Qantas and Airbus to establish Sustainable Aviation Fuel industry in Australia

The Qantas Group and Airbus will invest up to US$200 million to accelerate the establishment of a sustainable aviation fuel (SAF) industry in Australia. The Australian Sustainable Aviation Fuel Partnership was signed 19 June by Qantas Group CEO Alan Joyce and Airbus CEO Guillaume Faury in Doha, ahead of the AGM of the International Air Transport Authority (IATA).

The Qantas Group, which has committed to using 10 per cent SAF in its overall fuel mix by 2030, is currently sourcing SAF overseas. This includes 15% of its fuel use out of London currently and 20 million litres each year for flights from Los Angeles and San Francisco to Australia from 2025. Sustainable fuels cut greenhouse gas emissions by around 80 per cent compared to traditional kerosene and are the most significant tool airlines currently have to reduce their impact on the environment – particularly given they can be used in today’s engines with no modifications.

However, due to the lack of an Australian commercial-scale SAF industry, the airline doesn’t acquire these fuels locally. Meanwhile, Australia is currently exporting millions of tonnes of SAF feedstock every year, such as canola and animal tallow, to be made into SAF in other countries.

“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,” said Alan Joyce.

“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. We’ve had some encouraging discussions with the incoming Australian Government given their strong focus on emissions reduction and look forward to that progressing.”

The Qantas and Airbus partnership will invest in locally developed and produced SAF and feedstock initiatives. Projects will have to be commercially viable and meet a strict set of criteria around environmental sustainability, says Qantas.

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

The two partners agreed to work together on the sustainability initiative as part of the airline’s recently announced orders, including the A350-1000 to operate Project Sunrise non-stop flights from Australia to New York and London and the selection of the A220 and A321XLR under the Qantas Group’s Project Winton domestic fleet renewal, as well as 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 from day one and are all already certified for operation using 50 per cent SAF. The Qantas Group Climate Action Plan, released in March 2022, commits the airline group to an interim target of 25 per cent emissions reduction and 10 per cent SAF use in the fuel mix by 2030 and 60 per cent SAF use by 2050.

The partnership is initially for five years with options to extend the duration. Qantas’ financial contribution to the Australian Sustainable Aviation Fuel Partnership includes $50 million previously committed to research and development of SAF in Australia.

Pratt & Whitney, whose GTF engines were recently selected by Qantas for their new A220 and A320neo family aircraft, is also contributing to the venture. The company supports greater use of cleaner, alternative fuels including SAF, while continually advancing the efficiency of aircraft propulsion technology.