Australia’s national airline Qantas has announced a significant escalation of its sustainability commitments, revealing that it has dedicated more than AU$100 million from its AU$400 million Climate Fund toward sustainable aviation fuel (SAF) and other decarbonisation initiatives. The announcement comes as the global sustainable aviation fuel market experiences unprecedented growth, with industry projections showing the sector could reach USD 240.6 billion by 2037.
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Strategic Investment in Clean Aviation Technology
Qantas has said that sustainability remains a ‘key priority’ for the airline group, adding that it has committed more than AU$100 million to sustainable aviation fuel (SAF) and other decarbonisation projects. The investment represents a substantial commitment from the carrier as it works toward achieving net-zero emissions by 2050, aligning with the broader aviation industry’s ambitious climate targets set by the International Civil Aviation Organization.
The Australian carrier recently expanded its SAF uptake from Los Angeles, with a commitment to use more than 100 million litres of SAF over the next three years. This commitment forms part of a broader strategy that includes sourcing SAF from multiple international locations, including London’s Heathrow Airport and California-based suppliers.
In addition to direct fuel procurement, Qantas said that it also recently invested AU$15 million in ClimateTech Partners, a venture capital fund that supports climate-focused businesses and projects. This strategic investment demonstrates the airline’s commitment to fostering innovation across the broader sustainable aviation ecosystem.
Building Australia’s Domestic SAF Industry
One of the most significant aspects of Qantas’s sustainability strategy involves developing a local sustainable aviation fuel supply chain. On the domestic front, a partnership with Sydney Airport and a number of large corporate customers enabled the ‘largest ever importation of SAF into the country’, Qantas said, a move that served as a test of Sydney’s fuel infrastructure and demonstrated industry commitment in developing a local SAF supply chain, as well as supportive policy to enable greater SAF production in Australia.
The Qantas Group and Airbus will invest up to US$200 million to accelerate the establishment of a sustainable aviation fuel (SAF) industry in Australia in a landmark agreement. Due to the lack of a local commercial-scale SAF industry, Australia is currently exporting millions of tonnes of feedstock every year, such as canola and animal tallow to be made into SAF in other countries.
The airline has also made strategic investments in domestic production facilities. Agricultural by-products including sugarcane will be turned into jet fuel through investment from the Qantas Group, Airbus and the Queensland Government, at a Queensland biofuel production facility being developed by Jet Zero Australia in partnership with leading sustainable aviation fuel technology company LanzaJet. This facility is expected to produce up to 100 million litres of SAF annually once operational.
Understanding Sustainable Aviation Fuel Technology
Sustainable feedstocks include wastes for which the carbon has already been accounted in the use of the primary product or has been absorbed from the atmosphere in its production. Sustainable feedstocks are broken down through chemical processing before being built back up into a long chain hydro-carbon – making a sustainable jet fuel.
Sustainable fuels cut greenhouse gas emissions by around 80 per cent compared to traditional kerosene and are the most significant tool airlines currently have to reduce their impact on the environment – particularly given they can be used in today’s engines with no modifications. This compatibility with existing aircraft technology makes SAF a crucial bridge solution as the aviation industry develops longer-term zero-emission technologies.
Comprehensive Carbon Reduction Strategy
Beyond SAF investments, Qantas has restructured its approach to carbon offsetting. Qantas has also made adjustments to its Voluntary Carbon Program, with some 70% of its carbon portfolio now comprised of nature-based products, and half of that linked to an Australia-based project. This shift reflects growing industry recognition of the importance of high-quality carbon credits and local environmental benefits.
The airline has also expanded its community engagement initiatives. Elsewhere, Qantas has also expanded its community partnerships, signing a new four-year agreement with Surf Life Saving Australia and a three-year partnership with the Australian Red Cross, as well as donating some AU$2 million in grants to regional community groups.
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Strong Financial Performance Underpins Sustainability Investment
The group reported a 15% increase in underlying profit before tax for the full year, to AU$2.39 billion, and said that it expects ‘ongoing strong travel demand’ into at least the first half of its current financial year. This robust financial performance provides Qantas with the resources necessary to invest heavily in sustainability initiatives during a critical period for aviation decarbonisation.
“For everyone across the Qantas Group, this year has been all about delivery,” commented CEO Vanessa Hudson. “While we are pleased with the progress we are making, we remain focused on further improving our performance and continuing to deliver for our customers, people and shareholders.”
Explosive Growth in Global SAF Market
Qantas’s investments come at a time of extraordinary growth in the global sustainable aviation fuel market. The sustainable aviation fuel market is estimated at USD 2.06 billion in 2025. It is projected to reach USD 25.62 billion by 2030, growing at a CAGR of 65.5%. This represents one of the fastest-growing segments in the energy sector, driven by increasing regulatory pressure and airline commitments to net-zero emissions.
The global sustainable aviation fuel market was valued at USD 1.7 billion in 2024 and is estimated to grow at a CAGR of 46.2% from 2025 to 2034. The aviation industry faces increasing pressure to reduce its carbon footprint, with growing demand for sustainable aviation fuel (SAF) solutions.
Regulatory Drivers and Industry Collaboration
The rapid expansion of SAF adoption is being driven by increasingly stringent environmental regulations worldwide. The European Sustainable Aviation Fuel (SAF) market is experiencing significant growth, driven by stringent environmental regulations and ambitious decarbonization targets set by the European Union. The ReFuelEU Aviation initiative mandates a progressive increase in SAF blending, starting at 2% in 2025 and aiming for 70% by 2050.
Qantas has joined an alliance of airlines, an aircraft manufacturer, and energy and financing companies to help accelerate global production of aviation biofuel. The Sustainable Aviation Fuel Financing Alliance (SAFFA) fund has been formed with anchor-investor Airbus as well as Air France-KLM, Mitsubishi HC Capital Inc., BNP Paribas, Associated Energy Group, and Burnham Sterling Asset Management.
Industry Challenges and Future Outlook
Despite the promising growth trajectory, the SAF industry faces significant challenges. Their greatest concerns centre on the availability and cost of sustainable aviation fuel, along with geopolitical tensions and the tariffs associated with growing protectionism. Currently, SAF can cost several times more than conventional jet fuel, making industry collaboration and government support crucial for scaling production.
The actions that industry and governments across the world take this year will be vital to ensure the aviation sector remains on the right flight path to meet internationally agreed targets, including reducing the carbon intensity of jet fuel by 5% by 2030 and attaining net-zero international aviation by 2050.
Strategic Positioning for the Future
The Qantas Group, which has committed to using 10 per cent SAF in its overall fuel mix by 2030, is sourcing SAF overseas, including 15 percent of its fuel use out of London currently and 20 million litres each year for flights from Los Angeles and San Francisco to Australia from 2025. This diversified sourcing strategy positions Qantas to meet its sustainability targets while supporting the development of global SAF supply chains.
We’ve established Australia’s first coalition program to support the efforts to reduce the environmental impact of aviation through the use of sustainable aviation fuel (SAF). Climate action is more effective together, and the Qantas Sustainable Aviation Fuel Coalition program offers our corporate partners the opportunity to help contribute to the development and future use of SAF.
As the aviation industry navigates the complex challenge of decarbonisation, Qantas’s substantial investment in sustainable aviation fuel represents both a strategic business decision and a commitment to environmental leadership. With the global SAF market projected to grow exponentially over the next decade, early investments in production capacity and supply chain development could provide significant competitive advantages while supporting the industry’s broader sustainability goals.
The success of these initiatives will be crucial not only for Qantas’s own net-zero ambitions but also for establishing Australia as a key player in the global sustainable aviation fuel market, potentially creating thousands of jobs and billions in economic value over the coming decades.
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By: Montel Kamau
Serrari Financial Analyst
1st September, 2025
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