The Australian government has prioritised decarbonisation of air transport in its newly-released Aviation Green Paper, ‘Towards 2050’ (AGP50), which lays the foundations for the nation’s aviation policy over the next decades. The document identifies key issues and calls for industry and public submissions to help shape a long-term strategy, which will be unveiled next year in the government’s Aviation White Paper. AGP50 highlights the importance of sustainable aviation fuel and both electric and hydrogen propulsion technologies in reducing emissions from aircraft operations, while expecting all emitters in the aviation industry – not just airlines – to contribute to net zero commitments. Meanwhile, the nation’s largest airline company, the Qantas Group, has said it will increase its SAF commitments to as much as 500 million litres per year from 2028, in partnership with aircraft manufacturers Airbus and Boeing, from which it has just placed firm orders  for 24 new widebody jets.

The Aviation Green Paper was launched by Catherine King, the national Minister for Infrastructure, Transport, Regional Development and Local Government. The focus on decarbonising Australia’s air transport forms part of the government’s broader 2030 programme to reduce carbon emissions by 43% below 2005 levels, enroute to its target of net zero emissions by 2050. “The Covid-19 pandemic resulted in the largest shock the aviation industry has ever experienced,” said King. “The next challenge is decarbonisation.” 

The Green Paper identifies four key pathways to decarbonise flight operations – primarily SAF, followed by fleet renewal, electric and hydrogen aircraft propulsion and air traffic management. Airports and other areas of the aviation industry, including airport service providers such as catering, security, safety, refuelling and aircraft support and maintenance, are all expected to rise to the net zero challenge.

According to the 224-page document, Australia could develop a diversified portfolio of locally-produced feedstocks to help establish a domestic SAF industry, but acknowledges large volumes were instead being exported to SAF producers in other countries, and that Australia’s lack of refining capacity reduced opportunities to develop renewable fuel.

However, it adds: “Large landmass, temperate climates, advanced farming practices and established land transport supply chains are potential assets to develop a range of biogenic feedstocks. These comparative advantages can be seen in Australia’s current production and export volumes in oilseeds, sugars and agricultural residues. 

“A situation where Australian-produced feedstock is exported internationally under long-term supply contracts could undermine feedstock use by Australian refiners and operators, and result in Australia missing out on the economic and sustainability benefits of domestic SAF production.”

Hydrogen propulsion is promising though “unlikely to enter widespread deployment until earliest 2035, with 2040-2050 more likely,” observes AGP50, while electric propulsion is expected for low-capacity, short-range flights by the early 2030s.

“Using new fuel such as hydrogen for longer-haul flights would face significant technological and supply chain challenges, such as developing onboard hydrogen storage and establishing large-scale green hydrogen production and distribution. Creating refuelling and recharging infrastructure and large-scale manufacturing capabilities will require time and investment, and costs are currently unclear.”

The Green Paper acknowledges the role of high-quality offsets as a means of achieving net emission reductions “rather than a measure to decarbonise aviation,” and notes demand had grown with net zero targets. It added: “Offsets will play a role in the near term as other technologies scale and in the long term to address residual CO2 emissions. However, social impact challenges remain about quality and transparency of offsets and reliability of accounting data.”

Under reforms to emissions safeguard mechanisms in Australia, emissions limits, or baselines, for Australia’s largest-emitting airlines will reduce by 4.9% per year, says the white paper, “creating demand for abatement options such as SAF, fleet renewal and the use of high-quality offsets.”

As well, because facilities which used carbon offsets equal to 30% or more of their baseline would need to detail why they were not delivering more actual emissions abatement, “this may drive increased uptake of SAF and other decarbonisation measures where available.”

Shifts to alternative transportation modes such as high-speed rail could dampen demand for flights, suggests the government, as might more use of technologies such as videoconferencing. “However, while these options exist in Australia, the country’s relatively lower connectivity, dispersed population and geographical isolation from the rest of the world may limit flight alternatives.”

The Aviation Green Paper was released soon after Qantas announced a large increase in its proposed uptake of SAF, in partnership with airframers Airbus and Boeing, as part of new orders for widebody jets. In addition to significant recent orders for narrowbody Airbus A220 and A320-family aircraft, and widebody Boeing 787-9 Dreamliners, Qantas has ordered 12 more long range Airbus A350s and 12 more Boeings, a mix of 787-9s and larger 787-10s, to replace current A330s from 2027 and A380s from 2032.

The deals include access to up to 500 million litres of SAF each year from 2028, including the airline group’s current commitments for 80 million litres. This accounts for 90% of the company’s interim target that SAF should comprise 10% of its 2030 jet fuel consumption. The SAF would be sourced in the US, said Qantas, “at favourable prices due to favourable government polices” – a thinly-veiled reference to the current lack of government support for SAF development or incentives for use in Australia.

Photo: Qantas

Production of sustainable aviation fuel in the Asia-Pacific region has been boosted by three new projects in which major airlines Qantas, Cathay Pacific and All Nippon Airways (ANA) are key partners. In Australia, Qantas, Airbus and the Queensland state government will invest in a new alcohol-to-jet production facility planned by bioenergy company Jet Zero Australia and US-based fuel technology group LanzaJet, using locally sourced agricultural feedstock including sugar cane. Hong Kong-based Cathay Pacific has signed a Memorandum of Understanding to partner with mainland China’s State Power Investment Corporation (SPIC) in the development of four new SAF plants using a pathway similar to power-to-liquids. And in Japan, ANA, the country’s largest airline, has agreed to introduce SAF blended locally by ITOCHU Corporation to help power domestic and international flights from Tokyo’s two major airports, Haneda and Narita. The initiatives support commitments by all three airlines that SAF will comprise 10% of their total jet fuel consumption by 2030.

The Australian collaboration centres on the construction by Jet Zero Australia of a new SAF plant in North Queensland using LanzaJet’s alcohol-to-jet technology to produce up to 100 million litres of sustainable fuel per year. The Qantas Group, Australia’s largest airline operator, together with Airbus, will jointly invest A$2 million ($1.34m) of an initial A$6 million ($4m) capital raising, to which the Queensland government will contribute a further A$760,000 ($500,700), with the balance to be provided by Australian and international institutional funds. Collectively, this capital will be used to undertake a detailed feasibility study, and early-stage development of the project, with construction expected to start in 2024.

Andrew Parker, Qantas Group’s Chief Sustainability Officer, said the project was part of a A$200 million joint commitment with Airbus to progress the development of a SAF production industry in Australia, and one of several projects the airline is looking to fund this year.

“Sustainable aviation fuel is critical to the decarbonisation of the aviation industry,” he said. “This investment will help kickstart an innovative project to turn agricultural by-products into sustainable aviation fuel and create a significant domestic biofuels refinery.”

Qantas is currently using SAF sourced overseas to power commercial flights from London and expects to add San Francisco and Los Angeles in 2025.

Airbus’ Executive VP Corporate Affairs and Sustainability, Julie Kitcher, said there was “a growing positive momentum around SAF, and now is the time to move from commitments to concrete actions. The selection of the first investment under our joint partnership with Qantas is an example of such action, with the potential to deliver SAF locally in Australia and to be a model for other locations around the world.”  

Queensland’s Deputy Premier, Steven Miles, said a rich supply of feedstock meant the state was well-positioned to become a key player in SAF development. “It’s exciting to think that Queensland could be producing the millions of litres of SAF needed to power flights across Australia and around the globe, creating more regional jobs in the process,” he said. 

In addition to deploying its alcohol-to-jet technology in the project, said LanzaJet CEO Jimmy Samartzis, “it is equally gratifying to know its impact in developing the domestic agricultural industry, providing a path for energy security, and enhancing the country’s national security posture and greater fuel independence.” LanzaJet said Australia was the second-biggest emitter of carbon per capita on domestic flights.

Ed Mason, CEO of JetZero Australia, which was established in 2021, welcomed the strong investment support for the new SAF plant, which will use surplus ethanol from agricultural and sugar cane by-products to create the new fuel, and acknowledged LanzaJet’s industry leadership in developing alcohol-to-jet fuel technology, with the mechanical completion of its Freedom Pines facility in the US state of Georgia expected later this year. “We are excited to work with them,” said Mason, “to help Australian businesses and government drive real reductions in aviation emissions.”   

In Hong Kong, Cathay Pacific signed an MoU to partner with State Power Investment Corporation (SPIC), which plans to commission four SAF plants in mainland China between 2024 and 2026, each facility capable of producing 50,000 to 100,000 tonnes of SAF per year. SPIC is one of China’s biggest state-owned energy companies and claims the world’s largest solar power installed capacity. The new SAF plants will use a process similar to power-to-liquids’ (PtL) in which renewable electricity is converted into liquid fuels.

“The signing of our cooperation pact is an important milestone in SPIC’s sustainable development pursuits and a significant contribution by a Chinese enterprise towards supporting sustainable development in the global aviation sector,” said the corporation’s chairman Qian Zhimin. “We hope both parties can build on our collaboration in the certification and purchase of SAF to further cooperate in areas pertaining to the industry supply chain, project development and securing the necessary policy support.”

Cathay Pacific Group CEO Ronald Lam said the partnership combined the corporation’s clean energy strengths and the airline’s expertise as an end user of SAF. “Under the MoU, Cathay Pacific will share international experience, and also feedback on the SAF certification process, value chain and overall market know-how to facilitate SPIC in the successful establishment of four plants in the Chinese mainland,” he reported.

In Japan, ANA will procure its first supplies of locally blended SAF for use on domestic and international flights from Tokyo’s Haneda and Narita airports. The SAF solution to be blended will be provided by renewable fuel producer Neste, and blended in Japan by ITOCHU Corporation, as part of a public-private partnership led by the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport and Tourism. 

Photo: Cathay Pacific

Australian fuel company Ampol has partnered with Japan’s largest oil company, ENEOS Group, to investigate the production of advanced biofuels including sustainable aviation fuel in the Australian state of Queensland. The two companies have signed a Memorandum of Understanding to jointly explore developing Ampol’s Lytton refinery in Brisbane, the state capital, to produce up to 500 million litres of SAF and renewable diesel annually, using locally-sourced feedstocks including agricultural waste and animal fats. The project will combine Ampol’s refining and distribution infrastructure and local market knowledge with the expertise of ENEOS in refining technology and energy transition. The companies have also signed an MoU with the Queensland government to explore investment and project development as part of the Queensland Biofutures 10-year Roadmap. One of the government’s key objectives is to establish SAF refineries throughout the state, Australia’s second-largest by area, to produce fuels for both domestic use and export.

The Asia-Pacific region has lagged behind both Europe and the US in SAF development, and despite intense lobbying from the aviation sector, Australia has been one of the slowest developed nations to progress the new fuels in the APAC region. Among the leaders have been Singapore, where renewable energy group Neste is preparing to activate a new facility with capacity to produce up to 1 million tonnes of SAF per year, and Japan, where multiple SAF production programmes are being explored or progressed. Although it remains a major exporter of coal, Queensland is increasingly focusing on renewable energy, with green hydrogen producer Fortescue Future Industries also exploring renewable energy production in the state. The new Ampol/ENEOS SAF partnership provides a significant boost to Australia’s renewable energy hopes and needs.

Matt Halliday, Ampol’s Managing Director and CEO, said his company was committed to supporting the development of a biofuels value chain in Australia and to working with like-minded partners to expedite new energy technologies. “Biofuels and synthetic fuels have an important role to play in energy transition, particularly in hard-to-abate areas such as aviation and heavy industrial sectors like mining,” he said. “We are excited to partner with a global leader like ENEOS to further assess opportunities to repurpose our existing infrastructure and build new supply chains.

“Lytton has a large and highly-skilled workforce and existing manufacturing infrastructure and capabilities that can be leveraged to deliver these future fuels. Lytton is also located next to a key demand centre [directly opposite Brisbane Airport] and to the Brisbane River, presenting an opportunity to become an energy hub that can serve major parts of the Queensland economy.”

Saito Takeshi, ENEOS Representative Director and President, said his company was keen to participate in decarbonising the air transport sector in the Asia-Pacific region through the development of value chains and a stable supply of biofuels, especially SAF.

“Integrated supply chains, from feedstocks to manufacturing and distribution infrastructure, will be critical to the development of a successful and sustainable biofuels industry,” he said. “Queensland is uniquely positioned given the availability of high-quality feedstocks from established industries. In addition, the location of Ampol’s manufacturing and distribution assets provides a great platform from which to explore SAF production.”

In the first phase of their collaboration, Ampol and ENEOS will explore potential counterparties in Queensland to provide feedstock for fuel production and demand for product offtake. The companies also will work with the Queensland government as it seeks to attract investment in clean energy.

“Queensland’s Energy and Jobs plan sets out our path to a low-emissions future,” said the State’s Deputy Premier, Steven Miles. “As part of decarbonisation, the government is working to set Queensland up as the leading location for the production of green jet fuels.”

Miles said Queensland was recognised internationally as one of the best locations for a SAF supply chain due to a rich supply of feedstock and manufacturing strengths. “This project has the potential to unlock significant benefits for our economy by generating good, skilled jobs and opening export opportunities in a new industry,” he added. “The Queensland government’s plan is to establish SAF refineries across the state and position ourselves as one of the world’s best SAF suppliers.”

As well as their Brisbane project, Ampol and ENEOS will also consider opportunities to participate in the Japanese government’s programme to invest in projects which can help the nation to achieve carbon neutrality by 2050. As part of this ambition, the Ministry of Land, Infrastructure, Transport and Tourism wants SAF to comprise 10% of aircraft fuel use by 2030.

The announcement was welcomed by the Sustainable Aviation Fuel Alliance of Australia and New Zealand (SAFAANZ), whose more than 60 members include Qantas, Virgin Australia, Air New Zealand, Airbus, Boeing, major airports, fuel companies and renewable energy producers.

“A domestic supply of sustainable aviation fuel and renewable diesel will not only enable greater emissions reduction in the aviation and transport sectors, it will also present Australia with an incredible opportunity to enhance its fuel security position,” said the group’s chair, Terri Butler.

As well as providing Australia with “a crucial foothold” in the global renewable fuels sector, the group believes the Ampol-ENEOS collaboration could provide strong opportunities for the agricultural sector. 

“This project is particularly important for Queensland,” it said, “where growers and producers, without any domestic options, have been exporting their high-quality feedstock overseas to refiners, putting Australia in the odd position of importing renewable fuel made by its own exports, grown in its own soil.” 

Photo: Brisbane Airport

The Asia-Pacific region, the world’s largest combined air transport market, has edged closer to lower carbon air services with significant initiatives announced in two countries, Singapore and New Zealand, reports Tony Harrington. Commencing in 2022, the Civil Aviation Authority of Singapore (CAAS) will conduct a 12-month trial of sustainable aviation fuels (SAF) at Changi International Airport with Singapore Airlines and state-owned investment company Temasek. It will also partner with Airbus on a two-year feasibility study into production, infrastructure and procedures for hydrogen-powered aircraft operations. In New Zealand, a partnership has been formed between Finnish renewable fuels company Neste and Wellington-based fuel corporation Z Energy to import sustainable aviation fuel and renewable diesel, in line with the government’s commitment to transition to a low-carbon economy. Air New Zealand and Airbus have also announced a partnership to investigate how hydrogen propulsion could be applied to the airline’s domestic operations.

Although Asia-Pacific accounts for 38% of global air journeys, it lags Europe and the US in progressing sustainable aviation. In a post-COP26 communique, the Association of Asia Pacific Airlines (AAPA), which represents 14 operators, said commercialisation of SAF was critical to reducing aviation’s emissions and government support was essential for the industry to reach net zero by 2050, which AAPA members committed to in September.

“Facilities for producing SAF are severely lacking in Asia-Pacific compared to other regions,” said AAPA’s Director General, Subhas Menon. “Taxes, onerous regulations and other penalties would only increase the cost of travel without any benefit to the environment. Conversely, government incentives and investment would contribute to the effective development of sustainable fuels and new energy sources to bolster the industry’s efforts to achieve carbon neutrality by 2050.”   

In Singapore, CAAS, Singapore Airlines and Temasek have issued a Request for Proposal, through which select, unnamed producers and suppliers have been invited to develop and implement plans to provide blended SAF. The pilot programme follows a study by the Singapore government and key industry participants to examine the operational and commercial viability of SAF at Changi Airport, one of the biggest and busiest air transport hubs in the region.

CAAS Director-General Han Kok Juan said sustainability was a key priority for the aviation industry as it recovered from the pandemic and SAF a critical enabler of decarbonisation. “The pilot, which will incorporate the blending of neat SAF in local facilities, certification of blended SAF and delivery to Changi Airport, is a significant step to operationally validate SAF integration options in Singapore. It will provide insights on end-to-end cost components, potential pricing structures for cost recovery and support future policy considerations for SAF deployment,” he said. The announcement of the Singapore SAF trial coincided with the release at the COP26 summit of the SAF Policy Toolkit, developed by the World Economic Forum’s Clean Skies for Tomorrow SAF Ambassador’s Group, of which Singapore is a member (see article).

On the study with Airbus that will look at demand for and production of alternative aviation fuels, Han said recovery from Covid-19 “will not be a return to business-as-usual but an opportunity to rebuild an aviation sector that is more sustainable. It is not a question of whether, but of how, to make flying greener and developing concrete pathways to achieve that goal while ensuring that air travel is still accessible.”

Sabine Klauke, Chief Technical Officer, Airbus, added: “The decarbonisation of our industry requires a combination of approaches, hydrogen being one of them, and will need unprecedented cross-sector collaboration to create the new aviation infrastructure ecosystem. We are therefore pleased to have CAAS as a partner, as we embark on this exciting journey.”

The CAAS-Airbus partnership initially will consider the technical feasibility of an airport hydrogen hub and infrastructure to support operations by hydrogen-powered aircraft, including the production, storage and distribution of hydrogen, ground services for aircraft, logistical equipment and refuelling systems. In addition to provision of hydrogen, the study will consider how alternative fuels could be integrated into airport developments, either from the start or progressively as technology evolved.

In New Zealand, Z Energy has partnered with Neste to import sustainable fuels. Earlier this year, as part of a broader decarbonisation strategy, the government announced it was considering SAF blending mandates, a policy already being rolled out in Europe to boost demand for SAF to levels that supported commercial production. Z Energy is a major provider of fuel in New Zealand, supplying airlines, shipping, road transport and industry. It owns and operates pipelines, terminals and bulk storage infrastructure, supplies over 200 auto fuel retailers, and owns 15.4% of Refining NZ, the country’s only oil refinery. Together with Air New Zealand, Z Energy is a strong advocate of local SAF production.

Sami Jauhiainen, Neste’s VP Business Development, Renewable Aviation, said collaboration with Z Energy was designed to grow the availability of SAF and renewable diesel in New Zealand, and to support the country’s emission reduction targets. “While the market for SAF is today more mature in Europe and North America, where regulatory frameworks create a growing market, we expect the Asia-Pacific region to follow on that path sooner rather than later,” said Jauhiainen, who in January will transfer to Singapore to take up the new role of VP Asia Pacific for Neste Renewable Aviation. The company has also announced it will open an Asia-Pacific Research and Development Centre in Singapore, to undertake advanced analytical and raw material research with partners in Singapore and across the APAC region.

Virgin Australia CEO Jayne Hrdlicka has expressed confidence investors and global SAF providers would also focus on Australia, once appropriate policy settings were in place. She told the recent IATA SAF Symposium: “We need government support to ensure the seed capital that’s needed and the funding to get up to scale is there and available, along with the tax offsets needed to motivate that investment cycle. We’re doing our bit with the Australian government to find solutions to get the ball rolling.

“We see great things happening in the US, and we’re really buoyed by that because we think some of the first mover investments that have been made elsewhere in the world will also increase the odds of success in Australia. Then the costs of experimentation and innovation are a bit lower and we can partner with others to make headway more quickly that we’d otherwise be able to do. We have to do that with support from other stakeholders, including government.

“When that curve starts to move in the right direction, all those first movers are going to be looking at the opportunities that exist globally but haven’t yet been delivered. I would fully expect that we would have companies arriving here who want to leverage the technology and capabilities that they have elsewhere, knowing that they have got a ready market for the output and hungry to just take in the opportunity.”

Earlier this year, Virgin’s rival Qantas announced a partnership with BP to explore opportunities to establish a SAF industry in Australia.

“Even though we have been flying a lot less, we’ve actually seen the same proportion of customers choosing to offset their domestic travel during the pandemic – showing that this issue remains top of mind for people,” said Andrew Parker, Qantas Group Executive Government, Industry and Sustainability. “Airlines globally have a responsibility to cut emissions and combat climate change, particularly once travel demand starts to return. The Qantas Group has set some ambitious targets to be net carbon neutral by 2050, and while offsetting emissions is a big part of that in the next few years, longer term initiatives like building a SAF sector in Australia are key.”

Photo: Singapore’s Changi Airport (© Changi Airport Group)

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