Sustainable aviation fuels, constant community engagement and energy expansion: Three ASX Top 50 CEOs share their latest thinking on net zero

Australia doesn’t need to always be the first move mover in the sustainability transition, but we need to work together to stimulate both supply and demand, innovate, and manage cost pressures, the CEOs of Qantas, Commonwealth Bank and Origin Energy told Commonwealth Bank’s Momentum conference in Sydney.

Qantas’ Vanessa Hudson, CBA CEO Matt Comyn and Origin chief executive Frank Calabria said it was important that business and government collaborated to create demand signals that would encourage markets to bring more sustainable options to customers. 

“You need both supply and demand signals,” Qantas CEO Hudson said. 

Fuelling more sustainable industries

There were major opportunities on offer for the nation in areas like sustainable aviation fuels, Hudson said. Commercial flights powered by anything other than liquid fuels were unlikely within our lifetimes, making alternative fuels vital in making flying sustainable.

“It takes a coalition of people and organisations to get that going,” she said. “The opportunity that we see is Australia has some of the largest sources of the feedstock for sustainable aviation in the world.”

That feedstock was currently being exported to Asia and then brough back to Australia as fuel, she said. “So this is an opportunity for us to potentially take a lead.”

Qantas was working with Queensland group Jet Zero to convert sugarcane waste to ethanol that could then be used to make sustainable aviation fuel, or SAF, she said. It was also working with partners like Ampol to convert old fossil fuel infrastructure to support sustainable fuels. 

“Aviation is an incredibly hard to abate industry, but that doesn't’ stop us being ambitious”.

Costs key for customers

Origin CEO Calabria said with substantial new infrastructure build required to support the transition, investing signals needed to be strong. The infrastructure build-out had the potential to be a game changer for national productivity, Calabria said, creating thousands of jobs. 

Calabria said he preferred the term “energy expansion” to “energy transition” Rooftop solar had offset most new demand over the last decade, but data centres, EVs, and home electrification were changing the picture again, he said. 

Managing energy was “no longer just buy commodity and manage risk”, he said. For example, there was now an enormous amount of “behind the meter” generation and storage happening on customer premises, he said. 

While regulator focus was switching to security of supply, customers had costs at front of mind, he said. Attitudes to the transition also varied widely across the country “Regional people are feeling left behind,” he said.

CBA CEO Comyn echoed that sentiment, saying a conversation with customers in regional Queensland could be quite different to one with customers in metropolitan Melbourne when it came to sustainability. 

CBA customers were also concerned with costs, Comyn said. “Cost pressures are coming through very strongly, much more than four or five years ago.”

Working together

Not everyone has the resources of big businesses to answer energy transition challenges, and businesses would need support Comyn said, saying CBA had provided $64.4bn in funding to businesses to help support sustainability initiatives since 2020. 

But the CEOs agreed that the journey to sustainability carried challenges and costs. 

“If Australia can get this right it puts us in a very strong position, but it’s challenging,” Comyn said. “We have to be engaging in the community and talking about the hard things.” 

CBA’s role was to support and educate customers as well as finance them, he said. The bank is bringing a new electricity hedging product to market to help ease pressures in areas like pricing and reliability, Comyn said. 

Fast follower

While all three CEOs agreed the sustainability transition was an economic opportunity for Australia, Hudson said we didn’t always need to be at the bleeding edge of that transition to be well positioned.

“Being a fast follower is a positive thing for Australia” she said, saying it provided the opportunity to look at what’s being done in other countries and make more informed decisions about our own path.

Qantas currently gets 70 per cent of its sustainable aviation fuel - which can cost up to three times as much as conventional fuel - from the US and particularly California, where demand was being encouraged and prices were starting to become comparable to fossil-based fuels, she said.

In contrast, Europe was leaning more towards a penalty-based system that discourages fossil fuel usage. Hudson said she found the US approach more appealing, but there were lessons Australia could learn from both sides of the Atlantic to encourage groups like Jet Zero to boost our own sustainability and security of supply.