Airbus, Qantas pin green jet fuel hopes on Climate Tech Partners with $15m backing

Airbus and Qantas have backed a new climate VC to prime early-stage sustainable aviation fuel start-ups for their own later direct investment.

Airbus’ Stephen Forshaw.

Australia risks having to export its feedstock and import it back as sustainable aviation fuel if the country fails to establish a viable production market, Airbus Australian chief representative Stephen Forshaw has warned.

Failure to get local production off the ground by the late 2020s would be a significant loss for the nation — which government and industry alike had earmarked as ripe for production — with an abundance of feedstock that can be used alongside biomass and used cooking oil to make SAF.

“What keeps me awake at night, frankly, is that we are a feedstock rich country and if we don’t move fast, our feedstock will be soaked up by overseas refineries,” Mr Forshaw told The Australian.

“ … And we will become an exporter of feedstock to someone else overseas who will add value to that feedstock, by refining it and producing SAF, and then being a huge aviation market we will have to reimport what comes back as aviation fuel.

“That means we miss a huge economic opportunity, and it means we will continue to rely on imports to sustain our Aviation industry. Neither of those are acceptable to us.”

Mr Forshaw spoke to The Australian as Airbus and Qantas on Monday signed a $15m investment into Climate Tech Partners, a relatively new venture capital fund set up by Patrick Sieb and Tom Kline. The pair had run Investible’s $35m climate tech fund – backing 18 start-ups – prior to leaving to start their own firm.

Qantas has committed to use 10 per cent of SAF in its fuel mix by 2030 and 60 per cent by 2050, and is currently using 10 million litres of SAF on flights out of London. It plans to use the greener fuel on flights out of the US in 2025.

The investment in CTP came from a $US200m ($332m) Sustainable Aviation Fund established by Airbus and Qantas in 2022. To date it’s made just three investments, including Monday’s into CTP, after both companies have struggled to find mature start-ups in the space. It has put some funding into research.

Its second investment was into Townsville start-up Jet Zero Australia, which raised $29m in March last year, including participation from Japanese petroleum company Idemitsu Kosan Co, to develop a SAF fuel project capable of producing up to 102 million litres annually as well as 11 million litres of renewable diesel.

Australia currently doesn’t produce any SAF and demand for aviation fuel is expected to reach 10 billion litres per year by 2030, Mr Forshaw said.

“Even 1 per cent of that is 100 million litres … that’s one Jet Zero Australia Refinery,” he said.

“I would love to say that we’re producing SAF today, but we’re not, and we know the pathway to get there is still going to take some time.”

Climate Tech Partners founders Tom Kline and Patrick Sieb.

Both companies had turned to CTP hoping the new fund could back suitable SAF start-ups at an earlier stage and help them reach a level where corporates could safely invest, Mr Forshaw said.

CTP co-founder Patrick Sieb said the fund was up for the job and that it had already “mapped out 140 start-ups globally that focus on SAF and of those, 37 are directly in our sweet spot”.

CTP would look to lead or co-invest in Series A capital raises. The firm was also working with Investible and other VC funds to scout earlier stage SAF start-ups.

“It’s a vibrant space where there’s a lot of different technologies like feedstock. It’s not just the SAF technology itself, it could be start-ups that are producing biomass or algae among other things that can go into the SAF process,” Mr Sieb said.

Climate start-ups typically struggled to convince investors their ideas and technology were safe and often struggled to get a foot in the door to have the right meetings, CTP’s other co-founder Tom Kline said.

The firm was looking to solve that issue by establishing 10 partnerships with major corporations including Airbus and Qantas, taking their input to make sure it was backing the right start-ups and to know its portfolio companies would later be able to secure larger investment, he said.