New Zealand Presented by Paul Nash Environmental Affairs

New Zealand Presented by Paul Nash – Environmental Affairs Head of New Energy - Airbus Alternative Fuels 27 July 2010 Targeting carbon-neutral aircraft operations New Zealand

Eco-Efficient Aviation • Aviation needs to flourish with reduced environmental impact • Aviation is necessary for development Facts: • 8% Global GDP • 2% man made CO 2 emissions • Over 40 years the focus on innovation has lead to © AIRBUS S. All rights reserved. Confidential and proprietary document. 4 70% reduced aviation fuel consumption and related CO 2 emissions Targets: • Carbon Neutral growth by 2020 • 50% CO 2 reductions by 2050 compared to 2005 Sustainable Aviation Growth with Environmental targets New Zealand Page 2

Background: What Aviation is Proposing CO 2 Growth if we do nothing 1. Technologies, Operations, ATM 2. Additional technology and 3. biofuels 4. Economic measures CO 2 Carbon Neutral Growth 2020 © AIRBUS S. All rights reserved. Confidential and proprietary document. 100 Minus 50% CO 2 by 2050 2005 2010 2020 2030 2040 2050 Four key strategic approaches to reducing CO 2 emissions New Zealand Page 3

Background: What’s Required? • Meet all current safety requirements • Same Aircraft performance considerations • Same properties as Aviation Jet-fuel Kerosene © AIRBUS S. All rights reserved. Confidential and proprietary document. 4 Consistent, thermally stable, 4 High energy content 4 Low freezing point, high flash point. . . • Meets Jet-fuel specifications Any new fuel has to meet the above characteristics New Zealand Page 4

Background: Short/Medium Term Requirement • Use existing airport fuel storage • Common aviation fuel distribution network • With common piping and transport infrastructure / mechanisms • Any alternative should be “drop-in” © AIRBUS S. All rights reserved. Confidential and proprietary document. …. . and mixable with fossil fuel A “Drop-in” solution is required New Zealand Page 5

Where we are: What are the Options? TYPE Conventional (“Kerosene”) Non. Renewable (Fossil) Jet Fuel © AIRBUS S. All rights reserved. Confidential and proprietary document. Renewable Alcohols Bio Esters Hydrogenated Biomass Cryogenic Fuels CTL BIOJET FUELS Ethanol … Liquefied Natural Gas GTL Liquid Hydrogen Fame 10% lower energy content, 35% lower energy content -5°C Freeze point… * FAME =Fatty Acid Methyl Esters Synthetic Fuels BTL Hydrogenated Biomass Oils (HBO) Low energy content per unit volume, Availability, Infrastructure CTL, GTL & BTL =Coal, Gas or Biomass to Liquid Not all options are suitable for aviation today New Zealand Page 6

Alternative Fuels illustrated: FAME (FL limited) © AIRBUS S. All rights reserved. Confidential and proprietary document. JET A-1 FAME starts freezing (if no FL limitation) Ethanol x. TL / HBO (GRU) Guarulhos Intl, Sao Paulo, SP, BR JET A-1, x. TL’s and HBO’s gives the performance as a drop-in New Zealand Page 7

What are the alternative fuels? Potential sustainable feedstocks © AIRBUS S. All rights reserved. Confidential and proprietary document. Algae Salicornia Jatropha Camelina Wood waste Yeast Multi options in different locations New Zealand Page 8

Airbus in the Fuels Approval Process Specification Properties 50% FT 2009 Fuel Approved HBO Engine Safety, Performance and Durability (DEF STAN 91 -91, ASTM D 1655, MIL DTL 83133, MIL DTL 5624) 2010 Research Fit For Purpose 2011 Properties HBO 50% Chemistry, Ground Handling & Safety, Materials compatibility, Electrical Properties, Bulk Physical & Performance Properties Component 2012 Testing 100% FT Fuel Approved © AIRBUS S. All rights reserved. Confidential and proprietary document. Engine Hot Section, Aircraft Fuel System, Engine Combustor Rig Engine Endurance Test Full Scale Engine Rig Test 2013 100% HBO Fuel Approved APPROVAL Airbus supports the Def-Stan and ASTM Approval processes New Zealand Page 9

Airbus GTL* Flights • February 2008 4 Flight test 4~50% GTL 4 A 380 on one engines out of the four • October 2009 © AIRBUS S. All rights reserved. Confidential and proprietary document. 4 First ever commercial revenue flight 4~50% GTL 4 A 340 -600 all engines *GTL = Gas To Liquid Synthetic fuels work and are a precursor for Biofuels New Zealand Page 10

Focus on Value Chain Projects • Airbus acting as a Catalyst for Biofuel commercialisation • Projects that develop the Biofuel value chain in different regions 4 Farmers, Refiners, Investors, Airlines…. • Closed loop process to reduce CO 2 © AIRBUS S. All rights reserved. Confidential and proprietary document. emissions Source: ATAG Biofuels Beginners Guide Develop projects that speed up sustainable commercialisation New Zealand Page 11

© AIRBUS S. All rights reserved. Confidential and proprietary document. Value Chain Projects • • • A detailed implementation plan for 2 nd generation bio-fuel Biofuel production / commercialisation A Biofuel investment strategy An advanced technology development program Ongoing market and strategic analysis • • • Biofuel flight with TAM Quarter 4 2010 Using 50% blend of Brazilian Jatropha A 320 CFMI Engines Aviation Biofuel commercialisation 4 Farmers, Refiners, Investors, Airlines…. • Full sustainability pilot projects with the Roundtable on Sustainable Bio-fuels More projects under development New Zealand Page 12

Where we are: Messages, Issues. . . and Expectations • Alternative Fuels work! • Cross Industry Collaboration is essential • Bio Fuel Commercialisation is 7 – 10 years away too slow • Aviation has limited solutions (Biofuels) • Missing common sustainability analysis. Why invest? © AIRBUS S. All rights reserved. Confidential and proprietary document. • Other industries have alternatives 30% Aviation Biofuels by 2030? New Zealand Page 13

What’s Next? • (Some) R&T already delivered, let’s deploy and implement Common sustainability criteria 4 Lifecycle analysis 4 • More industry wide and Airbus R&T needed on e. g. algae © AIRBUS S. All rights reserved. Confidential and proprietary document. 4 Also building on early industrial experience • Government support through policy and incentives Prioritisation of Energy types for different transport modes 4 Tax incentives / carbon credits 4 New Zealand Page 14

What’s next? • Cross industry approach Aircraft / Engine Manufacturers to provide technical support for qualification 4 Airlines to commit to using and buying bio-fuels 4 • Investors needed! Growing local economies in various world locations 4 Sustainability criteria 4 Joint ventures with airlines and stakeholders © AIRBUS S. All rights reserved. Confidential and proprietary document. 4 Alternative fuels must be commercially viable… New Zealand Page 15

© AIRBUS S. All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS S. A. S. . No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S. A. S. This document and its content shall not be used for any purpose other than that for which it is supplied. The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS S. A. S. will be pleased to explain the basis thereof. © AIRBUS S. All rights reserved. Confidential and proprietary document. AIRBUS, its logo, A 300, A 318, A 319, A 320, A 321, A 330, A 340, A 350, A 380, A 400 M are registered trademarks. New Zealand Page 16

© AIRBUS S. All rights reserved. Confidential and proprietary document. Glossary • • • • GDP ATM ASTM Def-Stan HBO FT GTL CTL BTL RSB FAME ATAG CO 2 CFMI • LCA New Zealand Gross Domestic Product Air Traffic Management American Society for Testing and Materials UK Defense Standard Hydrogenated Biomass Oils Fisher Tropsch Gas To Liquid Coal To Liquid Biomass to Liquid Roundtable on Sustainable Biofuels Fatty Acid Methyl Esters Air Transport Action Group Carbon Dioxide CFM International (Engine joint venture between GE Aviation of the United States and Snecma of France) Life Cycle Analysis Page 17