Australian airline group Qantas has launched an AU$400 million (€245 million) fund to invest in sustainability projects including the production of sustainable aviation fuel (SAF).
The Qantas Climate Fund, which was announced at the group’s investor strategy day on Tuesday (30 May), includes the existing partnership with Airbus created last year to create a domestic SAF industry in Australia.
The rest of the funding will be used for other environmental projects, such as “high integrity” carbon offsets, offshore SAF investments and technologies to increase operational efficiency.
Qantas has committed to reducing carbon emissions by 25 per cent by 2030 (based on 2019 levels), as well as using at least 10 per cent SAF within its fuel mix by the end of the decade. Like most major airlines, Qantas is aiming to achieve net zero emissions by 2050.
Currently, Qantas is purchasing SAF outside Australia as the country does not have a local “commercial scale” industry to produce the sustainable fuel. The airline’s overseas purchases include 10 million litres of SAF for departures from London in 2023, as well as 20 million litres annually for flights out of California from 2025.
Qantas is now calling for the Australian government to introduce a SAF blending mandate, as has already been agreed in the EU.
Chief sustainability officer Andrew Parker added: “We have already made progress towards our interim climate targets with sustainable aviation fuel powering our flights out of London, more fuel-efficient aircraft arriving every month and a mature carbon offset programme.
“We need to turbocharge these efforts if we are to cut our carbon emissions by 25 per cent by 2030 and have net zero emissions by 2050.
“We’re backing our targets with an expanded investment of up to AU$400 million to help projects get off the ground, because it’s new technologies and bringing proven solutions to scale that will deliver the emissions reductions we need and protect the future of travel in the process.
“Without the right policy settings and signals we will see investment, projects and feedstocks move offshore to places with specific policy support. We look forward to working with government and the rest of the industry to ensure we capitalise on this opportunity for Australia.”
Strategy update
Qantas also unveiled its latest long-term strategy up to 2030 to investors, which will focus on post-Covid “renewal and growth”.
This includes adopting a “right aircraft, right route” approach as Qantas receives more efficient new next-generation aircraft. The airline is also planning to overhaul its app to give customers more control over their bookings, as well as introducing baggage tracking.
Qantas expects to benefit from the introduction of Airbus A350 aircraft to the fleet alongside its Project Sunrise initiative, which will allow the carrier to start operating the first non-stop flights from Sydney to London and New York from late 2025. These developments are forecast to lead to a “significant incremental earnings increase” for the group.
Outgoing group CEO Alan Joyce said: “This is a structurally different business than it was before Covid, operating in markets that have also changed. We’re very well placed to take advantage of the opportunities that creates and the detail we’ve released today shows our strategy to do it.
“New technology is central to our plan and the next-generation aircraft that have started arriving will transform our network over the next few years. We’ll be able to serve our customers better, reduce our cost base through lower running costs and carve out some new competitive advantages.”