Airport investor IFM to bet A$1b on clean fuel expansion

IFM Investors Pty, the Australian asset manager with stakes in airports from Sydney to London, plans to spend more than A$1b ($651m) ramping up domestic production of sustainable aviation fuel. Depending on the amount of feedstock available to make the fuel, IFM’s investment — one of the largest financial commitments yet in an area that’s key to decarbonizing air travel — could swell to A$2b within five years, Danny Elia, the firm’s global head of infrastructure asset management, said. IFM aims to propel use of the cleaner-burning jet fuel to 10% of Australia’s total by 2030. “We’ve got a vested interest in facilitating cleaner flying,” Elia said in an interview. “If we don’t, all parts of the community will see that it’s unacceptable to travel.” IFM’s pledge reflects a growing recognition that aviation’s social license to operate, as well as its commercial future, hangs on a comprehensive carbon cleanup. Sustainable aviation fuel (SAF), made from agricultural feedstock or waste oils, can cut aircraft emissions by as much as 80%, according to the airline industry. But time and money aren’t on aviation’s side. Some $5t of investment may be needed to reach a goal of carbon neutrality by 2050, much of it plowed into sustainable fuel production, the International Air Transport Association says. Even though the current global supply of green fuel is less than 1% of total requirements, SAF has emerged as the most powerful tool to reduce pollution from air travel, which accounts for 2.5% of global carbon emissions. Electric planes don’t have sufficient range, and hydrogen propulsion isn’t expected to make a meaningful impact for decades. At last week’s Singapore Airshow, frustration boiled over with the current dribble of SAF. Boeing Co. accused the world’s biggest oil companies of inaction. IATA Chief Willie Walsh also implored them to make more, calling it an “existential issue” for the airline industry.<br/>