Exploring the use of agricultural feedstocks to produce sustainable aviation fuel (SAF), is the focus of a new initiative announced by IFM Investors, in a memorandum of understanding with GrainCorp.
The companies will conduct feasibility studies on sustainable fuel production in Australia, through long-term domestic feedstock supply including waste and residues, crop-based oils, and bio-organics.
IFM is focused on the potential to deliver sustainable fuel production facilities in Australia, and this initiative is the first step in a commitment to work with policy makers and the aviation sector to help boost efforts to decarbonise the industry through the use of SAF.
The International Air Transport Association has estimated that SAF, which is produced from sustainable sources including feedstocks and agricultural produce, could contribute up to 65 per cent of the emissions reductions required for the global aviation sector to reach net zero by 2050.
Australia has 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 per cent of forecast jet fuel demand in 2025.
As a consequence, Australia is well placed to become a significant global producer of SAF, and become an active participant in the new high value-add sustainable fuels industry, contributing to Australian GDP, securing Australian jobs and strengthening the nation’s energy security.
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.
Airplane refuels on the tarmac. Photographer Tobias Titz.
IFM Investors’ portfolio companies include every major airport in Australia and other airports globally, while GrainCorp is the largest processor of renewable feedstocks in Australia and New Zealand.
GrainCorp CEO Robert Spurway said it’s a great opportunity for the Australian agriculture industry.
“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,” he said.
For GrainCorp, this is an opportunity to help build a valuable new domestic market for Australian growers and feedstock producers.
Robert SPurway, GrainCorp CEo
“We are excited to participate in this initiative with IFM Investors and look forward to finding effective ways to help reduce carbon emissions in the aviation industry.”
IFM Investors Global Head of Asset Management Danny Elia said Australians know how important air travel is to keep us connected with the rest of the world.
“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,” he said.
“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.”
The feasibility initiative will examine and assess the following:
long-term feedstock supply, including waste and residues, bio-organics and novel crops;
key feedstock and SAF end user market locations;
best-in-class sustainable farming practices, including opportunities to continue reducing the carbon intensity of feedstock product for sustainable fuels;
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.
Ensuring Australia makes the most of its competitive advantages and becomes a global producer of sustainable aviation fuel will also require industry and government working together to achieve the right policy settings.
IFM Investors and GrainCorp are engaging and will continue to engage with state and Commonwealth governments, as well as the Jet Zero Council and major Australian airports to support the policy solutions needed to enable investment and deliver jobs in a new value-add industry.
About IFM Investors
IFM Investors was established more than 25 years ago with the aim to invest, protect and grow the long-term retirement savings of working people. Owned by a group of Australian pension funds, the organisation has A$217 billion under management as at 31 March2023. Because IFM is owned by industry pension funds, we prioritise the interests of 640 like-minded investors worldwide by focusing on assets that combine excellent long-term risk/reward characteristics with broad economic and social benefits to the community. As a signatory to The United Nations-supported Principles for Responsible Investment, IFM actively engages on ESG issues with the companies in which we invest with the aim of enhancing their net performance while minimising investment risk. Operating globally from offices in Melbourne, Sydney, London, Berlin, Zurich, Amsterdam, New York, Hong Kong, Seoul and Tokyo, IFM manages investments across infrastructure, debt, listed equities and private equity assets. For more information, visit www.ifminvestors.com
