Biofuels production and development in New Zealand

Apr 2024

Read the feature article in IEA Bioenergy Task 39 Newsletter Issue n. 64, by Paul Bennett, Scion

  • Currently, New Zealand uses very little biofuels in transport. However, with New Zealand’s main sectors of GDP being exported products and Tourism, greening of international transportation is receiving much attention. In particular, the development of low carbon Aviation and Marine fuels are being demanded by international transportation. This creates a growing interest in biofuels for aviation and maritime transport.
  • The most likely road to expand biofuel production in New Zealand is to use non-food feedstocks, particularly planted forestry on non-arable land, to produce SAF and marine biofuels. New Zealand has about 10 million hectares of forestry, of which 8 million hectares are native forest, and about 1.8 million hectares are dedicated plantation forestry. Only the dedicated plantation or production forest can be used as a source of sustainable feedstock for biofuels. The long run supply of material that could be considered for wood-based fuels is around 7.6 million green tonnes per annum. This includes woody residues and low-quality industrial logs (K-grade logs), not suitable for timber. In addition, there is enough land available particularly with short rotation forestry regimes to grow dedicated sustainable bioenergy feedstocks.
  • In 2022, New Zealand imported Sustainable Aviation Fuels (SAF) from Singapore to test the supply chain and evaluate costs of importing SAF and invested in studies to consider the feasibility of producing SAF locally.
  • An agreement was made to supply and transport marine biofuels starting in 2024. The fuel will include a 24% Used Cooking Oil Methyl Ester (UCOME) biofuel blended with very low sulphur fuel oil (VLSFO). Green shipping corridors were discussed among stakeholders.
  • The current policy incentives for biofuels are the New Zealand Emissions Trading Scheme (ETS), the excise tax exemption for bioethanol, the National Land Transport Fund incentive and some R&D support to research institutions. Carbon pricing through the ETS will drive biofuels in the Aviation and Marine sectors once emissions reporting for the international use of these fuels is required.
  • A biofuels obligation policy developed in 2021 was rescinded before implementation in 2023.