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Industry applauds 2024 budget’s aviation sustainability funding

written by Jake Nelson | May 16, 2024

Air bp is a supplier of sustainable aviation fuel. (Image: Air BP)

Industry has welcomed a package of measures to support sustainable aviation fuel (SAF) and hydrogen development in the 2024 federal budget.

The Tourism and Transport Forum (TTF), Airbus, and zero-emissions aircraft firm AMSL Aero have all backed the sustainability funding, which aims to promote domestic production of SAF and other green fuels like renewable hydrogen.

The budget includes $1.7 billion over 10 years to support ARENA commercialising net-zero technologies including low-carbon liquid fuels; $18.5 million over four years to develop a certification scheme for these fuels, including SAF; and $1.5 million over two years for analysing costs and benefits of SAF mandates and other demand-side measures. Renewable hydrogen production was also granted a $6.7 billion production tax incentive.

It comes after the government last year announced ARENA would distribute $30 million in grants to support domestic SAF production.

“As part of our Future Made in Australia plan, we will fast-track support for a low-carbon liquid fuel industry, with an initial focus on sustainable aviation fuel and renewable diesel to support emissions reduction in the aviation, heavy vehicle, rail and maritime sectors,” said Transport and Infrastructure Minister Catherine King, Regional Development Minister Kristy McBain, and their respective assistant ministers Carol Brown and Anthony Chisholm in a joint press release.

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According to TTF CEO Margy Osmond, the funding for SAF “sends a strong signal to the industry and investors” that the government is committed to domestic production.

“Consumers are increasingly demanding more sustainable options when they travel and want a greener future for aviation. This extra support will help Australia remain competitive in one of the toughest tourism markets our industry has ever faced,” she said.

“As a long-haul destination, Australia cannot afford to be left behind other developed countries which are prioritising support for SAF, like the USA, Europe, UK, Singapore, Japan and Canada.”

She added that developing a domestic SAF industry would support regional jobs.

“Australia has the potential to become a world-leading supplier of Sustainable Aviation Fuel, with enough feedstock to replace 90 per cent of local jet fuel with SAF by 2050,” she said.

“We applaud the Federal Government for making real progress and giving focus to this issue, initially through the establishment of the Jet Zero Council and by collaborating with industry.”

Stephen Forshaw, Airbus chief representative for Australia, New Zealand & the Pacific, said the measures are a “good first step”.

“Studying the introduction of mandates for the use of SAF is very important. This sends a signal to industry that mandates are coming to Australia like they are in other places like Singapore, Japan and Europe,” Forshaw said.

“If we are to achieve our ambition of becoming a renewable energy superpower, we need to move fast, before other countries entrench their first-mover advantage. We need to move SAF from plans today to planes tomorrow.”

AMSL Aero, which is behind the Vertiia electric vertical take-off and landing (eVTOL) aircraft, has given a thumbs-up to the support for hydrogen, with CEO Max York saying it will “accelerate the country’s race towards sustainable aviation”.

“The Government’s tax credits for green hydrogen production, combined with its Future Made in Australia policy, could have significant positive flow-on impacts for the country,” he said.

“As the designer and maker of Vertiia, the world’s first long range hydrogen-powered vertical take-off and landing (VTOL) aircraft, we welcome any move that supports the proliferation of green hydrogen as a fuel source and makes zero emissions flight widespread.”

CSIRO, in last year’s Sustainable Aviation Fuel Roadmap, developed in concert with Boeing, asserted that Australia has a “moment-in-time opportunity” to develop its own SAF industry, with domestic demand for jet fuel expected to surge 75 per cent by 2050.

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