23 June 2023

Govt-funded Australian Renewable Energy Agency to invest in sustainable aviation fuels development

| Andrew McLaughlin
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The ability to mass produce SAFs is still a long way off, as is the 2050 net-zero emissions target for global aviation. Photo: Greenaironline.com.

The government has announced its Australian Renewable Energy Agency (ARENA) will invest $30 million to support the development of a domestic sustainable aviation fuel (SAF) production industry from agricultural feedstocks.

A 21 June joint release from Minister for Climate Change and Energy Chris Bowen and Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King said a homegrown SAF industry could help decarbonise the aviation sector and create thousands of regional jobs, with grants from ARENA backed by the government.

Aviation is considered an industry that is very hard to abate, with its almost total reliance on jet fuel or avgas to power aircraft. While strides have been made in reducing fuel consumption by jet engines – and in other areas such as a greater use of electric vehicles around airport ramps and more efficient airport terminals – no one has cracked the code of a viable alternative to the fuels aircraft burn.

Some experiments have been done in recent years using hydrogen or electric power, but until the economics of these alternative clean energies stack up, they will remain experimental propositions.

Other SAFs include the use of biomass such as vegetation which, through a process called pyrolysis, can be heated and reduced into a ‘bio crude’ compound suitable for refining into aviation fuels. But again, the amount of biomass required is huge compared to the amount of fuel that can be refined, and the planting of biomass may be at the expense of natural vegetation or arable land available for agriculture.

One such fuel is ethanol which is derived from sugar cane and is blended with regular fuel to produce the E10 petrol many of us put in our cars, or the E85 fuel many performance and racing engines use. E85 is also used in some general aviation applications such as crop dusting and other general aviation activities, particularly in countries such as Brazil where they have a plentiful supply of biomass.

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Qantas, Airbus and the Queensland government have also sponsored a pilot ethanol project in North Queensland with Jet Zero Australia and Lanza Jet, which is due to be operational by late 2026.

While biofuel still produces carbon emissions, the idea is the biomass from which the fuel is derived would be large enough to absorb or offset those carbon emissions.

The joint-ministerial release says that the global air transport industry is committed to net zero by 2050, but low SAF production and high prices are standing in the way. But ARENA’s 2021 Bioenergy Roadmap found that a local bioenergy industry could contribute around $10 billion in extra GDP by 2030, and support as many as 26,000 new jobs.

ARENA was established in 2012 to support the global net-zero transition by accelerating the pace of pre-commercial innovation, and to accelerate improvements in the competitiveness of renewable energy and enabling technologies. It aims to increase the supply of renewable energy in Australia and facilitate the achievement of Australia’s greenhouse gas emissions targets by providing financial assistance and sharing knowledge to promote innovation that benefits all Australians.

Since 2012, ARENA has supported 653 projects through $2.04 billion in grant funding, unlocking a total investment of almost $9.06 billion in Australia’s renewable energy industry.

Minister Bowen said a local SAF industry presented a huge opportunity for Australia. “The world’s climate emergency is Australia’s jobs opportunity, and this is true for the aviation industry which is looking to reduce emissions – a homegrown sustainable aviation fuels industry could create more than 7,400 jobs by 2030, most of them in regional areas,” he said.

“Australia’s strong agricultural sector means we could be a global leader by scaling up domestic production of renewable fuel for exports, which could help reduce global aviation emissions significantly. This investment means the beginning of airlines being able to source their fuel from a variety of sources and decrease our dependence on importing fuels from overseas.”

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Minister King added: “With our population spread across an entire continent, aviation is often the only viable option for freight and passenger transport, and a domestic SAF industry can help transition the domestic industry.

“And with enormous volumes of tallow and canola oil currently shipped offshore due to attractive incentives offered by other governments, there is huge potential for Australia to become a sustainable fuels powerhouse. The outcomes of the ARENA-backed projects could have huge implications for regional Australia, and we will be closely following them as a government.”

The ARENA announcement coincided with the establishment of the Australian Jet Zero Council, a body set up to work with the aviation industry to identify opportunities to decarbonise the sector, and opportunities for industry and government to collaborate in achieving emissions reduction targets, including through sustainable aviation fuels and emerging technologies.

Minister King said members will be drawn from a range of aviation-related organisations spanning airlines, airports, fuels, manufacturing, research, finance, regional aviation and defence.

“I’m proud to be chairing the council, which will bring together a cross-section of stakeholders from across the aviation industry and its fuel supply chain,” she said. “We know that industry leadership will be a fundamental driver of the aviation sector’s transition to net zero.”

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