This collaboration between Airbus and Air Canada is an important advancement in Canada's efforts towards aviation decarbonisation, as they launch a joint initiative to drive the growth of the country's commercial sustainable aviation fuel (SAF) industry. The two companies announced that they will create a Sustainability Co-Investment Platform with a joint investment fund, to help advance projects focused on increasing domestic SAF production. To mark the occasion, Airbus and Air Canada will provide an investment of up to CAD$13.7 million (US$10 million) and the platform will be a catalyst for expanding the scope of participation in the Canadian aviation and clean energy industries.

The investment is being made as a result of the rising pressures on the aviation sector to lower greenhouse gas emissions while continuing to grow airline passenger and cargo volumes. SAF has been identified as one of the most promising technologies since it has the potential to reduce lifecycle emissions substantially from traditional jet fuel. Production capacity is still low, costs are still high and infrastructure is still not well developed, which still limit its widespread use. Airbus and Air Canada are seeking to address these challenges by working together to develop a more robust domestic supply chain for SAF, with the help of the new co-investment platform.

Focus on Expanding Canada’s SAF Production Capacity

One of the key goals of the partnership is to quickly move a project in the U.S. that can be accelerated to a joint Canadian sustainable aviation fuel project closer to a Final Investment Decision (FID) needed before a project can enter a large-scale commercial development. The companies are convinced that by moving forward with a project they can advance a domestic production project to support Canada's aviation fuel supply, as well as minimize the use of imported lower carbon fuels.

Airbus and Air Canada will invest in the project via the Sustainability Co-Investment Platform, but both companies emphasized that wider collaboration will be key to commercialisation for large-scale production. They plan to keep interacting with both national and regional governments, industry players, and other stakeholders to develop policy signals and funding options that will support additional investments in Canada's growing SAF market.

This is addressing aviation's biggest source of emissions.This is dealing with the largest source of emissions in aviation.

Despite the fact that biofuel as a fuel source is still the most significant source of greenhouse gas emissions generated by the aviation industry, it is an important consideration for airlines and aircraft manufacturers around the globe as they look to transition to alternative fuels. Sustainable aviation fuel derived from renewable feedstocks like waste oils, sustainable materials from agriculture and other sustainable resources. SAF can help significantly lower lifecycle GHG emissions, depending on the production route, when compared to conventional fossil-based jet fuel.

Nevertheless, SAF is still in use in only a small proportion of aviation fuel consumption. Production is still small and prices are much more expensive than traditional aviation fuels. Therefore, increasing production volume and enhancing market demand are seen as critical factors to bring SAF to commercial and general aviation engine sales.

Corporate Programme to Support SAF Demand

Airbus and Air Canada also unveiled a new deal under Air Canada's Leave Less Travel Program. The programme allows corporate customers and cargo freight forwarders to buy environmental attributes from Scope 3 of sustainable aviation fuel or carbon offset credits for business travel and cargo transportation.

Airbus will be involved in the programme for five years in the agreement. SAF environmental attributes for over 60,000 litres will be purchased by the aircraft manufacturer as its initial allocation. Air Canada will track the GHGs resulting from Airbus' corporate travel and Airbus will retire confirmed SAF environmental attributes on their behalf, enabling the environmental benefits to be included in Airbus' corporate GHG reporting.

The programme represents one of the many initiatives that airlines are implementing to offer their corporate customers the chance to lower the footprint of their air travel, especially with the rise in Scope 3 reporting and corporate customer climate goals.

Business leaders emphasize long-term partnership.Business leaders emphasize long-term partnership.

Air Canada Vice President Airport Affairs, Corporate Real Estate and Sustainability, Valerie Durand, commented on the announcement in saying it is an important step in helping to drive progress in Canada's aviation energy transition. She said the partnership should help stimulate SAF production locally, help corporate customers reduce their emissions from business travel and help bring down SAF's from the aviation industry by 2030. Durand also noted that continued collaboration among industry and supportive government policies will be key in helping to drive SAF deployment in Canada.

Julie Kitcher, Chief Sustainability Officer and Communications at Airbus, stated that the co-investment platform will help strengthen both the supply and demand for SAF in Canada, while the company's long-term investment in Air Canada's Leave Less Travel Program will help drive demand.

In support of Long-Term Climate Goals:In support of Long-Term Climate Goals:

This is in line with Air Canada's overall climate commitments made in 2021. The airline has committed to becoming a net-zero carbon airline by 2050, across the entire worldwide footprint. Air Canada's goal of 20 per cent reduction in net GHG emissions from its flight operations and 30 per cent reduction in GHG emissions from its ground operations are interim milestones. The carrier also has plans to allocate $50 million to sustainable aviation fuel and carbon reduction and removal projects.

The partnership fits into Airbus' broader ambition of helping the aviation industry to move towards low-carbon operations by accelerating sustainable aviation fuel (SAF) availability and uptake. Initiatives that integrate investment, policy action and company involvement are likely to become more and more significant in helping to scale up SAF production and drive aviation's decarbonisation, as governments, airlines and manufacturers work towards global climate targets.