Insight Conversation: Ed Mason, Jet Zero Australia

This seven-part Insight Conversation series examines the opportunities and challenges in Asia's biofuels sector. This third instalment features Ed Mason, CEO of Jet Zero Australia, who talks about the opportunities and challenges in Asia-Pacific's sustainable aviation fuels sector. The next edition features Clarence Woo, Executive Director of Singapore-based Asian Clean Fuels Association which works with goverments and industry on clean fuels policies and adoption.

Ed Mason, CEO of Jet Zero Australia, leverages his over 25 years in financing large-scale energy projects (mining, oil & gas, renewables) to lead the fight against climate change in the aviation industry. This focus on decarbonizing the aviation industry's supply chain makes Ed's insights and leadership valuable for both industry professionals and anyone interested in a cleaner future for air travel.

Jet Zero, an Australian biofuels pioneer, is at the forefront of SAF development, collaborating with aviation industry giants and the Queensland government in pushing the industry forward.

In this interview with S&P Global Commodity Insights Editor Samyak Pandey, Mason dives into Jet Zero's vision for SAF and other biofuel production in Asia and Australia.

What is Jet Zero's vision for SAF production in Asia and Australia?

Jet Zero is focused on SAF development both domestically and internationally, supported by Qantas, Airbus and Idemitsu Japan, as well as the Queensland government. Our current project in Townsville[North Queensland's Townsville State Development Area] aims to produce 100 million liters of SAF by 2027 using LanzaJet's alcohol-to-jet technology.

We see significant potential in the SAF market across the region, driven by global demand expected to surpass from couple of billions to 400 billion liters by 2050, with established mandates in markets like Singapore and Japan.

Scalable agricultural feedstock bases in Australia, alongside a robust infrastructure and the Eastern Seaboard, present export opportunities. Leveraging our agricultural expertise, we explore how waste byproducts can further bolster SAF industry development.

Considering your export ambitions and infrastructure leverage, how do you see product growth and domestic demand playing out in the next few years?

We think this market could be a big exporter to the region. We're already a major exporter of several agricultural products anyway. We foresee significant export opportunities beyond our initial South Australian projects. BP is advancing a SAF Hydro processed Esters and Fatty Acids project in Kwinana near Perth, and AMPOL is exploring options at its Brisbane refinery.

Key crops like canola, barley, wheat, sugar and cotton provide valuable byproducts for SAF production. With domestic mandates under evaluation and voluntary demand estimated at 600 million liters, we're aligned to meet these targets, including Qantas' commitment for their entire fleet by 2030.

Our goal is to export SAF to fulfill mandates in other markets, leveraging Australia's agricultural and infrastructural capabilities.

Could you detail the specific agricultural byproducts targeted by Project Ulysses in Australia and why they are ideal for SAF production?

The project capitalizes on several strategic advantages. It leverages on an abundant agricultural feedstock for future biofuel production and enjoys proximity to a port for efficient transportation. Located in a supportive heavy industrial zone, Townsville's infrastructure investments in renewable fuels provide essential resources like renewable power, feedstocks and hydrogen crucial for SAF production via the ATJ process.

Beyond decarbonization benefits, Townsville serves as a critical Australian garrison hub, enhancing national fuel security amid heavy reliance on imported aviation fuel.

Utilizing agricultural byproducts from a robust southern industry with surplus ethanol capacity originally intended for vehicle use a decade ago, our project benefits from existing infrastructure and accelerates implementation.

What arbitrage advantages do you see in SAF production?

There are significant economies of scale in operating large SAF plants, and we're focused on scaling up. Our initial AtJ plant utilizes current ethanol supply, but we're poised to unlock more potential. Scaling up reduces SAF production costs substantially, making it highly competitive compared to benchmark prices in Singapore, if not lower.

Notably, we prioritize transparency in feedstock sourcing in Australia, emphasizing life cycle benefits from agricultural byproducts used in SAF production. This ensures high-quality SAF with a low carbon intensity CI score and transparency in product origin and sourcing.

How do you propose bridging the current price gap between SAF and conventional jet fuel, especially in Australia and Asia?

First of all, "I'll say as a statement, I don't think that SAF should ever be at the same price as conventional jet fuel. It's a better fuel, right. it offers superior energy density, providing better mileage with little to zero aromatic content and minimal sulfur -- a clear advantage. So I'm categorically going to say, I don't think it ever will be the same price. But we know that the market is between three and five times more expensive than traditional jet fuel.

Our feasibility work with Project Ulysses aligns its pricing with international benchmarks, demonstrating viability. To drive long-term affordability, scaling up production is crucial, despite high initial construction costs. And we think that will start to narrow the gap.

I also might add who's driving the demand of this. Corporate customers, such as large mining and financial institutions in Australia, are pivotal. They have very aggressive and responsible net-zero targets, Scope 3 emissions. And they're the ones that are saying, we want this product and buy this product. They recognize the premium for SAF as part of their sustainability commitments, ensuring the industry's development while protecting consumer interests from price impacts.

Another project, Mandala, focuses on low carbon intensity feedstocks. How does Jet Zero's sourcing of waste oil or non-edible crops for HEFA production fit into this strategy?

Mandala aims to diversify Australia's HEFA feedstock beyond canola and tallow. Partnering with groups focusing on lipid-based agricultural byproducts, we see significant opportunities to scale up and meet Australia's medium- to long-term feedstock needs.

Trials with identified preferred feedstocks, set to commence in the fourth quarter of this year, underscore our commitment. Leveraging Australia's vast arid landmass and robust infrastructure, this initiative promises efficient product transport to global markets.

How does Jet Zero's book-and-claim method, in conjunction with its partnership with Trovio and the Ulysses as well as Mandala project, complement each other amid expanding markets, mandates and the race to net zero?

Our engagement with government underscores a shift toward an industry-specific registry, distinct from prevailing global book-and-claim systems in the SAF sector. Aligning with the Australian Clean Energy Regulator's preference, our projects aim to integrate green hydrogen and other renewables certified by regulatory guarantees of origin. Collaborating with Trovio, renowned for their expertise in registering hydrogen and renewable fuels, we seek to establish an independent SAF registry.

Our life cycle assessments on feedstock illustrate transparency from farm to wing, utilizing agricultural byproducts as effective carbon sequestration methods at the farm stage. This approach not only benefits the environment but also leverages government credits to incentivize farmers, impacting the entire life cycle process beyond technology.

Apart from the financial aspect, how does Jet Zero's partnerships with Idemitsu, Qantas and Airbus support the SAF supply chain integration and your project ambitions?

Idemitsu's Tokyo ATJ project, comparable in scale to ours, offers insights into construction and contracting strategies. Qantas communicates their and their customers' SAF needs while linking us with corporate clients requiring specific SAF solutions. Airbus advises on optimizing carbon reduction aligned with evolving policies.

Regular consultations with Qantas and Airbus foster collaboration, highlighting our collective commitment to advancing the sustainable SAF industry in our region. We see these alliances are collaborative ventures, driving progress rather than competition in this challenging endeavor.

Also in this series:

Insight Conversation: Alexander Kueper, Neste

Insight Conversation: Pinaki Mukherjee, Zuari Envien Bioenergy