New Energy Bulletin: Sustainable Aviation Fuel Funding Takes Off ...

On 27 September 2024, the Department of Climate Change, Energy, the Environment, and Water (DCCEEW),1 and the Australian Renewable Energy Agency (ARENA),2 announced funding in relation to a $600 million project in Townsville Queensland which will convert bioethanol from domestic agricultural by-products into both sustainable aviation fuel (SAF) and diesel (the Project).3

ARENA provided $9 million in funding towards the $36.8 million front-end engineering design study (FEED Study) to the developer of the Project – Jet Zero Australia. The FEED Study is the next stage of the Project which is anticipated to be completed in 2025 and it aims to determine the commercial viability of scale alcohol-to-jet low carbon liquid fuel facility before the final investment decision. This marks ARENA’s first allocation of funding under the SAF Funding Initiative, which was launched in 2023 to support the development of a domestic SAF production industry4 with the ultimate goal of decarbonizing the aviation sector in Australia.5

The DCCEEW’s media release stated that the Queensland Government has allocated $5 million through the Queensland New-Industry Development Strategy (QNIDS) to fund the local production capabilities and establish SAF value chains in Queensland.6

Domestic aviation contributes approximately 2% of Australia’s greenhouse gas emissions, with the bulk of the emissions from medium to long haul flights.7

This Project aims to:

ensure both small scale and large scale farms can contribute in the biofuels value chain; produce 110 million litres of SAF annually, meeting the fuel demands of both Cairns and Townsville airports; reduce net domestic carbon emissions by up to 70% compared to fossil fuel use; and displace as much as 225,000 tonnes of CO2 annually.8

Key partners of the Project include LanzaJet, Qantas, Airbus, and Idemitsu Kosan.9

For further details, refer to the DCCEEW and ARENA media releases here.

The market for SAF in Australia is set to grow exponentially, driven by both global and domestic demand for cleaner aviation fuels. According to ARENA’s Bioenergy Roadmap, by 2030, the SAF industry could contribute up to $10 billion annually to the Australian GDP, creating more than 26,200 jobs, particularly in regional areas.10 As airlines seek to reduce their carbon footprints, the SAF market presents a significant opportunity for investment, innovation, and job creation across the energy and agricultural sectors.

To learn more about the SAF industry in Australia, please read our previous articles Fuelling the Future: Australia’s Path to Net Zero Transportation and Ready for take-off – Investment in Australian Sustainable Aviation Fuel with John Sheehy and Rodrigo Arias Lopez – Pottinger.

For more information, please contact Matt Baumgurtel.

1Department of Climate Change, Energy, the Environment and Water (DCCEEW), ‘Joint media release: Australia’s homegrown sustainable aviation fuel industry takes off’ (Media Release, 27 September 2024) <https://minister.dcceew.gov.au/bowen/media-releases/joint-media-release-australias-homegrown-sustainable-aviation-fuel-industry-takes>.

2Australian Renewable Energy Agency (ARENA), ‘ARENA backs Jet Zero for sustainable aviation fuel’ (Media Release, 27 September 2024) <https://arena.gov.au/news/arena-backs-jet-zero-for-sustainable-aviation-fuel/?>.

3Jet Zero Australia, ‘Project Ulysses’ (Web Page, 2024) <https://jetzero.com.au/project-ulysses/>.

4ARENA (n 2).

5ARENA, ‘Sustainable Aviation Fuel Funding Initiative’ (Web Page, 2023) <https://arena.gov.au/funding/sustainable-aviation-fuel-funding-initiative/>.

6ARENA (n 2).

7Ibid.

8Ibid.

9DCCEEW (n 1).

10ARENA (n 2).

Partner, Head of Energy

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