Paul Callister, once a critic of 'Think Big' energy projects, wonders if we need to revisit that approach and became a leader in producing sustainable aviation fuels
As a young economist in the 1980s I wrote a number of articles criticising aspects of ‘Think Big’ projects, notably the Mobil synthetic fuel plant. At the time it seemed a very wasteful use of natural gas to fuel transport - far better to use it directly to power cars via CNG and LPG. In the end, both experiments ended badly.
Now we are again considering how to best use our limited resources to provide low carbon fuel for our transport sector. As Newsroom's David Williams points out, the aviation industry provides a particular challenge. It may mean revisiting aspects of ‘Think Big’.
Suppressing demand for domestic flights?
Transport debates often pit technological optimists against those who argue for a need for significant mode shift. Under the first option, the main tools would involve a major switch to electric cars and a rapid move by all domestic airlines to as yet non-existent electric or hydrogen powered planes. The Climate Change Commission tends towards technological optimism.
However, the Commission does recommend developing low-carbon fuels (to form 1.5 percent of all liquid fuel use across the transport sector – not necessarily aviation - by 2035) and to increase the price on carbon to at least $140/tCO2 by 2030. The 2018 Productivity Commission report on a low emissions economy estimated that a price of $100 could reduce domestic air travel demand by up to 12 percent.
The Climate Commission draft report talks of getting more freight onto trains and supports further electrification of the network but is silent on re-establishing a low-carbon long-distance passenger network.
Encouraging people to use trains is the model being pursued by many European nations. 2021 is designated as European Year of Rail by the European Commission and night trains
are being re-introduced.
A tax on international travellers?
While getting people out of planes and onto much lower emission vehicles needs to be a goal if we are to fully decarbonise domestic transport, there is no possibility of a tunnel link to Australia and the rest of the world.
The CCC could not directly comment on international aviation. In contrast, the Parliamentary Commissioner for the Environment tourism report has a strong focus on this sector. Its core recommendation is a distance-based departure charge. Revenue raised would be used to develop low-carbon fuels and to fund climate change work in the Pacific.
While more research on low carbon fuels would be useful, the PCE report suggests that sustainable aviation fuels are ‘immature’. But in fact we have experience in the processes needed to produce them and much of the technology is well proven.
Shifting to sustainable aviation fuels
Internationally, discussions about aviation emissions are shifting away from offsetting to Sustainable Aviation Fuels (SAFs).
A February 2021 joint statement by Transport Canada and the U.S. Department of Transportation demonstrates a commitment to reducing emissions from aviation, primarily based around ‘high integrity’ SAFs. In Europe a consensus statement for supporting the deployment of sustainable aviation fuels in the EU has just been released. Two key recommendations are to exclude biofuels produced from cropping land and to prioritise fuels made from wastes and residues.
New Zealand would also need to exclude biofuel from crops. Wallace Rae and I estimated that supplying our domestic aviation fuel requirements from an energy crop such as Jatropha or Camelina would utilise up to 70 percent of our arable land.
For a country where agriculture is the largest tradable sector of the economy, this is clearly not feasible. A smaller contribution to biofuel production through using waste fats, waste wood or algae based production may be possible.
How would we ensure SAFs were used in New Zealand? One way is to mandate a certain percentage of SAF to be used from some chosen date with this amount quickly rising. It could also require airlines flying into New Zealand to use SAFs. This would quickly focus the mind of the aviation industry as well as potential suppliers of such fuel from within New Zealand and overseas.
Does it make economic sense for SAFs to be produced here?
Both the biofuel and synthetic aviation fuels routes involve large industrial plants with long lead times for construction. This brings back memories of ‘Think Big’.
The now-closed Motunui synthetic petrol plant, commissioned in 1987, was the first of its kind in the world. We will soon have a skilled workforce being laid off from the mothballed Waitara methanol plant.
And, while also currently not operating, Z Energy’s fairly new biofuel plant produced biodiesel from tallow.
Should New Zealand tap into this existing expertise to produce SAFs domestically?
While raising finance, resource consents and finding labour for construction are all important, the key will be the cost and availability of significantly large amounts of renewable electricity. And as Jack Santa Barbara points out, how the electricity market is organised will significantly influence costs.
If SAFs were produced in New Zealand it would require a significant increase in the production of renewable electricity. Transpower’s 2018 white paper considered energy futures and mentions aviation. But it did not include increases in renewable energy for aviation in its scenarios. An updated report released in early 2021 again mentions aviation. But the report does not consider the bigger task of alternative fuels for international aviation. We cannot ignore one of our largest sources of emissions indefinitely.
On the other hand, it might be cheaper to produce SAFs overseas, for example using solar power in Australia or in Saudi Arabia. But if the world’s airlines begin a significant switch to SAFs, these fuels are likely to be in short supply.
As Lord Deben, chair of the United Kingdom's Climate Change Committee, says, New Zealand has a unique opportunity to lead the world in reducing emissions. Given New Zealand’s geographic location, aviation needs to be a key part.
