Air Canada & Airbus Unite to Encourage a Canadian Sustainable Aviation Fuel Industry

Air Canada and Airbus have announced plans to establish a jointly funded Sustainability Co-Investment Platform that aims to build the foundations of a commercial-scale Sustainable Aviation Fuel (SAF) industry in Canada.

This agreement states a shared objective to invest up to approximately $13.7 million through the platform. The companies says that with a supportive public policy framework in place, the investment will serve as a catalyst for the broader Canadian SAF ecosystem.

While Air Canada and Airbus intend to drive this investment, both companies say they look forward to continuing their constructive collaboration with government partners to establish the right structural frameworks to support SAF production to emerge at scale in Canada. 

By aligning industry initiatives with supportive public policy mechanisms, the partners believe they can successfully champion domestic SAF production and price competitiveness, with the objective to make renewable fuels available for the Canadian aerospace industry and to preserve affordability of air travel.

“Air Canada is proud to help advance aviation’s energy transition in Canada. Through this joint initiative with Airbus, we are taking meaningful steps toward supporting domestic SAF production, helping corporate customers address the emissions associated with business travel, and contributing to a lower-carbon path for the industry,” said Valerie Durand, VP, Airport Affairs, Corporate Real Estate and Sustainability at Air Canada.

“I want to thank Air Canada for this very important joint sustainability initiative. Decarbonizing aviation will require deep industry collaboration and decades of investment in new sources of renewable energy,”  aid Julie Kitcher, Airbus Chief Sustainability Officer and Communications.

By launching this co-investment platform and making a long-term commitment to Air Canada’s Leave Less Travel Program, we will help to stimulate the production of, and demand for, SAF in Canada. The country has a vast feedstock potential. When combined with a supportive policy framework, it can contribute to the sector’s decarbonization ambitions and create significant economic growth and job creation.” 

The use of renewable fuels, such as SAF, complements Air Canada’s extensive fleet modernization strategy, featuring more fuel-efficient aircraft like the long-range narrow-body Airbus A321XLR and the Canada-built Airbus A220. 

Air Canada and Airbus say they both fully support the aviation aspirational climate ambition set by IATA, ATAG and ICAO to reach ‘net-zero carbon emissions by 2050’, with SAF as a critical component to such pathway.

But it won’t be an easy path. The International Air Transport Association (IATA) has released estimates showing that global Sustainable Aviation Fuel (SAF) production is expected to reach around 2.4 million tonnes in 2026, representing just 0.8% of aviation fuel use, at a cost to airlines of $4.3 billion.

“It looks to be another disappointing year for SAF production,” said Willie Walsh, IATA’s Director General. 

“Five years after committing to achieve net zero by 2050, SAF production will only account for 0.8% of airline fuel use this year. The path to meeting 65% of our needs in 2050 is growing more difficult with each year of ineffectively sequenced government policies and oil companies’ manifest lack of interest.”

However, a new macroeconomic study by Airbus and ICF highlights Canada’s significant potential to lead in aircraft biofuels production.

The study reveals that scaling domestic SAF to meet 40% of Canada’s aviation fuel demand by 2040 could add $32 billion to the national GDP and create 140,000 jobs across agricultural, forestry, and urban regions. 

By establishing a solid platform for corporate investment and support, the Air Canada and Airbus partnership serves as an immediate catalyst to support these multi-billion-dollar economic returns while advancing the development of a domestic SAF ecosystem. Consult the full report on our website.

To learn more about SAF, visit the Air Canada SAF page or Airbus commitment to sustainable aviation fuel.