“Countries with clear regulatory frameworks are understandably attracting greater investment in supply projects,” BP said. “In the short-term, interim support from governments and other stakeholders through policy incentives is needed.”
SAFs usage worldwide is negligible due to its high cost, being two to three times more expensive than petroleum-derived fuel. Larger scale production is considered key to lowering costs to parity with petroleum-based jet fuel.
Qantas will use SAF for about 15 per cent of its fuel use out London’s Heathrow Airport this year (pictured) but it is not available locally.
The International Air Travel Association (IATA), the airline trade body, forecasts SAF could account for 2 per cent of the global industry’s fuel use by 2025, 17 per cent by 2035 and 65 per cent by mid-century. Hitting that target is key to its 2050 net-zero emissions target. The Australian government’s Bioenergy Roadmap, released in November, said that 18 per cent of the Australian aviation industry’s fuel usage could be SAFs by 2030.
A spokesman for Angus Taylor, the Morrison government’s minister for energy and emissions reduction, said the government had supported biofuels to the tune of just under $500 million to date through its Technology Investment Roadmap, and would continue to work with industry to develop lower production costs through its ARENA funding package.
“This technology-led approach is important in developing a sustainable biofuel industry that isn’t reliant on consumer-funded mandates or ongoing subsidies,” the spokesman said.
“Mandates can increase costs for consumers while removing the important ability to choose. This contradicts the government’s position to encourage consumer choice.”
US airlines can earn carbon credits when they use SAFs and the Biden administration last year proposed $1 billion in grants for SAF production facilities and tax credits for SAF usage as part of a plan to uplift production to at least 3 billion gallons a year by 2030.
France has made it compulsory for all flights leaving to the country to fill up their tanks with at least 1 per cent SAF while the European Union has proposed a bloc-wide 2 per cent mandate starting in 2025 and increasing over time.
Qantas committed in 2019 to spending $50 million over 10 years helping to develop a local SAFs industry, and in December entered a contract with BP to provide 10 million litres of SAF at Heathrow Airport this year, which will cover about 15 per cent of its expected fuel use on flights out of London.
Qantas chief executive Alan Joyce said higher oil prices meant high ticket prices.Credit:Rhett Wyman
Mr Joyce, the CEO, said at a conference in Sydney last week that Qantas was close to signing a deal for SAF supply in California, too.
“The problem is we don’t have an industry here,” Mr Joyce said. “Could you imagine an industry here, where you create jobs, you’re buying crops … you’re investing back in agriculture? It could be massive, and we’re missing that opportunity now.”
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