Australia must move on SAF by end-2025: Airbus

Australia faces losing supplies of agricultural feedstocks required for its sustainable aviation fuel (SAF) sector if it fails to develop policies for the emerging industry, warns the domestic arm of European aircraft manufacturer Airbus.

Capital is poised to invest but Australia has just 12-18 months to set supply and demand side targets for the fuel's use or risk losing feedstock to nations with legislated mandates, the chief representative of Airbus Australia Stephen Forshaw told the Financial Review ESG Summit in Sydney.

"Singapore is moving so much faster than us. They've already got their first refinery in Singapore with capacity to produce 1bn litres/yr. Where's the feedstock going to come? From Australia? From other places in southeast Asia? They want to harness our feedstock," Forshaw said on 4 June.

Australia, the world's eighth-largest jet fuel consumer, lacks a blending target unlike regional aviation heavyweights Japan with its non-binding 10pc SAF target by 2030 and Singapore with its 1pc initial mandate from 2026. Australia presently imports most of its jet fuel, mainly from Singapore and South Korea, with domestic refineries producing 21,000 b/d in 2023 or 14pc of the 153,000 b/d in sales for the year.

A target for an initial 1-1.5pc SAF blend at airports while de-risking capital investment on the supply side with tax incentives similar to those offered to Australia's hydrogen developers is needed, Forshaw said, acknowledging that little of the $200mn promised by Airbus and Australian airline Qantas in 2022 has been invested because of the immaturity of the Australian market.

Australian bioenergy firm Jet Zero is emerging as the likeliest initial project in Australia, progressing its 102mn litres/yr SAF plant at Townsville in northern Queensland state by raising A$29mn ($19mn) from investors including Qantas and Airbus for its Project Ulysses. The plant will use LanzaJet's alcohol-to-jet fuel technology and convert bioethanol made from sugarcane by-products into SAF and renewable diesel.

Considerable acreage in Australia historically considered non-arable has been earmarked for use in the longer term, growing crops such as agave and hemp as a SAF feedstock but rotational crops could also provide communities with alternative incomes streams through biofuels.

By Tom Major