Airbus and Australian flag carrier Qantas have agreed to invest up to $200m to expedite the development of the sustainable aviation fuel (SAF) sector in Australia.

The deal will help Australia produce SAF locally, instead of exporting feedstock, including canola and animal tallow, to be made into SAF in other countries.

Qantas has committed to using 10% of SAF in its overall fuel mix by 2030 and is currently sourcing SAF from overseas markets, including 20 million litres annually for flights from Los Angeles and San Francisco, US, to Australia from 2025 as well as 15% of its fuel from London, UK.

The two companies agreed to work together on the sustainability element of Qantas’ most recent orders, which are certified to run with 50% SAF.

The new fleet will include lower emission planes for the company’s Jetstar unit and A350-1000 aircraft that will run non-stop flights from Australia to New York and London. These are expected to cut down fuel and carbon discharge by up to 25% from day one.

Qantas Group CEO Alan Joyce said: “The use of SAF is increasing globally as governments and industry work together to find ways to decarbonise the aviation sector. Without swift action, Australia is at risk of being left behind.

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By GlobalData

“With this investment, Qantas and Airbus are putting our money where our mouth is and betting on the innovation and ingenuity of Australian industry. 

“This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other businesses and build more momentum for the industry as a whole.”

Joyce further noted that the investment will create new employment opportunities in the region.

Qantas said that it has already initiated talks with its corporate customers about their interest in accessing SAF offsets for their organisation’s flying.

Airbus CEO Guillaume Faury said: “Ensuring a sustainable future for our industry has become the priority for Airbus and we are taking up this challenge with partners across the world and from across all sectors.”

“The increased use of SAF will be a key driver to achieve net-zero emissions by 2050.

“The agreement we are signing with Qantas today reflects the new level of partnership between our two companies and our firmly shared commitment to act as catalysts of change to ensure a bright future for our industry.”