Air NZ’s commitment to being a world leader in bio-fuels has been reinforced by its founding membership of a new global organisation dedicated to developing algae-sourced fuel. Air NZ is one of three airlines to join the new Algal Biomass Organisation (ABO), together with Continental Airlines and Virgin Atlantic. More than 400 leading global algae experts are involved in the ABO, which represents a new international commitment to algae as a long-term source of sustainable fuel.

Around the world hundreds of scientists are now working to crack the process of turning algae into commercial quantities of jet fuel. Algae are seen as an ideal low-cost source of fuel because they grow rapidly (doubling in bio-mass in as little as a few hours), require limited nutrients, and can annually deliver up to 50,000 litres of fuel per ha. Air NZ CEO Rob Fyfe believes algae offer “exciting possibilities” for the aviation industry in the longer term. But in the short to medium term, the airline is looking to another source of bio-fuel, from the jatropha plant.

Air NZ is planning to test a Boeing 747-700 on jatropha-sourced bio-fuel in the last quarter of this year, subject to final regulatory approvals and fuel testing by engine-maker Rolls Royce. The jatropha oil for the test flight comes from South Eastern Africa (Malawi, Mozambique and Tanzania) and India. It was sourced from seeds grown on environmentally sustainable plantations.

Fyfe is confident jatropha will be available in the necessary commercial quantities to meet Air NZ’s needs within five years. The airline has already had offers from companies in Asia and Africa willing to guarantee enough supply to meet its 2013 target of using at least 1m barrels of bio-fuel annually. This represents about 10% of Air NZ’s current fuel consumption. Jatropha-based bio-fuel is up to 30% cheaper than current jet fuel prices, which have recently been up to $US174 barrel.

Fyfe predicts there will be a fundamental shift in aviation fuel towards bio-fuels in the next few years but he stresses the challenge is to develop a robust supply chain model. Air NZ is looking to work with like-minded partners, including the Govt, on the development of refinery and delivery opportunities.

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