Canada: Airlines call for road map to increase production of sustainable jet fuel

Airlines are calling on the federal government to roll out measures that will spark production of sustainable aviation fuel in Canada. Investors and would-be suppliers need incentives to start churning out the greener oil, a pair of industry groups said. They’re hoping Ottawa can match new programs in the United States and ultimately help cut airplane pollution, which accounts for about 2% of global carbon dioxide emissions, according to the International Energy Agency. The country’s long history of resource development, agriculture, renewable energy and aircraft manufacturing should put it at the forefront of the push for greener skies, according to the Canadian Council for Sustainable Aviation Fuels and the National Airlines Council of Canada. However, Canada has yet to commercially produce any sustainable aviation fuel, also known as SAF. Typically derived from used cooking oils, animal fats or organic waste, the product shaves off about 80% of a plane’s emissions. Airlines have two main requests for Ottawa to foster fuel-making factories and long-term production: an investment tax credit at a rate of 50% on manufacturing facilities, and a production tax credit with a 10-year horizon — on par with an incentive south of the border. (Commodity price contracts that aim to put a floor price for SAF would be one alternative to the latter.) American producers are already eligible for a tax credit of up to US$1.75 per gallon under the Inflation Reduction Act. “Compare that to Canada, which is nothing,” said Jeff Morrison, who heads the national airlines council. “If you’re an energy company and you’re looking at SAF as an opportunity and you’re looking, ‘Where do I go?’ — it’s kind of a no-brainer.” Last year, the federal government pledged $350m to support decarbonization of the aerospace sector, establishing a national network that backs research and development projects ranging from alternative fuels to aircraft design.<br/>