Australia’s homegrown sustainable aviation fuel industry takes off

The Albanese and Miles Governments are partnering to support a homegrown sustainable aviation fuel (SAF) project that will convert ethanol – made from agricultural waste – into jet fuel.

The project, with a total value of $36.8 million, would support the development of a Townsville production facility capable of producing approximately 110 million litres of low carbon liquid fuels such as SAF and renewable diesel each year.

Jet Zero Australia has formed a consortium of partners to support delivery of the project with the technology to be supplied by LanzaJet with Qantas, Airbus and Idemitsu Kosan among the key investors.

Through the Australian Renewable Energy Agency (ARENA), the Commonwealth has committed $9 million, with the Queensland Government contributing an additional $5 million through the Queensland New-Industry Development Strategy (QNIDS) to grow local production capabilities and establish SAF value chains in Queensland.

The project will include a Front-End Engineering Design (FEED) study and further project development work to assess the viability of a subsequent commercial scale alcohol-to-jet (ATJ) production renewable fuels facility.

This will see agricultural byproduct-based ethanol being converted into low carbon liquid fuels. The project is due for completion in late 2025.

Based on initial modelling, the Townsville plant could cut net domestic aviation carbon emissions by 70% compared to conventional fossil fuel use, displacing up to 225,000 tonnes of CO₂ annually.

Domestic aviation accounts for about 2 per cent of Australia’s greenhouse gas emissions and is viewed as a hard to abate sector, with the bulk of emissions from medium to long haul flights.

Sustainable fuels will play an important role as global economies transform to net zero, and as part of the $22.7 billion Future Made in Australia package, we can help unlock investment and create jobs.

LCLFs are a priority sector in the package, with initiatives identified to support the growth of new industries to benefit communities and workers.

In the 2024-25 Federal Budget, the Government announced a number of measures to support a domestic low carbon liquid fuels industry, including $18.5 million over four years to develop a certification scheme for these fuels. 

The Government also committed $1.5 million over two years to undertake an impact analysis of the costs and benefits of demand-side measures for sustainable fuels, which will complement this targeted consultation.

Quotes attributable to Minister for Climate Change and Energy, Chris Bowen:

"The Albanese Government is supporting the airline industry to become more sustainable and drastically reduce emissions.

“This government committed $30 million for ARENA to invest in projects seeking to develop domestic sustainable aviation fuel production. It is great to see that investment starting to pay dividends.”

“Townsville brings together outstanding renewable energy resources along with its port and its people. This brings our investment in renewable hydrogen and fuel projects in Townsville to well over $100 million.”

Quotes attributable to Minister for Infrastructure, Transport, Regional Development and Local Government Minister, Catherine King:

“This is yet another demonstration of the Albanese Government, working in partnership with other levels of government and industry, getting on with the job of supporting a sustainable aviation sector – one that backs future jobs and a lower carbon footprint.

“An Australian low carbon liquid fuel industry will not only support our transport sector to decarbonise, it will also create exciting new jobs as part of our plan for a Future Made in Australia.”

 Quotes attributable to Queensland Minister for State Development and Infrastructure, Grace Grace:

“The Miles Government is a strong supporter of Queensland’s growing SAF industry and we’re proud to be contributing to this exciting project.

“We know that our investment in SAF will help to deliver significant economic benefits for Queensland, including more jobs and more investment.

“We’re already funding a feasibility study into the new Wagner SAF Refinery as well as Energreen’s new processing facility in Central Queensland, which aims to grow SAF feedstock, and we will continue to build on these investments through our Queensland New ‑Industry Development Strategy.”

Quotes attributable to Queensland Member for Mundingburra Les Walker:

“There is huge potential in Townsville to diversify our industry and because of this government’s investment we have the infrastructure in place to enable projects like this to go ahead.

“We’ve developed the Townsville State Development Area to enable projects like this which will create good jobs for the city now and into the future.”

Quotes attributable to Queensland Member for Townsville Scott Stewart:

“There is great potential in creating jobs through projects like this which is why we are working with the Commonwealth Government to back Townsville’s future.

“We know how important it is for the city to leverage off its existing strong industries but we want to ensure there is new sustainable jobs for the future which is what this project will do.”

ENDS

Media contact:

Minister Bowen – bowenmedia@dcceew.gov.au