Air New Zealand's first shipment of sustainable aviation fuel (SAF) is arriving in the country on Sunday.
The shipment of 1.2 million litres of SAF was a drop in the bucket when compared with the 1.4 billion litres of fossil fuel the airline uses on an annual basis.
"It's part of our journey to get to at least 1 percent of the [biofuel] that we're going to use this year," said Air New Zealand chief executive Greg Foran.
Mixing biofuel with traditional fossil fuels to reduce carbon was part of the airline's decarbonisation plan.
The fuel, manufactured in Finland, was made out of recycled tallow or cooking oil. However, Air New Zealand was investigating whether biofuel could be manufactured locally.
"We're looking at something that potentially might be able to use woody biomass so slashings from trimming trees," he said, adding it would probably require a capital investment of about $500m to $700m.
Foran said the process would be expensive to set up but worth it in the long run.
"It's quite expensive, but we're talking about our future long term, and you know, I think it could be a very good thing," he said adding the company was studying the feasibility of setting up such a plant in co-operation with the government.