Australia has an aviation fuel problem. It’s very dependent on other countries.
According to the AFR, Australia uses about 8.5 billion litres of aviation fuel each year and imports most of it. It is among the most import-dependent developed nations in the world.
While Australia is naturally rich in feedstock – used to make SAF – its production has been held back by cost, and namely, who absorbs it. SAF costs more than normal jet fuel so airlines don’t want to absorb the cost, investors are nervous and the government hasn’t identified it as a priority. This, however, seems to be changing.
Last week’s budget, whilst slated by the travel industry for its increased PMC charge, did at least include some important policy changes in regards to SAF.
The Renewable Fuel Scheme (the Scheme) will be now expanded to include low-carbon liquid fuels (LCLFs). This means that the production of SAF will qualify for financial incentives and credits, addressing some of the commercial concern which has been a barrier to its production in Australia.
Well received by the industry
It is no wonder it has been received well by the travel industry. Sydney Airport CEO Scott Charlton welcomed the announcement as a landmark moment.
“SAF is a once-in-a-generation opportunity to revitalise Australian sovereign capability and reduce our reliance on imported liquid fuels,” he said. “SAF can be made in Australia, using Australian feedstocks, helping create and sustain Australian jobs.”
TTF CEO Margy Osmond seconded Charlton’s enthusiasm in a statement released today, adding, “We need to keep Australia competitive as a global destination and, as a long-haul market, sustainability is becoming increasingly important to travellers, event organisers, and investors.”
“When we can meet sustainability expectations, we unlock opportunities for major conferences, packed venues, and thriving local businesses, with the benefits flowing right across the visitor economy.”
Australian Airport Association CEO Simon Westaway said that a supportive policy is the key to making SAF happen.
“Australia has the natural resources, renewable energy potential and aviation demand to become a regional SAF leader, but achieving that outcome will require sustained policy certainty, infrastructure investment and internationally aligned accounting frameworks.”
