Tourism and Transport Forum says without a sustainable aviation fuel industry travellers will pay more

The Australian

Anthony Albanese is facing urgent calls to decarbonise the aviation industry by investing in sustainable fuel, with a leading tourism body warning Australians will pay more to travel overseas without new commonwealth funding.

After presenting Treasury with the Tourism and Transport Forum’s pre-budget submission, chief executive Margy Osmond said the government must commit to a minimum of $300m over the forward estimates to help Australia produce its own sustainable aviation fuel and develop a local industry.

“Popular holiday spots like Japan and the UK will require 10 per cent sustainable aviation fuel for flights arriving at their airports from 2030. If Australian airlines don’t have enough SAF to meet those mandates, we could see penalties passed onto passengers through higher airfares,” Ms Osmond said.

“The federal government needs to act now. The entire industry agrees we need significant funding in the budget to support the development of a domestic SAF industry, without delay. Producing our own SAF would also benefit our farmers who provide the feedstocks, and create up to 15,600 jobs by 2050, contributing more than $7bn a year to the economy.”

Airlines have set a target of net zero carbon emissions by 2050 through initiatives such as SAF, electrification, green hydrogen and offsets.

Tallow (animal fat) and canola oil can be used in SAF but huge amounts in Australia are shipped offshore because of other governments’ incentives.

The Australian Renewable Energy Agency last year announced a $30m grants process to support the development of domestic SAF production from agricultural feedstocks.

Ms Osmond said Canada, the United Kingdom and United States had already committed to hundreds of millions of dollars – even billions of dollars – of investment in sustainable aviation fuel.

The UK also planned to build at least five commercial SAF plants by 2025 but, so far, Australia had none.

The TTF’s pre-budget submission also recommends reversing the government’s 2023 budget decision to increase the passenger movement charge from $60 to $70, which is due to take effect from July.

All passengers leaving Australia by air or sea must pay the tax, which is expected to raise $520m over three years.

Noting tourism was one of the hardest hit industries from the Covid-19 pandemic, the peak body wants a five-year freeze on the charge and transparency over what the raised taxes are spent on.

“We understand that the extra revenue will be reinvested back into the Department of Home Affairs but it’s vital this funding goes into industry related activities,” the pre-budget submission states.

“These factors create barriers for travel and impact the tourism industry when the federal government should be looking to support the sector as much as possible.”

A new survey of 1000 Australians conducted by Pure Profile for the TTF earlier this week found 86 per cent of respondents supported the development of a local SAF industry but 77 per cent had not previously heard of the term “sustainable aviation fuel”.

Infrastructure and Transport Minister Catherine King’s spokeswoman said aviation was critical to Australia’s way of life and the government was committed to working with stakeholders to “ensure a strong and sustainable aviation sector” that supported emissions reduction targets while growing jobs and innovation.

“We have established the Australian Jet Zero Council, which brings together a cross-section of senior stakeholders from across the aviation sector and its supply chains to lead efforts to deliver net zero aviation in Australia,” the spokeswoman said.

“This council is working with the sector to identify opportunities for industry and government to collaborate in achieving emissions reduction targets, including through sustainable aviation fuels and emerging technology, and to promote, mobilise and galvanise industry’s own efforts.

“The government also committed to an aviation white paper process that is exploring how to maximise the aviation sector’s contribution to achieving net zero carbon emissions, including through sustainable aviation fuel and emerging technologies.”