Australian flag carrier Qantas announced today it had signed a second major deal for the acquisition of sustainable aviation fuel. The airline is already fueling flights from London with SAF, and now the turn has come to tap into the available supply in California, one of the world's leading markets for advanced biofuels.
Starting in 2025, US biofuel company Aemetis will supply Qantas with over 35 million gallons of biofuel from certified waste product feedstocks to partially power the carrier's flights from Los Angeles and San Francisco to Australia.
Aemetis will produce the fuel at the company's 90 million gallons per year plant in Riverbank, CA, which is currently under development. It will then be blended with conventional jet fuel to a ratio of 40% SAF and 60% Jet-A fuel. The contract spans seven years. With the inclusion of incentives, it is worth US$250 million. Alan Joyce, Qantas CEO, shared the following statement,
“Climate change is front of mind for Qantas, our customers, employees and investors, and it is a key focus for us as we move through our recovery from the pandemic. (...) We’re actively looking to source sustainable aviation fuel for our operations, and the deal we’re announcing today is hopefully one of many we’ll make as the market catches up to demand globally."
Off-shore SAF only current option
Furthermore, Joyce lamented the lack of availability of sustainable aviation fuel in Australia. Thus far, he said, the airline can only acquire SAF off-shore, as governments in the EU, UK, and the US have been more forthcoming with support for the industry (although many would say not enough).
Qantas has already pledged AU$50 million ($36.3 million) to support the development of a domestic SAF industry and promises to be its biggest customer. Meanwhile, in December last year, the Australian government allocated an additional AU$33.5 million ($24.3 million) to develop and deploy advanced sustainable aviation and marine biofuels, taking the total pledge to AU$110 million ($80 million).
Concerted efforts could see substantial domestic SAF industry
A report commissioned by the Australian Renewable Energy Agency (ARENA) released in November last year suggested that under a Business as Usual scenario, SAF would account for only 18% of jet fuel consumed in Australia by 2050. However, this would grow to 45% with targeted focus and investment. Qantas Group Chief Sustainability Officer Andrew Parker previously shared his thoughts on the effort required,
“Given the importance of aviation to Australia, and the distances we travel, there’s a huge opportunity to build a local SAF industry here. The Qantas Group would be its biggest customer and we’ve already committed $50 million in seed funding, but it’s going to take a concerted effort from industry and government to make this happen.”
Since January this year, Qantas has been partially powering its flights out of London with biofuels supplied by BP. According to an agreement signed by the two parties in December last year, the airline will purchase 10 million liters of SAF in 2022, with options for another 10 million in 2023 and 2024 for flights from Heathrow. This represents about 15% of the carrier's total fuel consumption out of the airport.