Australia’s long-promised transition to Sustainable Aviation Fuel (SAF) is gaining momentum, but aviation and airport leaders caution the nation still lacks the structural certainty, government coordination and investment signals required to build a viable domestic industry.
Speaking separately at the inaugural FACTS Summit & Expo which opened today at ICC Sydney with aviation commentator Peter Harbison, Western Sydney International Airport’s chief operating officer Matt Duffy and Qantas International and Freight CEO Cam Wallace painted a picture of an industry that is eager, yet constrained by a complex supply chain, unclear policy settings and the absence of a formal national government mandate.
You sit in the centre of that jigsaw
Duffy said Western Sydney Airport finds itself uniquely positioned – and exposed – within the SAF supply chain.
“At the airport, it’s a really funny place, because you sit in the centre of that jigsaw. And you can see all the moving pieces but you just can’t bring them all together. It’s a tricky exercise,” he said.
“But we’re still ambitious, and we still see a future for SAF, and we think there’s a lot of discussion, there’s a lot of thinking it’s just really bringing those pieces together.”
He said WSI is “actively engaged with the major fuel suppliers” and in regular discussions with Transport for NSW about fuel corridors to truck in any type of fuel in and about future pipeline infrastructure. But the challenge extends far beyond aviation.
“All the fuel that goes to Western Sydney has to go (via road), so that’s diesel, that’s Jet A-1. So, we’re actually the small tip of the iceberg for a bigger problem for this state government,” Duffy said.
The lack of clarity around distribution has forced WSI airport to design flexible future-proofing into its facilities.
“We actually considered building a formula where the tanks were full of SAFs… The problem was, then we had other parties saying we could provide blended product… So we got to the point where we go, ‘Well, we don’t know whether to turn left or to turn right’,” Duffy said. The airport has now “safeguarded” an additional tank and is prepared to receive either raw or blended SAF when supply allows.
But until the system matures, he warns no airline operating from Western Sydney will be able to uplift SAF at all.
“It probably needs some intervention at a government level,” he said.
The disconnect between producers, distributors and airlines all circles back to cost, risk and demand uncertainty.
“The big issue… is SAF is dollar for dollar far more expensive today than Jet A-1,” Duffy said. “The distributors are saying they’re happy to make the SAF, but they’re saying we want a constant demand… So trying to resolve that is a little bit complex, and it probably needs some intervention at a government level at some stage to create that impetus.”
He noted the irony that “Australia… produce[s] a lot of the feedstock for the rest of the world” yet does not manufacture SAF domestically.
Duffy believes a joint industry body, similar to one created for Sydney Airport decades ago, could provide the coordination needed to finally “bring those pieces of the jigsaw together.”
Qantas: SAF “absolutely essential” to long-haul flying
Wallace echoed the urgency, emphasising that longer-haul routes will depend heavily on SAF uptake, especially as the carrier moves closer to the launch of Project Sunrise.
Wallace confirmed that Qantas currently picks up SAF in London and the US and aims for “10 per cent of our fleet being on SAF” by 2030. While there is much talk about sustainable fuels, by both industry and governments, scaling up requires a domestic industry and an investment of billions to make it viable.
“The challenge and opportunity… is to create a SAF industry in Australia… geographically, we’re positioned perfectly,” he said. “At the moment [SAF] is three or four times more expensive than jet fuel.”
And any sizeable industry will reduce that cost. But Wallace stressed that Qantas does not want to go it alone.
“It should be with Virgin, with our competitors,” he said “We want to make sure that we can grow this for the whole industry.”
Cam Wallace (right) tells Peter Harbison that Qantas doesn’t want to go it alone it the search for a sustainable fuel solution.
Mandates, incentives and the cost gap
Like Duffy, Wallace said government policy will determine the pace of progress.
“We’re working with them to say what is the best structural environment,” he said. “Now some people say that’s mandates… or it might be incentives to build the production facilities. So, it could be a combination of both.”
As the volume of investment needed is huge, the Federal Government’s $1.1 billion investment in supporting the future Australian production of low carbon liquid fuels, including SAF is “a drop in the ocean” compared to what is required over the next decade, said moderator Harbison.
In the meantime, the lack of local supply leaves airlines and corporate travellers reliant on offsets – an increasingly unpopular tool.
Without the supply of SAF, you’ve got to go the carbon offsetting, Wallace said. “It’s a really wicked and challenging problem for the industry.”
Both aviation leaders agree momentum is finally building. But without co-ordinated government action, either incentives, mandates or both, the pieces of Australia’s SAF jigsaw may continue to sit scattered on the table.