A $10-billion aviation biofuel industry could take off in Australia, creating a new agriculture sector, within the next two years, according to a new report.
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The CSIRO released a roadmap outlining how Australia could kick start a domestic sustainable aviation fuel (SAF), generating up to five billion litres in 2025.
The world's airlines are transitioning to SAF to decarbonise and secure fuel supplies in an unpredictable geopolitical landscape. Unlike conventional jet fuel, SAF is produced from renewable sources and significantly reduces carbon emissions.
The report indicated that Australia had an opportunity to become a major player but required collaboration between the government and the industry to seize it. Although Australia has an abundance of feedstocks - the raw materials used in biofuels - is constrained by its refining capacity.
The roadmap points to biogenic materials such as sugarcane, sawmill residues, animal fats, vegetable oils and agricultural waste as key feedstocks.
The challenges the Australian SAF industry must address include feedstock availability, supply chain constraints and aligning to international standards.
Roadmap author Max Temminghoff said Australia was in a prime position to develop a domestic industry and within a year could supply nearly 60 per cent of annual jet fuel demand - or roughly enough to fuel 640,000 Melbourne-to-Sydney return-flights.
"Through a combination of feedstocks and mature technologies, a large and growing portion of Australia's jet fuel demand can be met with local materials such as agricultural waste and residues," Mr Temminghoff said.
Australian Sugar Millers Council policy director David Rynne said his industry was closely monitoring the biofuel industry and there were several trials in place.
By investing in increased refining capacity, Australia could quickly ramp up production of SAF. However, Mr Rynne said the fuel is expensive to create and must be produced at scale to overcome the price gap.
"You need really strong demand drivers to make it economical and build up that big scale," he said.
"Something like a mandate that incrementally increases the uptake in aircraft, starting at say two per cent and upping it to five over a couple of years. Once those demand drivers are in place, the supply comes into place."
Currently, there are plants that can refine molasses into ethanol, which can then be turned into SAF. Second-generation refineries are being trialled, which can use "tops and trash" - the green waste - of a cane harvest.
"Down the track there will be a consideration for us as growers about how much we lay as a green blanket for soil health and moisture retention, and how much is used for biofuels," Mr Rynne said.
Boeing regional sustainability lead and roadmap co-author Heidi Hauf said a local SAF industry would also generate more jobs and new export markets.
"Currently, Australia imports 90 per cent of its liquid fuel, including jet fuel, through long supply chains exposed to geopolitical and climate change risks, and delays associated with quality issues, placing the country in a vulnerable position when it comes to jet fuel security," Ms Hauf said.
"With alternative technologies such as battery and fuel-cell powered planes still limited in long-haul capabilities and the increasing competition for carbon offsets, SAF offers the largest potential for reduced aviation emissions in the near-term."