Australia Post, Woodside Energy to offset carbon footprint through sustainable aviation fuel investment

Five of Australia’s biggest companies will pay a premium to offset the cost of their air travel through investing in sustainable aviation fuel rather than traditional carbon offsetting programs.

Australia Post, KPMG, Macquarie Group, Woodside Energy and Boston Consulting Group are the first corporate partners of Qantas’s fledgling “sustainable aviation fuel coalition”, in which members will reduce about 900 tonnes of their air carbon emissions through contributing to reducing the cost of the in-demand fuel.

Qantas boss Alan Joyce, who challenged the government to invest in local development of the biofuel last month, said the corporate commitment was a “key step” to creating the industry.

“The demand for SAF [sustainable aviation fuel] has never been higher, but supply is lagging well behind, particularly without a local industry in Australia, and that’s keeping prices several times more expensive than traditional jet kerosene,” Joyce said on Friday. “The more leading corporates that join our program/coalition the more feasible a local industry becomes and the more cost-effective the fuel becomes.”

Sustainable aviation fuel is considered to be the industry’s ticket to neutralising its carbon footprint, but there’s only enough produced to replace less than 1 per cent of the world’s flying, at more than double the price of jet fuel. As it stands, Australia does not have a local supply of the fuel – made from bio feedstock including used cooking oil, animal tallow and other waste products – but Qantas has invested $307 million into developing the industry with Airbus, and has committed to transitioning to 10 per cent sustainable fuel by 2030 and 60 per cent by 2050.

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The five companies will initially contribute to the cost of up to 10 million litres used by the carrier on flights out of London’s Heathrow Airport. This investment translates to about 15 per cent of the fuel burden the airline consumes on the route.

In 2025, members of the corporate program will subsidise a further 20 million litres a year on flights out of Los Angeles and San Francisco. Qantas would not comment on how much the investment would cost each company due to market sensitivities.

Australia Post is the first government business that has formally supported the federal government’s commitment to net-zero by 2050 and chief executive Paul Graham said joining the fuel program was “critical” to meeting this target.