Australia lagging behind global fuel counterparts, industry warns

Published Mon 22 Jan 2024

The Australian

The Albanese government is being urged to immediately implement strategic policies to stimulate the supply and demand of sustainable aviation fuel in a bid to drive down emissions in the aviation sector.

A coalition of Australia’s leading feedstock providers, global sustainable aviation fuel producers, airlines and airports are pushing the federal government to fast-track policies to facilitate the establishment of a domestic sustainable aviation fuel industry, as industry warns Labor must show national leadership or risk Australian airlines being held hostage to global energy market shocks.

Sustainable aviation fuel is produced from a variety of biogenic sources – such as used cooking oil, council waste and agricultural residues – and has the potential to reduce emissions by up to 80 per cent compared with conventional jet fuel.

Demand is increasing after airlines including Qantas, American Airlines, British Airways, ­Cathay Pacific and Japan Airlines committed to using 10 per cent of the fuel in their overall fuel mix by 2030 and 60 per cent by 2050 as part of the aviation sector’s global pledge for net zero by 2050.

Without a domestic sustainable fuel sector, Australian farmers are locking in long-term contracts with international competitors, including the US, UK and Japan, to export feedstock overseas to be refined into fuel.

Bioenergy Australia chief executive Shahana McKenzie said policy certainty from government was urgently required to help deliver on an industry target of 10 per cent sustainable aviation fuels by 2035.

Industry groups and companies backing the push include GrainCorp, Neste, BP, Australian Institute of Petroleum, Airbus, Qantas, Virgin, Ampol, Exxon Mobile, Viva Energy, Bioenergy Australia, Air New Zealand and Deloitte.

Ms McKenzie said Australia was uniquely placed to develop a domestic industry given its access to high quality feedstocks and suitable climate conditions.

“The key players are in alignment, from farmers to refiners, from airports to airlines, giving governments a clear pathway to create a flourishing domestic SAF industry,” Ms McKenzie said.

“We need co-ordinated policies to stimulate both demand and supply, to avoid the negative unintended consequences experienced in nations that have pursed an ‘either or’ approach.”

Bioenergy Australia, the peak body for biofuels, estimates domestic production of green fuels would see the national economy $3bn better off and help prevent airlines from being wholly ­reliant on overseas producers, and is calling on the commonwealth to capitalise on Australia’s large supply of feedstocks.

The industry group told Labor’s Jet Zero Council at a meeting at Western Sydney airport on Tuesday the council must consider urgent demand-side policies linked to carbon intensity, such as a low carbon fuel standard or renewable fuel mandate.

The body also advised the council it must establish development grants to support new projects and underwrite projects to drive down manufacturing costs.

Bioenergy Australia warned Australia lagged behind its international counterparts in the development of sustainable fuels, forcing domestic feedstock providers including farmers to export stock overseas.

A failure to act could see Australia fail to meet its net zero targets, due to a national reliance on aviation and a lack of suitable alternatives to cut emissions.

The Commonwealth Scientific and Industrial Research Organisation’s sustainable aviation fuel road map estimates demand for jet fuel will increase by 75 per cent out to 2050, highlighting the need to create a viable alternative to help the sector cut emissions.