At IATA’s Annual Meeting in Doha, Qatar on 19JUN22, Airbus and Qantas announced that they would be investing up to USD 200 million in getting Australia’s SAF production off the ground. Up to now, the country has been exporting millions of tons of canola and animal tallow as feedstock to other countries for the production of SAF.
In line with the 2050 net zero emission targets, Qantas has set itself the goal of a 10% SAF-fuel mix by 2030. Despite being the world’s second airline in 2019, to commit to net zero emissions by
2050, it currently has to source its SAF abroad: 15% of its fuel use - 10 million liters per year – comes from BP in London, UK, (until 2024 so far), and 20 million liters per annum will be
sourced from Los Angeles and San Francisco, USA from 2025 onwards.
Biggest customer invests
“The use of SAF is increasing globally as governments and industry work together to find ways to decarbonize the aviation sector. Without swift action, Australia is at risk of being left behind,” Alan Joyce, CEO of Qantas Group, explained. “With this investment, Qantas and Airbus are putting our money where our mouth is and betting on the innovation and ingenuity of Australian industry. Aviation is an irreplaceable industry, especially for a country the size of Australia, and one that’s located so far away from so much of the world […] This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other business […] It makes a lot of sense for us to put equity into an industry that we will be the biggest customer of.” USD 35 million were already committed to by Qantas at an earlier stage. They now make up the joint USD 200 million investment by Qantas and Airbus. Qantas envisages that this money could go to a mix of start-up firms and more established operators.
Airbus invests in its big customer, too
On 02MAY22, Qantas put in an order for 12 A350-1000s, 20 A220s, and 20 A321XLRs; a selection of narrowbody and widebody planes from Airbus, amounting to a multi-billion-dollar investment. These new additions will already be 25% more efficient when it comes to carbon emissions reduction, plus they all certified for operation using 50% SAF. Guillaume Faury, CEO of Airbus, said: “The increased use of sustainable aviation fuels will be a key driver to achieve net zero emissions by 2050. But we can’t do this without viable industrial systems to produce and commercialize these energy sources at affordable rates and near to key hubs around the world. This is especially true for a country like Australia, which is geographically distant and highly reliant on aviation to remain connected both domestically and internationally. The Australian Sustainable Aviation Fuel Partnership reflects the new level of partnership between Airbus and the Qantas Group and our firmly shared commitment to act as catalysts of change to ensure a bright future for our industry.”
Additional investor and a clear report
Raytheon Technologies’ company, engine maker Pratt & Whitney, is also contributing part of the investment, since Qantas has ordered Pratt & Whitney GTF engines for its new A220 and A320neo aircraft. All three have committed to a five-year investment partnership, which may be extend further.
Shahana McKenzie, CEO Bioenergy Australia, who worked on the report brought out by Sustainable Aviation Fuels Alliance of Australia and New Zealand (SAFAANZ) titled Bridging the price gap for Sustainable Aviation Fuel, in March this year, advocated for more governmental support in finally getting SAF produced in Australia. “Beyond emissions reduction, this initiative supports jobs in regional Australia, economic development and fuel security,” she said. “Australia could be the SAF capital of the Asia Pacific region, if we act now.” Heidi Hauf, SAFAANZ Chair, pointed out that “The Bioenergy Roadmap showed that Australia could be producing 18% of the country’s aviation fuel market by 2030 if a favourable policy and market environment existed.”
Yet, despite aviation emissions steadily increasing in Australia over the past decades, and currently account for 4.1% of Australia’s total emissions, the government has been slow to get active. Not so, Australia’s neighbors: Singapore will have the world’s largest sustainable aviation fuel production capacity next year, when Finnish company, Neste, completes its SAF facility in Tuas at the start of 2023. In April this year, New Zealand and Singapore signed Memorandum of Understanding that includes research and development of SAF.
Neste, which is the world largest SAF producer to date, has had an office in Melbourne since NOV19, but it has focused on sourcing feedstock for external production so far. This new Qantas and Airbus partnership will invest in commercially viable SAF initiatives which are locally developed and produced, and which fulfill a strict set of criteria around environmental sustainability.
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