IFM Investors and Australian agribusiness and processing company, GrainCorp, have agreed to work together on an initiative to explore the use of agricultural feedstocks to produce sustainable aviation fuel (SAF) in an effort to decarbonise the sector.
The two partners will assess the long-term potential for a major sustainable fuels production industry in Australia, including an initial feasibility study for a SAF facility capable of producing a targeted 720,000 metric tonnes of renewable fuels annually.
“As the only island continent, Australians know how important air travel is to keep us connected at home and with the rest of the world, whether it is for work, holidays or seeing loved ones. Through this initiative, we will explore the opportunity to build a new industry that can help bring down carbon emissions in the aviation sector, take advantage of Australia’s natural advantages and create jobs,” said Danny Elia, IFM Investors’ global head of asset management.
“We are working closely with others in the sector to find ways to help the aviation sector grow while reducing its carbon footprint as part of the energy transition.”
IFM and GrainCorp will work together to examine the long-term feedstock supply, including waste and residues, bio-organics and novel crops, as well as key feedstock and SAF end user market locations. This will also include an assessment of best-in-class sustainable farming practices, including opportunities to continue reducing the carbon intensity of feedstock product for sustainable fuels.
According to the International Air Transport Association, SAF could contribute up to 65% of the emissions reductions required for the global aviation sector to reach net zero by 2050.
Australia is considered to have a comparative advantage over other countries due to its agriculture capability and land availability, with CSIRO finding that Australia has sufficient feedstock to produce approximately 5 billion litres of sustainable aviation fuels and supply around 50% of forecast jet fuel demand in 2025.
Currently, however, Australia does not have the refining capabilities required to produce SAF domestically, which means that feedstock is being exported, refined and purchased in the form of renewable fuel offshore.
GrainCorp CEO, Robert Spurway, added: “The need for sustainable aviation fuel continues to grow and, here in Australia, we have a significant opportunity to be at the forefront of global feedstock and renewable fuel supply. For GrainCorp, this is an opportunity to help build a valuable new domestic market for Australian farmers and feedstock producers.”