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Airbus, Qantas Close to Making First Joint Investment in Sustainable Aviation Fuel

The Australian flag carrier and aircraft manufacturer are set to begin a $200 million investment to enhance Australia's SAF industry

by Lauren Smith

March 1, 2023

Photo: Courtesy of Qantas

Airbus and Qantas will shortly reveal which early-stage sustainable aviation fuel (SAF) projects will receive the first investment from a $AU300 ($200) million fund to kickstart the biofuels industry in Australia.

The European aircraft manufacturer and Australian flag carrier established the fund last year as Qantas set a target of using 10% SAF in its fuel mix by the end of the decade and placed a multi-billion dollar order with Airbus for new planes.

Qantas is already using SAF in its planes, but the lack of a homegrown biofuels industry means it’s forced to purchase it at overseas airports. Meanwhile, Australia is exporting millions of tonnes of feedstock for SAF, such as canola and animal grease, to other countries because it doesn’t have a commercial-scale SAF industry.

Photo: Courtesy of Pandu Agus Wismoyo / Unsplash

Qantas chief sustainability officer Andrew Parker said the airline could meet its 2030 target solely by purchasing SAF in California and the UK but noted 70% of its total fuel is sourced from Australia—a trend it would like to continue.

That will require growing Australia’s SAF industry from seed, but Parker believes, with investment, local production could be achieved by the second half of the decade. Qantas is prepared to provide some of that investment.

“We know we have to play a lead role in developing a domestic industry,” he said earlier this month.

Now Airbus is suggesting that the fund is closing in on a million-dollar deal to support its first early-stage SAF project in the region.

Stephen Forshaw, Airbus’ regional chief representative, said his company and Qantas are meeting weekly to discuss the project.

Photo: Courtesy of Qantas Airways

“The first investment has been made but not fully closed yet,” he told reporters ahead of the Australia International Airshow. “We’ve both agreed to it, and I think we’ll make some announcements probably in the next month or so around the completion of that.”

Some of the projects supported will be in the early stages of development, and the investment could constitute seed funding, with Airbus and Qantas taking minority stakes, he suggested.

“Some of them may be even earlier than Series A. What it may do is provide us with the opportunity or right of first refusal to go in at Series A or Series B or beyond. And then the pace will determine whether we want to do that or whether we see it is time to open it up to other investors,” he elaborated.

SAF is produced from non-fossil fuel sources, known as feedstock, including cooking oil, plant oils, municipal waste, waste gases, and agricultural byproducts. Compared to traditional kerosene, SAF can cut an aircraft’s greenhouse gas emissions by around 80% and is seen as the most important tool for reducing air travel’s carbon footprint.

Qantas aims to use 60% SAF in its fuel mix by the middle of the century to meet its 2050 net-zero target.