The huge company that owns Aer Lingus and British Airways is making a 'transformational' investment into a Teesside company.

IAG believes Wilton-based Nova Pangaea Technologies is a crucial pathway to the production of Sustainable Aviation Fuel (SAF).

NPT’s innovative technology converts agricultural waste and wood residue feedstocks into second-generation bioethanol, which can then be processed into SAF.

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IAG’s investment will progress the development of ‘NOVAONE’, NPTs first waste-to-fuel commercial-scale production facility, and the UK’s first of its kind.

Construction is expected to begin later this year, with the facility producing biofuels by 2025, creating long-term employment opportunities in the region.

The Northern Echo: Sarah EllerbySarah Ellerby (Image: Press release)

Sarah Ellerby, Chief Executive of Nova Pangaea Technologies, said: “This is a transformational milestone, and a real endorsement of the crucial work Nova Pangaea Technologies is doing. We are delighted to be adding IAG – one of the foremost names in the aviation industry - to our shareholder register.

“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.”

Nova Pangaea, Alfanar and now Willis Aviation are the three Teesside companies leading the charge towards SAF, along with several others in the UK preparing to contribute towards the country’s domestic SAF production, which would help the industry decarbonise. The UK’s SAF mandate requires at least 10 per cent jet fuel to be made from sustainable feedstocks by 2030. This represents 1.2 million tonnes of fuel (1.5 billion litres).

Total global production of SAF in 2022 was estimated to be 450 million litres, which means total global supply would have to more than triple just to meet the UK's mandate. Facilities like the one Nova Pangaea Technologies is constructing here will be vital in meeting this demand.

The Northern Echo: Jet engine technology is changing radicallyJet engine technology is changing radically (Image: Press release)

IAG also plans to harness NPT’s technology to support the decarbonisation of the other airlines in its group. The project is part of IAG’s investment programme in SAF, which at the end of 2022 amounted to $865 million in future SAF purchases and investments (based on assumed energy prices), with agreements in place for 250,000 tonnes of SAF, 25 per cent towards its target of one million tonnes by 2030.

This comes as IAG seeks to secure further UK SAF supply ahead of the introduction of the UK Government’s SAF mandate, which is expected to be introduced from 2025.

IAG was the first European airline group to commit to the use of 10 per cent SAF by 2030, and its intention to be net zero by 2050.

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Luis Gallego, IAG’s CEO, 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.

“At IAG, we have set a goal to use 10 per cent SAF by 2030.  And 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.”

Tees Valley mayor Ben Houchen described the plan as a “huge coup for Teesside, bringing more of the cleaner, safer and healthier jobs of the future”.

“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.”