Canadian airlines are calling on the federal government to roll out measures that will spark production of sustainable aviation fuel (SAF) in Canada and catch up to programs south of the border, thus enabling them to cut down on pollution that accounts for about two percent of carbon dioxide emissions globally, according to the International Energy Agency.

The Canadian Council for Sustainable Aviation Fuels and the National Airlines Council of Canada say the country’s long history of resource development, renewable energy and aircraft manufacturing should put it at the forefront of the push for greener skies.

However, Canada has yet to commercially produce a drop of sustainable jet fuel. 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 (3.8 litres) 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 $350 million to support decarbonization of the aerospace sector, establishing a national network that backs research and development projects ranging from alternative fuels to aircraft design.

But the blueprint offered none of the manufacturing carrots that carriers were demanding, Morrison said.

“Research into green technologies and SAF production incentives need to go hand in hand,” he said.

The two groups are also asking for a “book-and-claim system,” whereby producers enter or “book” the fuel they’ve distilled and customers “claim” the product they’ve bought, receiving a certificate to be used in corporate emissions reporting and for tax purposes.

The aviation industry has set a goal of net-zero emissions by 2050 through bodies such as IATA and the International Civil Aviation Organization, a United Nations agency.

“If we’re serious about meeting a decarbonization, net-zero objective, roughly two-thirds of the activity needed to get there is going to come from SAF,” Morrison said.

Other steps, such as electric batteries for short-haul flights and green hydrogen – gas produced using renewable energy – could pick up the rest of the emissions slack in air travel, though widespread use of either power source remains farther on the horizon.

Part of the slow pace of SAF supply relative to demand comes down to money. The green alternative costs at least four times more to churn out than the petroleum-derived kind.

Big players such as Air Canada are on board with the push toward greater fuel efficiency, buying a raft of new cost-saving planes such as the Boeing 787 Dreamliner and 737 Max and the Airbus A220.

In April, it announced the purchase of 9.5 million litres of SAF from Finland-based oil refiner Neste. But the amount totalled less than 0.2 per cent of the 5.71 billion litres of fuel Air Canada consumed in 2019.

“Canadians are travellers,” Morrison said. “This is the primary, most effective way to decarbonize air travel in Canada and around the world.

“People care about that,” he continued. “They want to know that when they’re travelling, they’re not contributing to global climate change.”