Airbus Alternative Fuels27 July 2010

Targeting carbon-neutral aircraft operations

New Zealand

Presented by

Paul Nash – Environmental Affairs

Head of New Energy - Airbus

New Zealand

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Eco-Efficient Aviation

• Aviation needs to flourish with reduced environmental impact

• Aviation is necessary for development

Facts:

• 8% Global GDP

• 2% man made CO2 emissions

• Over 40 years the focus on innovation has lead to 70% reduced aviation fuel consumption

and related CO2 emissions

Targets:

• Carbon Neutral growth by 2020

• 50% CO2 reductions by 2050 compared to 2005

New Zealand

Sustainable Aviation Growth with Environmental targetsPage 2

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Background: What Aviation is Proposing

New Zealand

2005 20502020

100

Carbon Neutral Growth 2020

2030 2040

Minus

50% CO2

by 2050

CO2

2010

1. Technologies, Operations, ATM

2. Additional technology and 3. biofuels

4. Economic measures

CO2 Growth if we do nothing

Four key strategic approaches to reducing CO2 emissionsPage 3

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Background: What’s Required?

New Zealand

• Meet all current safety requirements

• Same Aircraft performance considerations

• Same properties as Aviation Jet-fuel Kerosene Consistent, thermally stable, High energy content Low freezing point, high flash point...

• Meets Jet-fuel specifications Any new fuel has to meet the above characteristics

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Background: Short/Medium Term Requirement

New Zealand

• Use existing airport fuel storage• Common aviation fuel distribution network• With common piping and transport infrastructure /

mechanisms

• Any alternative should be “drop-in”…..and mixable with fossil fuel

A “Drop-in” solution is required

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Where we are: What are the Options?

Non-Renewable

(Fossil)

Renewable

Jet Fuel

CTL

GTL

Hydrogenated Biomass Oils

(HBO)

Low energy content per unit volume,

Availability,

Infrastructure

Cryogenic Fuels

Ethanol … Fame

Hydrogenated Biomass

BTL

Liquefied Natural Gas

Conventional (“Kerosene”)

Alcohols Bio Esters Synthetic Fuels

10% lower energy

content,

-5°C Freeze point…

35% lower energy content

Liquid Hydrogen

TYPE

BIO- BIO- JET JET

FUELSFUELS

* FAME =Fatty Acid Methyl Esters CTL, GTL & BTL =Coal, Gas or Biomass to Liquid

New Zealand

Not all options are suitable for aviation todayPage 6

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Alternative Fuels illustrated: Alternative Fuels illustrated:

LIS

GRU

JET A-1 Ethanol

FAME starts freezing (if no FL limitation)

FAME (FL limited)

xTL / HBO

New Zealand

(GRU) Guarulhos Intl, Sao Paulo, SP, BR

JET A-1, xTL’s and HBO’s gives the performance as a drop-in

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Algae

Jatropha

Salicornia Camelina

Wood waste

Yeast

What are the alternative fuels? Potential sustainable feedstocks

New Zealand

Multi options in different locations

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Airbus in the Fuels Approval Process

APPROVAL

Engine Safety, Performance and Durability

(DEF STAN 91-91, ASTM D1655, MIL DTL 83133, MIL DTL 5624)

Specification

Properties

Chemistry, Ground Handling & Safety, Materials compatibility,

Electrical Properties, Bulk Physical & Performance Properties

Fit For

Purpose

Properties

Engine Hot Section, Aircraft Fuel System,

Engine Combustor Rig

Component

Testing

Engine

Endurance

Test

Full Scale Engine Rig Test

2012

2013

2011

2010

200950% FT

Fuel Approved

HBO 50%

100% FT

Fuel Approved

100% HBO

Fuel Approved

HBO

Research

Airbus supports the Def-Stan and ASTM Approval processes

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Airbus GTL* Flights

New Zealand

*GTL = Gas To Liquid

Synthetic fuels work and are a precursor for Biofuels

• February 2008Flight test~50% GTLA380 on one out of the four

engines

• October 2009First ever commercial revenue

flight~50% GTLA340-600 all engines

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Focus on Value Chain Projects

New Zealand

Source: ATAG Biofuels Beginners Guide

• Airbus acting as a Catalyst for Biofuel commercialisation

• Projects that develop the Biofuel value chain in different regions

Farmers, Refiners, Investors, Airlines….

• Closed loop process to reduce CO2 emissions

Develop projects that speed up sustainable commercialisation

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Value Chain ProjectsValue Chain Projects

New Zealand

• A detailed implementation plan for 2nd 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• A320 CFMI Engines• Aviation Biofuel commercialisation

Farmers, Refiners, Investors, Airlines….• Full sustainability pilot projects with the Roundtable on

Sustainable Bio-fuels

More projects under development

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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?

• Other industries have alternatives

New Zealand

30% Aviation Biofuels by 2030?

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What’s Next?

• (Some) R&T already delivered, let’s deploy and implement Common sustainability criteria Lifecycle analysis

• More industry wide and Airbus R&T needed on e.g. algae Also building on early industrial experience

• Government support through policy and incentives Prioritisation of Energy types for different transport

modes Tax incentives / carbon credits

New Zealand Page 14

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What’s next?

• Cross industry approach Aircraft / Engine Manufacturers to provide technical support

for qualification Airlines to commit to using and buying bio-fuels

• Investors needed! Growing local economies in various world locations Sustainability criteria Joint ventures with airlines and stakeholders

New Zealand

Alternative fuels must be commercially viable…

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New Zealand

© AIRBUS S.A.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, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.

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Glossary

• GDP Gross Domestic Product

• ATM Air Traffic Management

• ASTM American Society for Testing and Materials

• Def-Stan UK Defense Standard

• HBO Hydrogenated Biomass Oils

• FT Fisher Tropsch

• GTL Gas To Liquid

• CTL Coal To Liquid

• BTL Biomass to Liquid

• RSB Roundtable on Sustainable Biofuels

• FAME Fatty Acid Methyl Esters

• ATAG Air Transport Action Group

• CO2 Carbon Dioxide

• CFMI CFM International (Engine joint venture between GE Aviation of the United States and Snecma of France)

• LCA Life Cycle Analysis

New Zealand Page 17