Air France-KLM and Qantas are among a new alliance aiming to help accelerate global production of aviation biofuel.
The Sustainable Aviation Fuel Financing Alliance (Saffa) fund has been formed with anchor-investor Airbus together with energy and financing companies.
The initial partners have committed around $200 million, with Qantas initially committing $50 million from a climate fund, which was established in 2023 and includes a sustainable aviation fuel (SAF) partnership with Airbus.
The partners will invest in SAF technology development and production projects with an initial focus on repurposing existing infrastructure.
Investments will be initially focused in the US, but in time are expected to be diversified across various SAF production pathways and regions.
Qantas and the alliance partners will also have opportunities to enter into priority contracts for the supply of SAF produced through supported projects.
The fund made its first investment in April 2024 in US-based technology company Crysalis Biosciences, which aims to renew chemical manufacturing infrastructure with innovative fuel and chemical production technologies.
Qantas Group chief executive Vanessa Hudson said SAFFA would invest in projects to help improve access to and drive down the cost of low-carbon fuels.
She said: “Aviation is one of the hardest sectors to decarbonise and it’s going to take partnerships across industries like this to help close the gap between supply and demand.
“The current imbalance is one of the reasons SAF comes at a significant premium compared to jet kerosene, so it’s critical for the industry to invest now in scaling production.
“Through our climate fund and our SAF partnership with Airbus, we continue to have a strong focus on Australian projects to accelerate the establishment of a domestic industry, however most of the new SAF investment opportunities here have long development lead times.
“The Saffa fund will enable us to get priority access to SAF sooner in key overseas markets while helping drive the development of the overall industry.”