Fuel for thought: is SAF the safe bet?

Aviation's short runway to net zero 6 min read

In this Insight, we look at the challenge posed by the Aviation Green Paper (the Paper) for the Australian aviation sector to lead the transition to net zero.

Released on 7 September 2023, the Paper offers insights into the Australian Government's likely key policy objectives for decarbonising the sector— in short, to develop an Australian sustainable aviation fuel (SAF) industry. Quickly.

While the promise of electric, hydrogen-electric and hydrogen-powered aviation is recognised, the Paper acknowledges that there is limited capacity for the technology to have meaningful decarbonisation benefits before 2040. So SAF is likely to be the short-term priority, but the long term opportunities that green energy aircraft offer shouldn't be ignored.

The Paper provides stakeholders an opportunity to influence what fuel sources and technology should benefit from government support and form part of the Aviation White Paper, the Transport and Infrastructure Net Zero Roadmap and Action Plan and other key initiatives due to be launched in 2024.

Key takeaways

• The Paper gives stakeholders an opportunity to influence Australia's aviation net zero flight path
• SAF looks like the safe, and potentially, only bet for meaningful decarbonisation before 2050
• Electric and hydrogen technologies shouldn't be ignored for the long-term benefits they offer, and their role in Australia's green energy future.

What's happened since the last Aviation Paper?

It's been more than a decade since the last Aviation White Paper was released (in December 2009). While that paper touched on aviation's role in reducing the impact of climate change, it largely focused on reducing carbon emissions through operational efficiencies. At that time the development of biofuels and other decarbonisation technologies was at an early stage and it was not until 2021-22 that industry groups such as IATA and ICAO committed to net zero after the UNFCCC excluded international aviation emissions from the targets set under the Paris Agreement.

The SAF opportunity

SAF is acknowledged in the Paper to be 'the most advanced means to support aviation meeting the objective of net zero by 2050'.¹ As a replacement to conventional petroleum-based jet fuel, SAF is believed to have the potential to deliver up to a 100% reduction in net carbon dioxide.² It can be produced from a number of feedstocks and can be done so synthetically and sustainably given it does not compete with food crops, water supplies and is not a contributor to forest degradation.³

The first flight with a blend of SAF and conventional fuel occurred in 2008, and presently available SAF can reduce carbon emissions by up to 80%.⁴ The technology to reach 100% reduction is expected to be available in the near future. It also offers a low barrier solution as it can be substituted (up to certain levels) without the need to modify aircraft or infrastructure—a distinct advantage given the life cycle of commercial aircraft averages around 25 years.⁵ For these reasons, SAF has been touted as the readiest solution for this 'hard to abate' industry.

As the only ready alternative to conventional jet fuel, the focus on SAF as part of any strategy to achieve net-zero flying by 2050 is not surprising. The Government established the Australian Jet Zero Council in June 2023 tasked with, among other objectives, the development of a domestic SAF industry.

As recognised in the Paper, Australia does not currently have onshore refining capacity to produce SAF capable of supporting the Australian aviation industry. Australian airlines have limited opportunity to access SAF offshore due to high global demand, low supply and a significant price difference compared to conventional jet fuel. Finnish corporation Neste announced in May 2023 the opening of its SAF refinery plant in Singapore, which will make it the world's largest producer of SAF with a one million metric tonne capacity. Geographically, this is significant for Australian airlines as the other major SAF refineries are located in Europe and the US.

In addition to setting SAF targets and mandates, the Paper has flagged that positioning Australia as a SAF producer (rather than just a consumer) could provide long-term environmental and economic benefits. However, there is a risk that Australia is already too late to the game; the provision of SAF does not just rely on the airlines and airports, but also wider infrastructure for a vertically integrated supply chain—and in the time it would take to build production, refining, transport and logistics capabilities,⁶ other technologies may have caught up to provide more competitive solutions.

Electric and hydrogen-powered aviation

Electric, electric-hydrogen and hydrogen-powered aircraft are acknowledged in the Paper as the next technological advances that will aid the aviation green transition. Major manufacturers such as Rolls-Royce and Airbus have already started working to create hybrid-electric engines and electric aircraft trials are underway,⁷ albeit in relation to much smaller aircraft. As flagged in the Paper, some manufacturers are 'targeting 10+ seat capacity before 2030'.⁸ However, the environmental advantage of electric power relies on the sources for that electricity being sustainable. In addition, given the bulk and weight of batteries and charging requirements, the short to medium-term application for electric aircraft would be short flights with a small number of passengers.

Aircraft powered by hydrogen fuel cells would completely eliminate the production of carbon emissions in flight, but based on current technology this is likely not feasible until 2040. One key advantage is that hydrogen, being energy dense, does not have the same range limitations of electric aircraft, and medium-haul flights would be possible. Promisingly, in March 2023, an ATR-72 aircraft retrofitted with a liquid-hydrogen tank successfully completed its test flight.⁹ However, significant modification and investment in airport infrastructure (including how aircraft are refuelled) and aircraft design would be needed for this to be commercially viable. The World Economic Forum estimates that a US$700 billion to US$1.7 trillion investment is required to provide sufficient infrastructure for hydrogen and electric aircraft.¹⁰ And while hydrogen is plentiful, hydrogen production itself may not be carbon-free. A holistic approach is required to ensure aviation's carbon pollution is not simply shifted someplace else.

Interestingly, almost all of the Australian federal, state and territory governments have identified renewable hydrogen as a priority in their sustainability roadmaps,¹¹ including the National Hydrogen Strategy. The aircraft manufacturers appear to have taken divergent approaches, with Airbus pouring significant efforts into hydrogen, and Boeing seeming to prefer the immediacy of SAF.¹² The versatility of 'green hydrogen' is a key benefit as it has applications beyond fuel for aircraft, including land and marine transport, electricity generation, gas networks and industrial heating. Further, hydrogen could be used to create synthetic SAF in the interim.

Next steps

Any strategy for decarbonisation of the Australian aviation industry should be accompanied by standardised, science-based methods to measure progress and report impact. This will increase accountability and transparency, and render such projects more investable and bankable.

The Department of Infrastructure, Transport, Regional Development, Communications and the Arts will host a series of roundtable sessions about the Paper with industry stakeholders in October and November 2023, with submissions due on 30 November 2023. The Aviation White Paper is scheduled to be released by mid-2024 and we hope it will deliver a clear decarbonisation strategy for the industry, with a framework for measuring and reporting its impact.