Qantas to build sustainable aviation fuel industry in huge $288m move

Despite a flurry of criticism over its performance, Qantas has decided to try to turn its luck around by unveiling a major – and impressive – plan.

Despite a flurry of criticism over its performance in recent times, including poor on-time performance and flight cancellation figures, Qantas is attempting to turn its luck around with a major announcement today.

The airline has unveiled a US$200 (AUD$288) million deal with aviation giant Airbus to fast track a sustainable aviation fuel (SAF) industry in Australia. The fuel would be made from agricultural waste and feedstock.

The agreement is in line with Qantas’ target of using 10 per cent SAF in its fuel mix by 2030, rising to 60 per cent by 2050, and was announced on the sidelines of global airline industry body IATA’s annual meeting in Doha.

The five-year deal will see investment in locally developed and produced SAF and feedstock initiatives. Currently, the airline sources SAF from the UK and US but says local production is needed to meet emissions targets.

The focus on SAF comes amid skyrocketing fuel prices, which is expected to add another $1.8 billion to Qantas’s costs.

The deal comes after the airline placed a multi-billion dollar order for Airbus planes last month, including the A350-1000 to operate non-stop flights from Australia to New York and London and the selection of the A220 and A321XLR for the domestic fleet renewal, and lower emission aircraft for its subsidiary Jetstar.

The new fleet will offer a significant reduction in fuel consumption and carbon emissions of up to 25 per cent, and are all already certified for operation using 50 per cent SAF.

Qantas is taking action on sustainable fuel. Picture: Steve Pohlner

Speaking from Doha, Qantas CEO Alan Joyce said the use of SAF is increasing globally and Australia needs to take action.

“With this investment Qantas and Airbus are putting our money where our mouth is and betting on the innovation and ingenuity of Australian industry,” Mr Joyce said.

“This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other business and build more momentum for the industry as a whole.

“It makes a lot of sense for us to put equity into an industry that we will be the biggest customer of.

“We’re calling on other companies and producers to come forward with their biofuel projects. In many cases, this funding will be the difference between some of these projects getting off the ground.

“The aviation industry also needs the right policy settings in place to ensure the price of SAF comes down over time so that the cost of air travel doesn’t rise.”

Mr Joyce said Qantas has had some “encouraging” discussions with the incoming Australian Government, given their strong focus on emissions reduction.

Qantas says a local industry is needed. Picture: Andrew Henshaw

Airbus CEO Guillaume Faury said ensuring a sustainable future for the industry is a priority for Airbus.

“The increased use of sustainable aviation fuels will be a key driver to achieve net zero emissions by 2050,” Mr Faury said.

“But we can’t do this without viable industrial systems to produce and commercialise 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.”

Australia has been exporting millions of tonnes of canola and animal tallow to other countries for their SAF production.