Qantas has partnered with European planemaker Airbus to jointly invest US$200 million ($288 million) to escalate the establishment of a local sustainable aviation fuel (SAF) industry in Australia.
Under the new partnership, Airbus and Qantas will jointly invest in local initiatives to produce SAF in Australia, should they meet “strict” criteria around commercial viability and environmental sustainability.
The two companies penned the new five-year deal — dubbed the Australian Sustainable Aviation Fuel Partnership — overnight in Doha ahead of the International Air Transport Association’s Annual General Meeting. The deal has the possibility of being extended and is due to launch later this year.
The deal includes an earlier commitment made by Qantas to invest $50 million towards local SAF production, as the carrier works toward its goal to see 60 per cent of all its fuel be derived from SAF by 2050, alongside an interim goal of 10 per cent by 2030.
According to Qantas, the lack of Australian SAF industry means that Australia today exports millions of tonnes of feedstock per year to be made into SAF at refineries overseas.
Qantas Group CEO Alan Joyce noted that SAF development and usage is increasing around the globe as the industry and governments work together to reduce emissions in aviation.
“Without swift action, Australia is at risk of being left behind,” he said.
“With this investment, Qantas and Airbus are putting our money where our mouth is and betting on the innovation and ingenuity of Australian industry.
“Aviation is an irreplaceable industry, especially for a country the size of Australia, and one that’s located so far away from so much of the world. Future generations are relying on us to get this right so they too can benefit from air travel.”
It comes after Qantas placed a firm order with Airbus for 12 A350-1000s, to use on its highly-anticipated Project Sunrise program, which offers direct flights from Australian east coast cities to London and New York.
Qantas also selected Airbus as the supplier of its domestic fleet renewal under Project Winton, replacing its Boeing 737 and 717 aircraft with A321XLR and A220s.
Joyce continued, and said that the joint investment will “help kickstart a local biofuels industry in Australia” and encourage additional investment from governments and other business.
“It makes a lot of sense for us to put equity into an industry that we will be the biggest customer of,” he said.
“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.”
Meanwhile, Airbus CEO Guillaume Faury said “The increased use of sustainable aviation fuels will be a key driver to achieve net zero emissions by 2050.
“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 Australian Sustainable Aviation Fuel Partnership reflects the new level of partnership between Airbus and the Qantas Group and our firmly shared commitment to act as catalysts of change to ensure a bright future for our industry,” he added.
The news comes two months after the Queensland Government announced the first Australian refinery for sustainable aviation fuel and renewable diesel will soon open its doors in Gladstone, run by Melbourne-based company Oceania Biofuels.
It will use locally sourced waste and sustainable feedstocks including tallow, used cooking oil, and canola to produce over 350 million litres of sustainable fuels for aircraft and vehicles per year.
The plant itself is being designed to operate on a zero-waste production model using green electricity, renewable hydrogen and carbon offsets, with construction to begin in early 2023.
The plant is planned to be fully operational by 2025.