The deal involves the purchase of nine million liters of the green fuel, which will be produced at Neste's Singapore refinery and supplied to Los Angeles International Airport between April 1 and Nov. 30, 2024, the airline said in a statement.
The decision comes weeks after Air New Zealand sought out startups in the SAF sector to become its supply partner.
"The SAF is expected to deliver a reduction of carbon emissions by up to 80% over the life cycle of the fuel compared to using fossil jet fuel, which includes its production as well as transport emissions," the airline said in a statement.
The airline anticipates it would need SAF to make up around 20% of its total fuel uptake by 2030 as it aims to reduce carbon intensity by 28.9% by the end of the decade and achieve net-zero carbon emissions by 2050.
Aviation produces about 2% of the world's emissions and is considered one of the hardest sectors to decarbonise, even as global regulators try to boost the use of sustainable fuel.
"Sustainable aviation fuel is currently the only solution to significantly reduce emissions from long haul flight, but it currently makes up less than 1% of the global fuel supply," Air New Zealand Chair Dame Therese Walsh said.
