Qantas has joined forces with a consortium of airlines, an aircraft manufacturer, and energy and financing companies to help accelerate the global production of aviation biofuel. The Sustainable Aviation Fuel Financing Alliance (SAFFA) fund has been formed with anchor investor Airbus, Air France-KLM, Mitsubishi HC Capital Inc., BNP Paribas, Associated Energy Group, and Burnham Sterling Asset Management (as fund manager).

The initial partners have committed around $US200 million, with Qantas initially committing US$50 million (AU$75 million) from its Climate Fund, which was established in 2023 and includes the Sustainable Aviation Fuel (SAF) partnership with Airbus.

The Power of SAF

SAF is one of the most effective tools airlines use to reduce emissions. With low—and zero-emissions aviation technology still decades away, the demand for SAF, both locally and globally, far outstrips supply.

Through SAFFA, the partners will invest in SAF technology development and production projects. The initial focus will be on opportunities to repurpose existing infrastructure. Investments will initially be focused in the United States but are expected to be diversified across various SAF production pathways and regions in time.

Qantas and the SAFFA partners will also have opportunities to enter into priority offtake contracts for the supply of SAF produced through the supported projects.

First Investment

The fund made its first investment in April 2024 in US-based technology company Crysalis Biosciences. The company aims to renew the chemical manufacturing infrastructure with innovative fuel and chemical production technologies. It has successfully acquired and renovated an ethanol plant in Illinois that was closed in 2019. The plant has now received approval to resume operations to produce low-carbon intensity SAF and biochemicals.

A Word from the CEO

Qantas Group CEO Vanessa Hudson said SAFFA would invest in technologically mature projects, focusing on commercial viability, to help improve access to and drive down the cost of low-carbon fuels.

“Aviation is one of the hardest sectors to decarbonise, and it’s going to take partnerships across industries like this to help close the gap between supply and demand,” Ms Hudson said. “The current imbalance is one of the reasons SAF comes at a significant premium compared to jet kerosene, so the industry must invest now in scaling production.”

Looking Ahead

Separate from its investment in SAFFA, Qantas is evaluating several additional domestic investment opportunities from its Climate Fund, which it expects to finalise in the coming months. Qantas has invested in a Queensland biofuel production facility being developed by Jet Zero Australia in partnership with leading sustainable aviation fuel technology company LanzaJet.

Earlier this year, Jet Zero Australia achieved a significant milestone by successfully raising A$29 million in its second round of funding.

Qantas has committed to using 10 per cent SAF in the Group’s fuel mix by 2030 and approximately 60 per cent by 2050. Since 2022, Qantas has purchased around 10 million litres of SAF out of London per annum and has contracts in place for 20 million litres out of California.

Qantas has also made a number of policy recommendations to the Australian government that would help kickstart a domestic SAF industry in Australia, drive job creation, fuel security and economic growth. This forms part of the ~AU$80 million Qantas disclosed it had committed from its Climate Fund in its Half Year Results.

The formation of SAFFA and Qantas’ commitment to it marks a significant step forward in the aviation industry’s journey towards sustainability. It demonstrates how collaboration and investment can drive change and make a real impact on reducing emissions.