Air Canada and Airbus have announced plans to establish a joint investment platform aimed at supporting the development of commercial-scale sustainable aviation fuel production in Canada. Through the platform, the two companies intend to invest up to approximately CAD 13.7 million, equivalent to US$10 million, in projects related to SAF production.

The cooperation is intended to accelerate the development of at least one Canadian sustainable aviation fuel project toward a final investment decision. Air Canada and Airbus emphasise that an appropriate regulatory framework and support from federal and provincial authorities will also be necessary to establish a competitive domestic market.

The companies are also working with the Canadian Council for Sustainable Aviation Fuels, C-SAF, to align private investment, public policy and the development of domestic production capacity. The ultimate objective is to improve the availability of renewable fuels for Canada’s aviation sector while maintaining the affordability of air travel.

Air Canada Vice President of Airport Affairs, Corporate Real Estate and Sustainability Valerie Durand said the joint initiative with Airbus represents an important step in the energy transition of Canadian aviation.

According to Durand, the project should support domestic SAF production, help corporate customers address emissions associated with business travel and contribute to a long-term reduction in the aviation industry’s carbon footprint.

Airbus Chief Sustainability Officer and Communications Julie Kitcher stressed that aviation decarbonisation will require long-term cooperation across the industry, as well as significant investment in new renewable energy sources.

Kitcher said Canada has considerable potential in terms of the feedstocks required for sustainable aviation fuel production. Combined with suitable public policies, the development of such an industry could contribute to emissions reductions, economic growth and job creation.

Alongside the joint investment platform, Airbus has also signed a five-year agreement to participate in Air Canada’s Leave Less Travel programme. The programme is designed for corporate customers seeking to support the use of SAF and reduce emissions associated with business travel.

As part of its first allocation, Airbus will purchase verified environmental attributes associated with more than 60,000 litres of sustainable aviation fuel. Air Canada will track greenhouse gas emissions generated by business travel undertaken by Airbus employees and retire the corresponding environmental attributes on the company’s behalf.

Such mechanisms do not necessarily mean that SAF is physically supplied to the aircraft used by a particular passenger. Instead, they allow companies to finance its use within the wider fuel supply system. Corporate customers thereby stimulate demand and market development, while the associated emissions reductions are recorded through a certified accounting system.

Air Canada is also linking SAF development with the modernisation of its fleet. The Canadian carrier is introducing more efficient aircraft, including the Airbus A321XLR and the Canada-built Airbus A220. These aircraft consume less fuel than the models they replace, while SAF could further reduce their life-cycle emissions.

Air Canada and Airbus support the aviation industry’s ambition to achieve net-zero carbon emissions by 2050. Sustainable aviation fuel is regarded as one of the most important tools for reaching that target, particularly because it can be used in existing aircraft and fuel supply systems with limited technical modifications.

Airbus and consulting firm ICF have also published a macroeconomic study indicating that Canada has significant potential to develop an aviation biofuels industry.

According to the study, producing enough SAF to cover 40% of Canada’s aviation fuel demand by 2040 could add CAD 32 billion to the country’s gross domestic product and support the creation of approximately 140,000 jobs.

The economic benefits could be distributed across agricultural, forestry and urban regions, depending on the types of feedstocks used, the production processes selected and the locations of future facilities.

Sustainable aviation fuel is an umbrella term for a family of alternative synthetic fuels produced from renewable feedstocks. It is chemically similar to conventional jet fuel, but is made from non-fossil sources and can therefore deliver lower greenhouse gas emissions over its full life cycle.

The announced cooperation between Air Canada and Airbus is intended to address both supply and demand. The investment platform is focused on developing production capacity, while the Leave Less Travel programme is expected to increase corporate demand for SAF and its associated environmental attributes.

However, the project’s full potential will depend on regulatory support, feedstock availability, production costs and the industry’s ability to narrow the price gap between sustainable and conventional aviation fuel.