Qantas and Airbus to develop a sustainable Australian aviation fuel industry

Qantas Airways and Airbus plan to invest up to $200 million, which could go to a mix of startups and more established operators

DOHA, Qatar – Qantas Airways and Airbus announced on Sunday June 19 that they will invest up to $200 million to accelerate the development of a sustainable aviation fuel (SAF) industry in Australia to help achieve the airline’s goal to reduce carbon emissions.

The deal, announced on the sidelines of the International Air Transport Association (IATA) annual meeting in Doha, is in line with Qantas’ target to use 10% SAF in its fuel blend by 2030 and comes after placing a multibillion-dollar order for Airbus narrowbody and widebody jets last month.

The global airline industry, which aims to achieve net zero emissions by 2050, is counting on the use of SAFs to grow from around 100 million liters (26 million gallons) per year in 2021 to at least 449 billion liters per year within three decades, a mammoth and costly undertaking.

Qantas sources SAF from London and Los Angeles, but not Australia.

“The problem is that there is no sustainable aviation fuel industry in Australia and we would like to buy it on a large scale,” Qantas chief executive Alan Joyce told reporters. “We think the way to do that is to put our money where our mouth is.”

The investment, which includes A$50 million ($35 million) in funding previously committed by Qantas, could go to a mix of start-ups and more established operators and could include equity investments, said Joyce.

The funding will be split between Qantas and Airbus with a smaller contribution from Raytheon Technologies engine maker Pratt & Whitney, he added. Qantas has ordered Pratt & Whitney engines for its new Airbus narrow body fleet.

Airbus CEO Guillaume Faury said the deal with Qantas was ‘unique’ due to its recent plane order and Australia’s isolated location and should not be replicated with others Airlines companies.

The SAF investment partnership will last for five years with an option to extend, the companies said.

Joyce said he hoped this would encourage the Australian government to improve the policy framework and help fund the development of a local SAF industry.

He said Qantas had had promising initial talks with the new centre-left government elected last month. – Rappler.com

$1 = 1.4430 Australian dollars

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