Qantas Buys Into Planned Biofuel Plant in New Zealand

Marsden Point oil refinery, the potential site of a new biofuel manufacturing plant. Source: Shellie Evans | Flickr. Licensed under Creative Commons 2.0

Australian airline Qantas is part of a consortium planning to buy unused land and assets at the Marsden Point oil refinery in New Zealand to manufacture biofuel on the site.

The refinery shut down in 2022 because of declining revenue, and ownership of the site was transferred to Channel Infrastructure Limited, which is using some of the infrastructure for fuel importation and storage.

It has signed a conditional agreement with Seadra Energy and a consortium of partners to develop a biofuel manufacturing operation on the site. The partners are Qantas, Renova Inc, Kent Plc, and ANZ.

The consortium will purchase Channel’s decommissioned refinery assets (which would be refurbished and reconfigured), existing tanks, jetties, and certain other infrastructure, along with approximately 18 to 20 hectares of land. The deal will cost Seandra and its partners around US$57 million (NZ$90 million).

‘Multiple Markets’ Identified: Consortium

Initially, the consortium had planned to buy $33.88 million of decommissioned hydrocracking assets and relocate them offshore, but after investigating this option, it concluded that leaving them in place and using them for a biorefinery would be better.

That will mean purchasing additional assets from Channel for $23 million and paying annual ground rent of $6 to $7 million.

“After more than 24 months of detailed engineering and other workstreams, the project consortium partners have selected New Zealand as the best place for the biorefinery project site,” a spokesperson for Seadra said.

“Given the world class infrastructure available at Channel’s facilities, and having identified multiple markets for the biofuels produced, the economics for a domestic advanced biorefinery made the most sense for the consortium.”

Qantas has said human-induced climate change is a “significant issue for the aviation industry” and committed to Paris Climate Agreement targets in its latest annual report.

“Sustainable aviation fuel will be critical to decarbonising the aviation industry,” a spokesperson for the airline said.

“Qantas has set a 10 percent SAF [sustainable aviation fuel] target for 2030 and is investing in the development of SAF production through its $400 million climate fund.

“This includes early investment in the development of the biorefinery at Marsden Point. New Zealand and the Pacific are a key part of our network, and we’ve recently announced an increase in our trans-Tasman services by up to 50 percent from October 2024.”

Its strategy stands in contrast to that of Air New Zealand, which has dropped its 2030 emissions reduction target and withdrawn from the U.N.-backed Science Based Targets initiative (SBTi) for corporate action on climate change, citing problems with sustainable aviation fuel as a significant reason for its decision.

Seadra’s existing option to purchase the assets will be extended to enable the company to finalise its investigation into the project. It has until July 31, 2025, to decide whether to proceed.