hey, this is a thing that
can be done now.”

While electric hybrid and hydrogen aircraft options are being developed for New Zealand’s
short-haul fleet, SAF will be essential for decarbonising long-haul flights.

The Ministry of Business, Innovation and Employment and Air New Zealand are
already exploring whether a commercial-scale SAF production industry could be viable
in New Zealand. 

Closing the gap

But the Sustainable Aviation Fuels Alliance of Australia and New Zealand
says an industry must be developed more quickly to make the fuel's use
financially viable.

The group’s latest report focuses on bridging the price gap between conventional aviation fuels and
SAF.

Its modelling suggests SAF could cost 10 times the price of jet fuel, but
the groups say that cost could get down to twice that of jet fuel if
economies of scale come into play.

That is also the level at which it believes a voluntary passenger purchasing
framework, such as that used for United Airlines’ Eco-Skies Alliance
programme, could be viable for the sector.

Such a scheme would enable passengers to buy a portion of SAF for their
flight and decrease their individual emissions.

As an example, on a flight from Sydney to Melbourne with a 50 per cent SAF
blend priced at twice that of jet fuel, a passenger would pay an extra
A$9.13 or just over 1c per kilometre.

At a cost 10 times that of jet fuel, customers would pay an extra A$82.14
dollars, or 12c per kilometre; at five times, they would pay an extra
A$36.51, or 5c per kilometre.(figures in Australian dollars)

“These results emphasise the need to focus on bridging the price gap between
SAF and conventional aviation fuel, as cost reductions will drive greater
participation by voluntary customers,” the report says.

“This helps ensure that a SAF programme would neither place disproportionate
costs on airlines nor produce unacceptable price rises to their customers.”

Mechanisms

The proposed scheme would effectively create a certificate for each tonne of
SAF blended into the fuel supply infrastructure, the report says.

“These certificates would be surrendered to match the opt-in SAF purchases
of SAF by corporate and government bodies that have net-zero emission
targets or carbon-neutral commitments and want to reduce their aviation
emissions.”

The high capital cost of producing SAF, however, will mean the aviation
industry will require government support through investments,
collaborations, studies and policies, the group says.

“Feasibility studies would be conducted to assess the feedstock supply and
determine whether SAF supply would include both local and imported supply.

“Local production of SAF would result in a lower product price.”

Last year, United Airlines flew a Boeing aircraft from Houston over the Gulf
of Mexico using 100 per cent SAF in one engine and conventional jet fuel in
the other.

Delta Air Lines aims to replace 10 per cent of its jet fuel with SAF by
2030, while rival American Airlines has committed to using 9 million gallons
of SAF annually by 2023.

Both Norway and Finland have targets for aviation fuel to contain 30 per
cent SAF by 2030 and Norway has also been blending SAF at Oslo Airport since
2016. This programme was extended to Bergen Airport in 2017.

In 2021, Air France and Dutch airline KLM launched a programme for cargo
customers, which enabled them to support the development and production of
SAF.

Next steps

Bioenergy Australia chief executive Shahana McKenzie says one way to
encourage faster development of SAF in Australia and in New Zealand would be
to follow the UK’s lead and establish a joint jet council.

This would connect the various levels of government with aviation industry
stakeholders and guide the ongoing development of sustainable aviation
policies, she says.

“As a priority, the jet council would work with the various levels of
government along with key industry participants to guide and support
pathways for SAF R&D in Australia and New Zealand, as well as guide the
design and implementation of policies to overcome existing barriers to SAF
development.”