MELBOURNE – Airbus and Qantas Airways plan to announce the first investment from a US$200 million (S$270 million) fund to develop a sustainable aviation fuel (SAF) industry in Australia within about a month, an Airbus executive said on Monday.

The companies established the fund last year after Qantas set a target of using SAF in 10 per cent of its fuel mix by 2030 and placed a multibillion-dollar order for Airbus narrow-body and wide-body planes.

Australia lacks an SAF industry, meaning Qantas’ purchases of the fuel are made at overseas airports.

Mr Stephen Forshaw, Airbus’ chief representative for Australia, New Zealand and the Pacific, said the plane manufacturer and Qantas were meeting weekly to discuss US$1 million-plus investments in early-stage SAF projects in Australia.

“The first investment has been made but not fully closed yet,” Mr Forshaw said in an interview ahead of the Australia International Airshow, which begins on Tuesday. “We have both agreed to it, and I think we will make some announcements probably in the next month or so around the completion of that.”

Qantas declined to comment.

Mr Forshaw said most of the investments being considered involved seed funding, where the partners might take a minority equity stake.

“Some of them may be even earlier than Series A. What it may do is provide us with the opportunity or right of first refusal to go in at Series A or Series B or beyond,” he said. “And then the pace will determine whether we want to do that or whether we see it is time to open it up to other investors.”

He declined to say what type of project was planned for the first investment but said that in the longer term, Australia had a lot of potential to use solar power for projects that would help meet demand, given limited feedstock available from sources like oils and fats.

Qantas chief sustainability officer Andrew Parker last week told analysts that the airline could meet its 2030 target of 10 per cent SAF solely through purchases in London and California if needed, but noted that 70 per cent of the airline’s total fuel was sourced from Australia.

“We know we have to play a lead role in developing a domestic industry,” Mr Parker said, adding that there could be local production by the second half of the decade.

Qantas expects about 60 per cent of its fuel to be SAF by 2050 to meet its target of net-zero emissions by that date. REUTERS