Air NZ, Virgin Australia to buy locally-produced aviation biofuel

Air New Zealand and Virgin Australia said, as part of a new partnership, they were looking to  procure locally-produced aviation biofuel.

In what would give a boost to the aviation biofuel sector in the region, the alliance partners said today that they had released a request for information (RFI) to the market for aviation biofuel.

According to Virgin head of sustainability Robert Wood, helping develop aviation biofuel production would cut emissions and afford ''long-term fuel security for the sector''.

''We are seeing the development of the aviation biofuel industry accelerate internationally but that is not yet the case for our region,'' Wood said in a statement.

''We are confident that our collaboration with Air New Zealand to procure a large volume of aviation biofuel will de-risk investment in the sector, creating high-tech, high-skilled jobs in the region.''

According to Air New Zealand chief flight operations and safety officer David Morgan, the RFI formed part of the airline's carbon management program.

''By working in partnership with our alliance partner Virgin Australia we hope we can stimulate the local market, drive innovation and investment and potentially uncover a sustainable biofuel supply suitable for our respective operations,'' Captain Morgan said in a statement.

According to aviation consultant Irene King, biofuels held promise for the future, but were not yet economic due to the current cheap price of oil as a result of the global economic downturn, reported.

"Really, biofuel only works when the price of oil is US$120 (NZ$178) a barrel," she said. It is currently under US$40.

Airlines which were conscious of their impact on the environment invested in biofuels as part of their risk-management plans.

"There's going to be much more of a focus on the environment and what is coming out of these engines. Anything that gives a non-polluting discharge is going to be really favourably received," King said.

She added, biofuels also offered a means of hedging against the oil price in the long term and was also recognition of the future direction of aero engine technology.