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Virgin, Air NZ on hunt for local biofuel maker

Virgin Australia and Air New Zealand are hopeful aviation biofuel can be produced locally, in a bid to cut carbon emissions and fuel costs.

The airlines have spent the past year investigating the merits of commercially viable biofuel sources within Australasia, and reviewed the input of more than 30 organisations in Australia, New Zealand, the US, Canada and Europe.

“There is clear interest and potential to produce sustainable aviation fuel in this region, and we will now undertake further detailed exploration in order to reach significant commercial scale,” Virgin Australia head of sustainability Robert Wood said.

Biofuel could potentially be made from household waste, straw, wood waste or plastic waste, Virgin Australia said.

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The airlines are optimistic biofuel could achieve significant carbon emissions reductions in the medium term, Mr Wood said.

Air NZ head of sustainability Lisa Daniell said the investigation has “helped stimulate industry dialogue on the production of sustainable aviation fuel in the Australasian region.”

“Importantly, the process has also greatly expanded our understanding of the technologies and processes involved and the potential time frames to scale up to the volumes required,” she said.

The airlines will now work with short-listed companies on strengthening the commercial case for investment.

Fuel is a major operating cost for airlines, along with labour and airport charges.

Virgin Australia forked out $449 million on fuel and oil in the six months to December 31, which was 20 per cent less than a year earlier due to lower oil prices.

Air New Zealand’s fuel bill was $NZ390 million in the same six month period.

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