Australian flagship air carrier Qantas and European aviation powerhouse Airbus signed a partnership to invest up to $200m to fast-track the establishment of a sustainable aviation fuel (SAF) industry in Australia on June 19, during the International Aviation Transport Association (IATA) annual meeting in Doha, Airbus announced in a statement.

“This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other businesses, and build more momentum for the industry as a whole,” Qantas Group CEO Alan Joyce said. 

In collaboration with the European aircraft manufacturer, the partnership will help Qantas reach an existing commitment to using 10% of SAF through sustainable biomass and feedstock on its aircrafts by 2030.  

Australia is the 10th-largest recipient of foreign direct investment (FDI) in clean technologies since January 2016, according to fDi Markets. Clean technology includes any process, product or service that reduces negative environmental impacts through energy efficiency improvement, sustainable use of sources or environmental protection activities. Such FDI into Australia skyrocketed from $2.6m in 2020 to $26bn in 2021.

The five-year partnership will provide funding for the local production of SAF and the production of biomass feedstock for the production of biofuels. Qantas has already committed to A$50m ($34.8m) to research and development of SAF in Australia, as part of a total $200m investment. If successful, there is possibility for the partnership to be extender. 

“We want SAF to come from Australia feedstock, but we want it to be produced in Australia,” Mr Joyce said at the IATA media conference.  

Australia does not currently have an SAF industry, and is exporting millions of tonnes of feedstock, such as cooking oil, council waste and animal tallow, to be made into SAF in other countries.

Mr Joyce did not clarify how the company is going to collect feedstock, but he said Inpex, a Japanese oil company, and ANZ, an Australian–New Zealand banking group — a company it has has done business with — “has the potential” to produce feedstock for SAF.

Airbus CEO Guillaume Faury said we need SAF with “viable industrial systems to produce and commercialise these energy sources at affordable rates” to achieve net-zero targets by 2050, “especially for a country like Australia”, which is geographically distant and highly reliant on aviation to remain connected both domestically and internationally.

Whereas traditional jet fuel has a high carbon footprint, SAF reduces carbon emission by 80% compared to conventional jet fuel, without modification of conventional jet engines. The IATA said SAF will be the only energy solution to mitigate the emissions growth of the industry in the medium term.

Qantas has signed an agreement with UK-based oil major bp to purchase 10m litres of SAF in 2022, with an option to buy up to another 10m litres in 2023 and 2024 for flights from Heathrow Airport. This represents up to 15% of the airlines annual fuel use out of London.

Alan Joyce said at the IATA media conference on June 19 that the company has already purchased SAF for San Francisco and LA flights coming online by 2030. The news comes after Qantas announced on May 2 that it plans to launch the world’s first direct commercial flights from Sydney to London and New York by the end of 2025.