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害羞草研究所檙e hoping Ottawa can match new programs in the United States and ultimately help cut airplane pollution, which accounts for about two per cent of global carbon dioxide emissions, according to the International Energy Agency.

The country害羞草研究所檚 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 productshaves off about 80 per cent of a plane害羞草研究所檚 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 per cent on manufacturing facilities, and a production tax credit with a 10-year horizon 害羞草研究所� 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.

害羞草研究所淐ompare that to Canada, which is nothing,害羞草研究所� said Jeff Morrison, who heads the national airlines council.

害羞草研究所淚f you害羞草研究所檙e an energy company and you害羞草研究所檙e looking at SAF as an opportunity and you害羞草研究所檙e looking, 害羞草研究所榃here do I go?害羞草研究所� 害羞草研究所� it害羞草研究所檚 kind of a no-brainer.害羞草研究所�

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.

害羞草研究所淩esearch into green technologies and SAF production incentives need to go hand in hand,害羞草研究所� he said.

The two groups are also asking for a 害羞草研究所渂ook-and-claim system,害羞草研究所� whereby producers enter or 害羞草研究所渂ook害羞草研究所� the fuel they害羞草研究所檝e distilled and customers 害羞草研究所渃laim害羞草研究所� the product they害羞草研究所檝e bought, receiving a certificate to be used in corporate emissions reporting and for tax purposes.

The government has set a goal of 10 per cent SAF use by 2030. The aviation industry is targeting net-zero emissions by 2050 through bodies such as the International Air Transport Association trade group and the International Civil Aviation Organization, a United Nations agency.

害羞草研究所淚f we害羞草研究所檙e serious about meeting a decarbonization, net-zero objective, roughly two-thirds of the activity needed to get there is going to come from SAF,害羞草研究所� Morrison said.

He said other steps, such as electric batteries for short-haul flights and green hydrogen 害羞草研究所� gas produced using renewable energy 害羞草研究所� could pick up the rest of the emissions slack in air travel, though widespread use of either power source remains farther on the horizon.

The advantage of sustainable aviation fuel is that it害羞草研究所檚 a 害羞草研究所渄rop-in害羞草研究所� power source. Engines and fuel pumps need little adjustment to handle a half-and-half blend of SAF and traditional jet fuel.

The world害羞草研究所檚 two main commercial jet makers, Airbus SE and Boeing Co., aim to be 100 per cent SAF-compatible by 2030.

Production rates for SAF have doubled every year for the past three years, amounting to about 600 million litres in 2023, according to the sustainable aviation council. They害羞草研究所檙e expected to triple this year. But even with the boost, the total will amount to just 0.5 per cent of global fuel demand.

Part of the slow pace of 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.

The prohibitive price of sustainable fuel 害羞草研究所� along with the rising urgency to deploy it amid stricter government rules and a heating planet 害羞草研究所� mean the aviation industry faces an 害羞草研究所渆xistential threat害羞草研究所� if it does not work to decarbonize quickly, said Deborah Flint, who heads the Greater Toronto Airports Authority.

害羞草研究所淚t害羞草研究所檚 pretty jarring,害羞草研究所� she told attendees at a panel on clean aerospace at the Canadian Club in Toronto in October.

害羞草研究所淭he threats of reducing the (aerospace) business or making the business too expensive are very real and imminent for us.害羞草研究所�

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.

A spokesperson for Transport Minister Pablo Rodriguez confirmed that members of his office will sit down with representatives from industry next week.

害羞草研究所淐anadians are travellers,害羞草研究所� Morrison said. 害羞草研究所淎nd this is the primary, most effective way to decarbonize air travel in Canada and around the world.

害羞草研究所淧eople care about that,害羞草研究所� he continued. 害羞草研究所淭hey want to know that when they害羞草研究所檙e travelling, they害羞草研究所檙e not contributing to global climate change.害羞草研究所�

Christopher Reynolds, The Canadian Press