Asia Pacific is facing a lack of uniform policy in transitioning to sustainable aviation fuel (SAF) despite the region accounting for almost 32 percent of global air traffic and more than a third of global jet fuel demand.
ING’s research showed that Asia’s initiatives lag behind those of Europe, where the European Union’s ReFuelEU program mandates 6 percent SAF use by 2030.
Among APAC countries, only Japan, Singapore, India, Taiwan, and Malaysia have announced clear plans for using SAF.
While Australia has yet to announce a specific target, Qantas said it aims for SAF to account for 10 percent of its fuel by 2030 while pushing for a SAF mandate.
Meanwhile, South Korea expects to introduce a SAF mandate by 2026 and Indonesia hopes to introduce a 5 percent SAF mandate starting in 2025.
When looking into SAF offtake agreements in the region, ING said that demand is likely to fall short of government targets. The only transaction that stands out in the region is the 76 million gallons offtake agreement for Kuala Lumpur International Airport in Malaysia starting in 2027 .
Despite the lack of demand, ING data showed that APAC is capable of producing more than 1.8 million tonnes (Mt) of SAF, equivalent to less than 1.5 percent of jet fuel use in the region.
The production capacity is expected to grow by up to 1.8 Mt in 2025, reaching as much as 5.1 Mt by 2030, reflecting 4.2 percent of current jet fuel demand.
However, ING noted that some SAF facility projects can get cancelled, citing Shell’s scrapping of plans for a biofuel plant in Singapore and Oceania Biofuels ditching plans for a plant in Australia.
Australia Provides Funding for SAF
Meanwhile, the Australian government has expressed its support in the pursuit of SAF, seeking to convert ethanol made from agricultural waste into jet fuel.The Australian Renewable Energy Agency (ARENA) has allocated $9 million towards this goal. The Queensland New-Industry Development Strategy (QNIDS) has also provided an additional $5 million to Jet Zero Australia to boost local production capabilities and establish SAF value chains in Queensland.
Jet Zero Australia’s alcohol-to-jet technology is licenced by Lanzajet. Its other partners include Airbus, Qantas, and Idemitsu.
The funding will support the development of a Townsville production facility, which can produce about 110 million litres of low carbon liquid fuels such as SAF and renewable diesel annually. The facility is targeted to be completed by late 2025.
It will also include a $36.8 million study to determine the commercial viability of its fuel output, before arriving with a final investment decision.
Domestic Aviation’s Greenhouse Gas Emissions
The Department of Climate Change, Energy, the Environment, and Water (DCCEEW) noted that domestic aviation accounts for about 2 percent of Australia’s greenhouse gas emissions, with most coming from medium to long haul flights.“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,” said Chris Bowen, Minister for Climate Change and Energy.
“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 QNIDS,” said Grace Grace, Queensland Minister for State Development and Infrastructure.
While ARENA noted that aircraft are certified to use blends of up to 50 percent SAF with traditional jet fuel, it also emphasised that Australia is well positioned to produce SAF with its vast feedstocks and vast renewable energy resources.
ARENA’s Bioenergy Roadmap shows that a domestic SAF industry could be worth $10 billion in extra annual GDP and could generate up to 26,200 jobs by 2030, with regional Australia is expected to benefit the most from the additional jobs.
“We'll be taking an active role in making sure the lessons from Jet Zero Australia’s study are shared with the industry at large, helping build a path to large-scale production in Australia,” said Darren Miller, ARENA CEO.
“The funding will help achieve Australia’s transport sector decarbonisation goals, promote fuel security and create regional jobs,” said Ed Mason, Jet Zero Australia CEO.
