The Energy Challenge for Airlines
Jet engines must be powered by energy dense liquid fuel. Jet fuel (kerosene) is the only viable option for aviation for decades to come. As a result of the significant increase in the price of oil, jet fuel now represents the single largest operating cost for Australian airlines. In 2012/13 the Qantas Group spent $4.1 billion on fuel, accounting for 26 per cent of operating costs. Fuel also represented 26% or $1 billion of operating costs for Virgin Australia.
Concerns about jet fuel costs are exacerbated by challenges related to security of supply. Despite assurances from the fuel importers, questions must be raised about the security of Australia’s aviation fuel supply as it becomes almost completely dependent on refined fuel imports.
The aviation sector is also under pressure because of anthropogenic CO2 emissions from resulting from its operations. In 2012, air travel globally accounted more than 2% of anthropogenic CO2 emissions (677 million tonnes) predominantly from jet fuel. This amount and relative percentage will continue to rise as the aviation sector grows and other modes of transport shift to lower emission sources of energy.
The International Air Transport Association (IATA), to which Australian airlines belong, has set aggressive emissions reduction goals, including the target of carbon neutral growth in the industry beyond 2020.
Airlines have limited options to address their fuel challenges. They typically do by:
- Investing in new aircraft
- Aircraft are very capital intensive
- Partnering with airports and air navigation service providers to improve the efficiency of aviation infrastructure
- Airlines have no control over this infrastructure
- Maintaining a strong focus on fuel efficiency
- This can only achieve a 1-2% improvement year on year
Sustainable Aviation Fuels
The development and use of sustainable aviation fuels (SAF) is an equally important way in which the aviation industry can address fuel costs, security and emissions while continuing to grow the industry.
Sustainable aviation fuels have physical and chemical properties that are identical to those in petroleum jet fuel but have lower carbon emissions and meet all other sustainability criteria. Non-negotiable constraints for SAF are that they must drop-in seamlessly to and be interchangeable with petroleum in existing supply lines, ships, aircraft and all other vehicles, have price parity to petroleum, and significantly reduced life-cycle greenhouse gas emissions.
The American Society for Testing Materials is one organization that certifies that a new SAF is fit–for-purpose. This is a well-documented and heavily scrutinized process. It ensures, above all, the safety of SAF as an energy source for flight and also that all requirements of the airline, airframe and engine manufactures are met.
The safety and environmental credentials of SAF have been proven in a large number of test and commercial flights on SAF by commercial airlines around the world including by Qantas and Jetstar.
Australian Initiative for Sustainable Aviation Fuels
The Australian Initiative for Sustainable Aviation Fuels (AISAF) was founded on 8 August 2012 as a public-private initiative by a consortium of leaders as a strategic direction-setting group to facilitate the growth of the Australian sustainable aviation fuel industry. Its role was foreseen as being to bring together Australian leaders in the aviation industry and the developing supply chain, and undertake collaborative work with international partners.
The Steering Committee met at the United States Studies Centre for the first time on 20 August 2012. Steering Committee members were drawn from the Australian Government Department of Resources, Energy and Tourism, Baker & McKenzie, Boeing Australia, CSIRO, GE Australia, Qantas Airways, Queensland Sustainable Aviation Fuel Initiative (QSAFI) United States Studies Centre and Virgin Australia.
AISAF expanded its membership to achieve more complete representation of the supply chain and established four Working Groups to drive the agenda forward in Australia and to collaborate with the equivalent Working Groups in the USA established by the Commercial Aviation Alternative Fuels Initiative (CAAFI).
From August 2013, AISAF worked in partnership for twelve months with Aviation Aerospace Australia. In August 2014, AISAF reverted to being an initiative of the Sustainability Program at the United States Studies Centre.
During its 24 months of operation, AISAF:
- Established the SAF industry vision and goals for Australia for the first time
- Brought the emerging SAF industry in Australia closer together
- Highlighted the importance of SAF to the long term future of aviation
- Brought key decision makers together at a number of key events focused on value chain development
- Made submissions to a number of Australian Government policy reviews including the Energy White Paper, Agricultural Competitiveness White Paper and Review of the Renewable Energy Target.
AISAF’s findings included:
- SAF are being demanded by Australian aviation in both the civil and defence sectors
- The Australian aviation industry is taking a long-term strategic approach to creating and building the industry
- The considerable economic benefits for regional, State and national economies. An SAF industry would have direct and substantial impact on GDP; bring new investment and jobs into rural, regional and metropolitan areas.
- The benefits of diversification of energy supply not only for aviation but also for industry sectors dependent on heavy logistics fuels
- The benefits of diversification of the supply of a variety of renewable molecular and bio based products which feed into many other manufacturing sectors
- The potential to generate new export opportunities for Australia
- The major challenges for his emerging SAF industry in Australia are related to deploying existing technologies at commercial scale, driving down costs and reducing risk as much as possible so that investors will finance the build out of new supply chains
- Policies supporting a target of a blend of 5% SAF in all jet fuel loaded at Australian airports and Defence bases by 2018 (equivalent to the US target) would send the right signals to the industry and investors
- Flight Path to Sustainable Aviation Fuels, 2011
- Advanced Biofuels Study. Strategic Directions for Australia (PDF), 2011
- Fuelled for Growth. Investing in Victoria’s Biofuels and Bioenergy Industries (PDF), 2012
- Techno economic analysis of renewable aviation fuel from microalgae, Pongamia Pinnata, and sugar cane, 2012
- Qantas Feasibility Study of Australian Feedstock and Production Capacity to Produce Sustainable Aviation Fuel (PDF), 2013
- Sustainable Mallee Jet Fuel – Sustainability and Life Cycle Assessment, 2014
For more information
Contact Professor Susan Pond at [email protected].
United States Studies Centre
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University of Sydney NSW 2006
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