Qantas Places Burden of Cleaning Up Aviation on Sustainable Fuel

(Bloomberg) -- Qantas Airways Ltd. said sustainable aviation fuel is the only immediate way to decarbonize flying, placing much of the burden of cleaning up aviation on a kerosene alternative that remains expensive and in limited supply.

Cleaner electric and hydrogen-powered aircraft are still decades from commercial viability, Chief Executive Officer Alan Joyce said Thursday as he laid out Qantas' plan to reach net-zero emissions by 2050. Powering the current fleet with sustainable aviation fuel “is really the only feasible short-term solution,” Joyce said at a media briefing at the airline's headquarters in Sydney.

Airlines are fast embracing sustainable fuel, which can be derived from everything from waste oils and fats to sugar crops and trees, as decarbonization emerges as the industry's biggest challenge in the aftermath of the pandemic. Failure to cut pollutants could lead to emissions-related restrictions on flying and crimp industry growth again.

It's a pathway that's far from clear. Sustainable aviation fuel, or SAF, accounts for less than 0.1% of global aviation fuel demand because of limited availability and lack of policy support from governments, BloombergNEF said last year. Joyce said that while SAF is close to the same price as normal fuel in California, in the U.K. it's twice as expensive. Boeing said in February it was roughly three times the price of conventional fuel.

Joyce on Thursday repeated his call for the Australian government to introduce policies to help create a domestic industry for sustainable fuel production. Without that help, domestic SAF could be five times the price of normal fuel. “That's not feasible,” he said.

The tensions underscore the complexity of eliminating aviation's carbon emissions on a net basis by 2050. The cost of transitioning from fossil-derived jet fuel will be $2 trillion, according to the International Air Transport Association.

Airbus SE aims to put a hydrogen-powered aircraft into the skies by 2035. Boeing says sustainable fuel is the best bet right now because it doesn't require new propulsion technology, and has cited studies showing that sustainable aviation fuels reduce emissions by as much as 80%.

Meanwhile, Qantas said it's exploring a possible reforestation and carbon-farming project in Western Australia, which in the long term might also become a source for sustainable fuel.

SAF will be 10% of the airline's fuel mix by 2030, and about 60% by 2050. The airline expects that by 2050, SAF will be no more expensive than jet kerosene.

As part of the airline's target of reaching net-zero emissions by 2050, Qantas plans to cut its carbon pollution 25% by 2030. The airline also has interim targets for fuel efficiency and aims to phase out single-use plastics entirely by 2027.

Still, the initiatives will be far from enough to eliminate Qantas' emissions entirely, which means balancing the equation with carbon offsetting.

“It will certainly be a very large element of our 2030 commitment,” Andrew Parker, Qantas' chief sustainability officer, said at the briefing. “We do not see a path to 2050 without carbon offsetting.”

Some carriers, including United Airlines Holdings Inc., have rejected using carbon offsets at all.

“It cannot scale to the size of the global problem,” United CEO Scott Kirby said in a Wall Street Journal interview posted on Twitter in September. “If we planted every acre on the planet that can theoretically grow trees, it would account for less than 5 months of mankind's carbon emissions, and then we're done.”