Sustainable Aviation Fuel: Helping keep New Zealand connected and competitive

For a nation at the far edge of global trade routes, air connectivity is critical to New Zealand’s economy. Every day, aviation carries high-value exports to key markets and brings tourists, students, and investors back home.

That same connectivity is heavily reliant on fossil fuel, however. Aviation is responsible for roughly 2 to 3 per cent of global carbon emissions, and one of the hardest sectors to decarbonise.

Sustainable Aviation Fuel (SAF) is a critical part of Air New Zealand’s plan to meet its 2050 net-zero carbon emissions target, and it is increasingly relevant for exporters and corporates looking to address their own emissions.

Matt Connolly, Air New Zealand’s Sustainability Lead – Energy Transition, oversees the work to secure SAF supply, partner with producers, and help support the broader environment needed for SAF to scale. In the year to July 2025, 1.7 per cent of Air New Zealand’s total fuel uplift was SAF.

SAF and the business of staying connected

Aviation and trade are inseparable for New Zealand. Seafood, meat, horticulture, pharmaceuticals, and time-critical freight all rely on air transport to reach markets fast. Tourism and business travel, in turn, generate vital export income.

SAF offers the most immediate and scalable way for aviation to decarbonise. Currently produced primarily from renewable feedstock such as waste oils, forestry residues or other biogenic materials, SAF can cut lifecycle emissions by up to 90 per cent compared with conventional fossil jet fuel. SAF’s benefits also extend beyond carbon reduction. Converting waste products such as used cooking oils into SAF supports the circular economy, and if SAF was produced in New Zealand in the future, it could bring investment, regional employment and greater energy security.

“The key with SAF is that it can be used in today’s aircraft and airport fuel systems with no modification – a rare example where progress doesn’t require massive changes to existing infrastructure or expensive aircraft,” says Matt Connolly.

“The challenge is cost and supply. Global production still accounts for less than 0.3 per cent of total jet fuel demand, and SAF currently costs two to five times more than conventional fuel. Scaling production requires long-term investment, supportive policy and clear demand signals from airlines and customers.”

Air New Zealand has taken a pragmatic approach, trying to balance commitments with affordability, and developing relationships with SAF producers. Connolly describes it as a long game. “Scaling takes time; steady demand and consistency is what will give investors confidence to build the next generation of fuel plants.”

SAF and corporate climate goals

SAF’s significance extends well beyond aviation. It is increasingly becoming a practical tool for New Zealand corporates and exporters pursuing their own net zero and Scope 3 emissions targets.

Under international greenhouse-gas accounting standards, emissions from air travel and airfreight sit in Scope 3, either as business travel, upstream transport and distribution, or downstream transport and distribution. For many companies, these categories represent a large share of their total footprint and are among the hardest to influence.

By helping fund SAF use by airlines, corporate customers can claim emissions reductions from that airline’s use of SAF. This is considered “in-setting”. Unlike offsetting, which compensates for emissions elsewhere, in-setting reduces emissions within the same value chain as the emissions’ source.

Air New Zealand’s SAF programme enables participating organisations to contribute to the airline’s SAF purchases and receive verified data showing the associated emissions savings. This allows businesses to credibly report reductions under Scope 3 while supporting the broader energy transition.

Mr Connolly notes that this link between aviation and corporate sustainability goals is becoming more visible. “Many export buyers are now assessing not only how goods are produced but also how they are transported. As international markets tighten their supply-chain emissions reporting, SAF use will increasingly influence procurement decisions and brand reputation.”

For logistics providers and freight forwarders, SAF also offers a way to differentiate services by embedding verifiable carbon-reduction options into their products. The same principle applies to business travel programmes – measurable reductions through contributing to SAF can feed directly into corporate sustainability reporting.

A collective effort

While SAF alone won’t solve aviation’s climate challenge, for New Zealand, staying part of the conversation is critical, notes Mr Connolly.

“Air New Zealand’s ongoing SAF work reflects that broader goal of keeping the country linked to the world. For airlines, exporters and corporates alike, support for SAF isn’t a sustainability gesture – it’s an investment in the resilience and reputation of New Zealand’s trade economy for the long-term.”

Need more information? Email saf@airnz.co.nz.