Qantas, Virgin Australia laud budget help for green jet fuel production

Airlines have lauded a series of budget measures which should finally help deliver domestic production of green jet fuel, safeguarding travellers from big fare hikes.

Australia’s biggest airlines have welcomed long-awaited government support for a sustainable aviation fuel industry, calling it critical for the future of affordable air travel.

With the global aviation industry committed to net zero carbon emissions by 2050, sustainable aviation fuel or SAF is in high demand by airlines as the most effective tool for greener flying.

Made from feedstock, agricultural waste and even vegetable oil, SAF is able to be used in most modern aircraft mixed with, or in the place of fossil fuels.

Production is slowly increasing in the US, Europe and parts of Asia but Australia is yet to make a drop, raising concerns local airlines would have to import SAF putting further upward pressure on fares.

After years of lobbying state and federal governments, Qantas and Virgin Australia were relieved to see a number of measures in Tuesday’s budget to accelerate the production of SAF.

They included a $1.7bn investment over ten years to help commercialise low-carbon liquid fuels; $18.5m to develop a certification scheme for low-carbon liquid fuels and $1.5m to analyse the benefits of mandates or other demand-side measures for such fuels.

The government also committed to undertaking targeted consultation to identify possible production incentives in support of a domestic SAF industry.

Virgin Australia chief sustainability officer Christian Bennett said the announcement would put Australia closer to overseas jurisdictions that had been “working at pace to deliver a strong SAF industry”.

“Decarbonisation is critical but we do not want it to come at the cost of affordable travel for Australians,” Mr Bennett said.

“As a value carrier we truly believe we can have both — a sustainable industry that our customers can afford to use.”

Qantas has welcomed government measures to establish a local sustainable aviation fuel industry, saying it would help safeguard the aviation industry.

Qantas group chief sustainability officer Andrew Parker said domestic SAF production would not only shore up the future of the aviation industry, it would mean thousands of new jobs, significant economic growth and improved national fuel security.

“We welcome the government’s intention to progress development of a universal sustainable aviation fuel mandate,” Mr Parker said.

“It’s a critical policy lever to secure capital and investment as well as providing a stable regulatory framework that’s essential to scale a domestic SAF sector.”

He said the right policy settings were critical for countries to produce biofuels onshore, and they “could not take their foot off the pedal”.

“Sustainable aviation fuel is the most effective tool that airlines have to reduce emissions which is why support for domestic SAF production will help safeguard the future of the aviation industry,” Mr Parker said.

Currently Qantas sourced 10 million litres of SAF a year at Heathrow Airport in London, and planned to purchase a further supply in California from 2025.

CEO of Bioenergy Australia Shahana McKenzie also lauded the budget measures, calling them a crucial first step in establishing a SAF industry.

“It will send the signal to global project developers and investors that Australia is the place to do business,” Ms McKenzie said.

“We are already considered a global hotspot given our vast agricultural might and industrial base with the CSIRO reporting that Australia will have enough feedstock in 2025 to replace 60 per cent of local jet fuel with SAF growing to 90 per cent by 2050.”

She said without an urgent focus on renewable liquid fuels, the “immense task of decarbonising Australia’s economy would be near impossible”.

“SAF and renewable diesel are vital to decarbonise cornerstone sectors of our economy beyond 2050, including aviation, marine, mining, heavy haulage, rail, construction, infrastructure and agriculture.”