Qantas again says customers will pay more for green fuel

However, Messent pushed for the government to support local production initiatives, emphasising the importance of having a booming local SAF industry.

She said that today, SAF represents about 1 per cent of Qantas’ fuel supply, however, the airline is aiming to increase this to 10 per cent by 2030, pending availability.

“Ultimately, we pick up 70 per cent of our fuel here in Australia, so we do want to see an industry here,” Messent said.

“[However,] we think that government has a role to play in ensuring that the Australian producers are competitive,” she added.

“The risk is that we miss out on economic opportunity here in Australia.”

Speaking on the same panel, Danny Elia, executive director for infrastructure at IFM Investors, said Australia is already trailing behind other countries in its sustainable fuel production endeavours.

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“China announced in the first half of this year 16 new plants in low-carbon liquid fuels, and we’re still sitting here debating this. We’ve really got to get moving,” Elia said.

“That is my ask of all sides of politics – remove the politics out of it and just make a common-sense decision.”

It comes just weeks after both Qantas and Virgin said they will look to increase airfares in an effort to offset the increased fuel costs of utilising SAF, amid several government consultation papers exploring the viability of greener fuel alternatives in the aviation, maritime and freight industries.

It is widely understood that the cost to utilise biofuel blends today, including SAF, is between two and five times higher than traditional jet fuels. 

While consultation is ongoing, the Department of Climate Change, Energy, the Environment and Water agreed that it is possible that a sustainable aviation fuel levy could be introduced to passenger airfares to help airlines recover the cost of utilising greener fuels.

Both consultation papers fall under several broader government initiatives, including the $14.8 billion Fuel Security and Resilience Package, and $1.1 billion Cleaner Fuels Program, which aim to reinforce Australia’s domestic fuel supply and develop on-shore facilities for producing biofuels and sustainable aviation fuels.

Upon announcing these papers in August, Transport Minister Catherine King acknowledged that adopting SAF use in Australia may result in higher airfares for passengers, however, noted that other markets overseas have not seen a major impact.

“It’s a consultation paper, and the final outcomes will depend on what model we have. But experience overseas is that they are very small; they are small impacts overall. But I guess the dynamic is: what do you do if you do nothing?” she said at the time.

“We are, you know, already so heavily reliant on imported fuel, and already, you know, already you’ve seen Qantas and Virgin, for example, start to look at sustainable aviation fuel. Our Defence Force is using it. The fact that we’re not producing here is a significant loss.”

Notably, Qantas and Virgin have long pledged their support for both the use of SAF and the development of local Australian SAF production sites. Both airlines have also previously heralded their pre-established use of SAF in commercial flights.