Qantas Airways To Invest USD 200M To Develop Sustainable Aviation Fuel

An Airbus executive said on Monday that the company and Qantas Airways Ltd plan to announce the first investment from a $200 million fund to develop a sustainable aviation fuel (SAF) industry in Australia within a month.

The fund was established last year after Qantas committed to using 10% SAF in its fuel mix by 2030 and placed a multibillion-dollar order for Airbus narrowbody and widebody planes.

Because Australia lacks a SAF industry, Qantas purchases its fuel at international airports.

Airbus' chief representative for Australia, New Zealand, and the Pacific, Stephen Forshaw, said the company and Qantas were meeting weekly to discuss $1 million-plus investments in early stage SAF projects in Australia.

"The first investment has been made but not fully closed yet," he said in an interview ahead of the Australia International Airshow, which begins on Tuesday. "We've both agreed to it, and I think we'll make some announcements probably in the next month or so around the completion of that."

Qantas has refused to comment.

Forshaw stated that the majority of the investments under consideration involved seed funding, with partners taking a minority equity stake.

"Some of them may be even earlier than Series A. What it may do is provide us with the opportunity or right of first refusal to go in at Series A or Series B or beyond," he said. "And then the pace will determine whether we want to do that or whether we see it is time to open it up to other investors."

He declined to specify the nature of the first investment, but said that in the long run, Australia had a lot of potential to use solar power for projects that would help meet demand given the limited feedstock available from sources such as oils and fats.

Qantas Chief Sustainability Officer Andrew Parker told analysts last week that the airline could meet its 2030 target of 10% SAF solely through purchases in London and California if necessary, but that 70% of the airline's total fuel was sourced in Australia.

"We know we have to play a lead role in developing a domestic industry," he said, adding there could be local production by the second half of the decade.

Qantas anticipates that approximately 60% of its fuel will be SAF by 2050, allowing it to meet its target of net zero emissions by that date.