Opportunities and Challenges
As global aviation faces growing pressure to reduce carbon emissions, Australia and New Zealand are positioning themselves at the forefront of sustainable aviation fuel (SAF) development. With ambitious airline targets, abundant feedstock availability, and innovative technologies, the region has the potential to transform aviation sustainability. However, challenges such as high production costs, limited local capacity, and the need for robust policy frameworks loom large.
The State of SAF in the Region
In recent years, both Australia and New Zealand have made strides in developing a nascent SAF industry. One major initiative is the Wagner Sustainable Fuels refinery in Brisbane, which is set to become a cornerstone of Australia’s SAF production. Supported by investments from Boeing and the Queensland Government, this facility will utilise waste-based feedstocks, ranging from municipal waste to industrial by-products—to produce SAF. The technology aims to deliver up to an 84% reduction in CO₂ emissions compared to traditional jet fuel
Meanwhile, researchers are exploring a variety of innovative production methods. In Western Australia and Queensland, processes like Fischer-Tropsch synthesis and gasification are being fine-tuned to convert feedstocks such as sugarcane residues, sawmill waste, and used cooking oil into SAF. These methods not only expand the range of usable materials but also enhance fuel security in a region that currently imports 90% of its liquid fuels
Opportunities in Feedstocks and Production
Australia is uniquely positioned to capitalise on its vast array of feedstocks. Biogenic materials, such as agricultural residues, sawmill by-products, and municipal waste, provide a sustainable foundation for SAF production. By 2025, projections suggest the country could produce up to 5 billion litres of SAF, with this figure potentially tripling by 2050
The introduction of green hydrogen as a feedstock represents another exciting frontier. Combining hydrogen with captured CO₂ can yield SAF, reducing reliance on imported materials while leveraging Australia’s abundant renewable energy resources. With the right investments, the region could become a major player in global SAF markets, both in production and technology
Costs, Market Prices, and the Challenge of Scaling
The cost of SAF production remains a key hurdle. Current estimates place production costs between $3 and $8 per litre (USD), far higher than traditional jet fuel at approximately $0.80 per litre. Despite these costs, SAF commands premium prices in global markets, ranging from $3.50 to $7 per litre due to its limited supply and environmental benefits
However, scaling production to meet rising demand will be critical. Airlines like Qantas have committed to using 10% SAF by 2030, and aviation fuel demand across Australia is projected to increase by 75% by 2050. Meeting this demand locally would require significant investment in production facilities, supply chains, and technological innovation,
A Promising Yet Uncertain Future
The future of SAF in Australia and New Zealand hinges on the region’s ability to mobilise resources effectively. Initiatives like the Wagner refinery highlight the promise of domestic production, but broader policy support and investment will be crucial to achieving the scale necessary to meet domestic and regional demand.
Moreover, delays in development could see the region lose out to global competitors. With other countries actively sourcing Australian feedstocks for their own SAF production, local industries must act swiftly to retain value and secure their position in this growing market.
For Australia and New Zealand, the opportunity is clear: to lead the global charge in sustainable aviation. By leveraging their natural resources, advancing technological innovation, and fostering strong industry collaboration, the region could set a benchmark for SAF production worldwide. The journey toward decarbonised aviation is challenging, but with the right steps, it is well within reach.
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