Air Canada and Airbus are joining forces to develop the sustainable aviation fuel (SAF) market in Canada, creating a joint investment platform to support domestic production. The two companies intend to invest up to approximately CAD$13.7 million, with the aim of the initiative acting as a catalyst for the creation of a commercial-scale SAF market.
The partnership will support a Canadian SAF project through to the final investment decision stage. Air Canada and Airbus are also seeking to work with the federal and provincial governments, as the development of a competitive SAF market requires an appropriate institutional and economic framework.
In addition to investing in production, Airbus has also committed to supporting the use of SAF. Through a five-year agreement with Air Canada’s Leave Less Travel program, it will finance the equivalent of more than 60,000 litres of sustainable aviation fuel, helping to drive demand and wider adoption of SAF by the industry.
The development is particularly important as the transition to lower emissions in aviation does not depend solely on fleet renewal or new aircraft technologies. Sustainable aviation fuels are seen as a key part of the industry’s path towards net zero carbon emissions by 2050, as they can be used in conventional aircraft and engines, without requiring a complete change to existing technology.
The Canadian market presents, according to a study by Airbus and ICF, significant growth potential. If domestic SAF production could meet 40% of Canada's aviation fuel demand by 2040, it could contribute approximately CAD 32 billion to GDP and support up to 140,000 jobs in rural, forested and urban areas.
The Air Canada–Airbus agreement thus highlights a significant shift in the SAF debate from general sustainability commitments to specific investments, partnerships, and mechanisms that can create a functioning market.
Developing SAF is a challenge that goes beyond the boundaries of an airline. It requires collaboration between airlines, aircraft manufacturers, energy producers, governments and corporate customers. The initiative in Canada is a prime example of this approach and shows how investing in the entire SAF chain can be part of the broader energy transition in aviation.
This article first appeared, in Greek, in Hermes Airports' online newsletter, Flight Mode. Click here to view it.
