The Australian Renewable Energy Agency (ARENA), a governmental organisation, has launched a $30 million initiative to spark the incubation and development of a sustainable aviation fuel (SAF) industry in Australia.
While the Australian aviation industry is responsible for an estimated 1 per cent of the nation’s greenhouse gas emissions, according to a McKinsey & Co forecast, sustainable aviation fuel (SAF) has the potential to reduce global aviation emissions by up to 30 per cent by 2030.
But while demand for SAF is surging worldwide, supply lags, especially in Australia, where we currently do not produce any sustainable aviation fuel.
However, the more optimistic news is that Australia reportedly has substantial potential in renewable feedstocks that can be channelled to fulfil both domestic and global SAF supply needs.
It’s an opportunity that the Qantas Group has been vocal about lobbying for in recent months, urging the Australian Government to implement an SAF blending mandate to boost local SAF production.
To further demonstrate its commitment, the Qantas Group launched its own $400 climate fund in May to support sustainability projects and technologies as the airline strives to meet its emissions reduction targets with the help of SAF.
It’s hoped that this new government funding initiative will help spark the incubation and development of a SAF industry in Australia that will leverage renewable resources as its basis.
The intent behind the initiative is to scrutinise the complete supply chain, from the sourcing of renewable feedstock to the end-stage fuel production. By doing so, the SAF initiative hopes to uncover and understand the essential elements needed to establish and expand a local SAF industry.
ARENA will consider applications for grant funding ranging from $1 million to $30 million through a two-stage application process. The focus is on projects demonstrating commercial or pre-commercial SAF production, and the allocated funds will aid in project development activities or be used for preliminary demonstrations at a pilot scale.
What happens if Australia doesn’t push ahead with local SAF production?
Due to a commercial-scale SAF industry currently being absent in Australia, Qantas is having to source SAF from overseas, including 10 million litres for flights out of London in 2023 and 20 million litres per year for flights out of California from 2025.
Which is itself both unsustainable and economically unviable.
As such, domestic SAF production is integral to Qantas Group’s aim of integrating 10 per cent SAF into its total fuel mix by 2030 and approximately 60 per cent by 2050.
Commenting on Qantas’ Climate Fund program in May, Qantas Group Chief Sustainability Officer Andrew Parker said, “Several of the countries we fly to have already committed to blending mandates of 5 to 10 per cent by 2030, and others are well on the path to introducing one. Australia has significant advantages for SAF production, and there’s a great opportunity to create a new domestic industry.
“Without the right policy settings and signals, we will see investment, projects and feedstocks move offshore to places with specific policy support. We look forward to working with government and the rest of the industry to ensure we capitalise on this opportunity for Australia,” added Mr Parker.
According to ARENA’s Bioenergy Roadmap, sustainable aviation fuels generated from renewable biomass could cater for up to 19 per cent of Australia’s aviation fuel needs by 2030.
Published in 2021, the roadmap also suggested that a local bioenergy industry could boost GDP by around $10 billion by 2030 and create an additional 26,000 jobs.
Expressions of interest for the SAF initiative are now open and will remain so until 1 November 2023.
For more information, head to: www.arena.gov.au
