‘ALP must act’ on green fuel for jets

The federal government must ­develop a sustainable aviation fuel industry or risk leaving Australian airlines hostage to global energy market shocks, industry has warned.

Australia’s lack of production capacity will leave domestic airlines, including Virgin, Jetstar and Rex, forced to import fuel.

The federal government must ­develop a sustainable aviation fuel industry or risk leaving Australian airlines hostage to global energy market shocks, industry has warned.

Bioenergy Australia says domestic production of green fuels would see the national economy $3bn better off and help prevent airlines from being wholly ­reliant on overseas producers, as it called for the commonwealth to capitalise on Australia’s large supply of feedstocks.

Sustainable aviation fuel is produced from a variety of biogenic sources – such as used cooking oil, council waste and agricultural residues – and has the potential to reduce emissions by up to 80 per cent compared with conventional jet fuel.

Demand is increasing after airlines including Qantas, American Airlines, British Airways, ­Cathay Pacific and Japan Airlines committed to using 10 per cent of the fuel in their overall fuel mix by 2030 and 60 per cent by 2050 as part of the aviation sector’s global pledge for net zero by 2050.

Without a domestic sustainable fuel sector, Australian farmers are locking in long-term contracts with international competitors, including the US, UK and Japan, to export feedstock overseas to be refined into fuel.

Bioenergy Australia chief executive Shahana McKenzie said Australia could be the “fuel bowl for the rest of the world”, and called for the federal government to build a domestic industry as a priority. The peak body estimates a domestic fuel industry would be a $3bn boost to GDP per annum and would create about 8000 new jobs by 2030.

“We need to send a clear signal to the global market to make sure Australia is not just going to be a fuel bowl, but that we are producing fuel in Australia to service our own market but also exporting to other countries who don't have the luxury,” Ms McKenzie said.

“For that to happen we need the government to have this as their flagship industry moving forward.

“The most ridiculous part about it is that they would be using our feedstock, and it means we are putting ourselves in the same position as where we are with LNG, where we are selling the inputs, in this case feedstock, into other jurisdictions to refine them, which has left us vulnerable to shocks in global prices.”

The Albanese government’s October budget included funding for a “jet-zero” council to support the creation of a sustainable ­aviation fuel market.

The Queensland government has also signalled support for a domestic sector, holding a roundtable last week with industry representatives including Boeing, Qantas, Virgin, Brisbane Airport Corporation, Ampol, Australian Sugar Milling Council and ­Bioenergy Australia.

Australia’s lack of production capacity will leave domestic airlines, including Virgin, Jetstar and Rex, forced to import fuel.

Qantas has entered into an agreement to purchase sustainable fuel from airports in Los Angeles and San Francisco from 2025.