Boeing Australia president Brendan Nelson says the local aviation sector will be held “hostage to international markets” if the nation is unable to kickstart a domestic sustainable fuel industry quickly enough.

Speaking in Sydney on Thursday, Dr Nelson said Australia already produced feed stock used to create biofuels in other parts of the world and was paying “seriously inflated” costs to import the fuels back in – an issue that will only become worse as airlines rely far more on alternative fuel products.