Australia could get its first refinery for eco-friendly aviation fuel after Qantas, Airbus and the Queensland government committed more than $2.7 million to the biofuel project.
The facility to be built in Queensland could produce up to 100 megalitres of sustainable aviation fuel (SAF) each year, created from agricultural by-products such as sugarcane and feedstock.
The fuel could be used to power domestic flights in Australia, cutting carbon emissions by more than 80 per cent and helping Qantas meet its target of using 10 per cent sustainable aviation fuel by 2030.
Queensland Premier Annastacia Palaszczuk announced the deal on Thursday, revealing the state government would invest $760,000 in the project.
"The global race to lower emissions is now extending into the skies," she said.
"Queensland is perfectly positioned to be a clean energy superpower because we have both the sunshine and feedstocks, including the largest sugar industry in the nation."
Qantas and Airbus will contribute $2m to fund a feasibility study and early development of the refinery, with construction expected to begin in 2024 at an undisclosed site.
If successful, the facility would become the first sustainable aviation fuel refinery in Australia and would be operated by Jet Zero Australia using alcohol-to-jet technology from US firm LanzaJet.
Qantas chief sustainability officer Andrew Parker said producing eco-friendly fuel was critical to reducing carbon emissions in the aviation industry and the project would "kick-start" its domestic production.
"Qantas will be the largest single customer for Australian-made SAF to meet our emissions reduction targets, which is why we're investing in the ideas and technology that will build a local SAF industry," Mr Parker said.
"This is one of several projects that we are looking to fund this year, all of which will help accelerate the decarbonisation of the aviation industry."
Airbus sustainability executive vice-president Julie Kitcher said the company's first joint investment with Qantas should show the industry it was "time to move from commitments to concrete actions" in sustainable fuel.
Bioenergy Australia chief executive Shahana McKenzie also welcomed the investment in the country's budding industry, saying it was a smart way to use "Queensland's vast agricultural might".
Sustainable aviation fuel, which can be used in existing aircraft, has become a major component of many airlines' plans to cut pollution and meet the industry-wide goal of net-zero emissions by 2050.
Large quantities of the eco-friendly fuel will be required to make significant emission cuts, however, with the industry forecast to be worth more than $23.5 billion by 2030, according to Research and Markets.
Qantas is expected to need 500ML of sustainable aviation fuel to meets its 2030 target and has already committed to buying some sustainable fuel produced overseas, including 10ML for London flights in 2023, and 20ML for flights from California in 2025.
