Oliver Gill
Mon, 24 July 2023
british airways
The owner of British Airways has invested in a green aviation fuel producer based in Teesside as the airline industry races to meet net zero targets.
IAG, the FTSE 100 group behind the UK flag carrier, Aer Lingus and Spain’s Iberia, is to invest in Nova Pangaea Technologies, which is building its headquarters within the Teesside Freeport.
Nova Pangaea has developed technology to turn waste products such as wheat straw, sawdust and leftover wood trimmings into feedstock to create so-called sustainable aviation fuel (SAF).
SAF has a far lower carbon footprint than current jet fuel and is seen as the best way to cut the environmental impact of the aviation industry.
However, production is currently small-scale, and industry is pushing to rapidly ramp up supply to meet net zero targets.
IAG’s investment in Nova Pangaea will help the start-up establish its first commercial waste-to-fuel factory, with the airline group set to become a customer.
The size of the investment was not disclosed, though Nova Pangaea’s chief executive Sarah Ellerby called it “transformational”.
IAG’s backing comes as it races to meet a goal of fuelling 10pc of its flights with sustainable aviation fuel by 2030.
The Government has set a goal of decarbonising Britain’s airline industry by 2050 under its “Jet Zero” plan. SAF is seen as the fastest option for transition, with current planes able to run on the fuel.
Luis Gallego, the airline group’s chief executive, said: “Sustainable Aviation Fuel is the only realistic option for long haul airlines to decarbonise, which is why investment in this area is so critical.
“We are not just buying SAF, we are willing to invest in developing the industry, but we need governments in the UK and Europe to act now to encourage further investment.”
Nova Pangaea announced in November last year that it would build its headquarters and first commercial plant at Wilton International, an industrial site within Britain’s largest freeport at Teesside.
Tees Valley mayor Ben Houchen told The Telegraph that IAG’s investment marked a “huge coup for Teesside, bringing more of the cleaner, safer and healthier jobs of the future”.
He added: “Decarbonisation is one of the biggest issues facing the aviation industry today. If we’re truly serious about becoming the UK’s clean energy powerhouse and growing Teesside Airport responsibly, SAF is an opportunity that we need to grab with both hands.”
Ben Houchen (right) with Rishi Sunak at the Teeside Freeport in 2022 - Charlotte Graham
IAG’s investment in the area is a boost for the under-fire mayor who is facing allegations of sweetheart deals with two local businessmen at Teesworks, a 4,500-acre brownfield development that forms part of the freeport zone.
Michael Gove, the Levelling Up Secretary, has ordered an inquiry into the claims. Mr Houchen and others accused have all denied any impropriety and branded it a Labour “smear campaign”
However, the furore has threatened to overshadow plans to revitalise a region and has already prompted companies to rethink plans to build factories at Teesworks.
The claims do not relate to the Wilton International industrial site where Nova Pangaea Technologies will be based.
Ms Ellerby said: “Our facility will be the UK’s first commercial plant of its kind, and it will play a crucial role in decarbonising the aviation sector, as well as providing local employment opportunities.
“We are confident of beginning construction later this year and producing second-generation biofuels by 2025.”
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