Multimillion-dollar grants for projects to cut pollution from long-haul flights have been launched to help create an eco-friendly fuel industry in Australia.
Applications opened on Monday for the Australian Renewable Energy Agency's $30 million fund, first revealed as part of the federal government's Jet Zero initiative.
Companies will have until November 1 to apply for grants of at least $1 million.
The launch follows research by management consultant McKinsey that found sustainable aviation fuel could cut greenhouse gas emission from flights by up to 30 per cent and were the "only viable near-term option" to cutting aviation pollution.
The agency's chief executive Darren Miller said Australia's natural resources and strong agricultural industry delivered a unique opportunity to produce sustainable fuel and cut aviation pollution, which makes up one per cent of the nation's total carbon emissions.
Aviation biofuel is typically created using waste from forestry and agricultural industries, as well as used cooking oil.
"For a country so reliant on aviation for passenger and freight transport, it's essential that we find ways to reduce emissions from this critical sector," Mr Miller said.
"With abundant agriculture, waste and residue resources, Australia has the potential to support a thriving domestic biofuel industry."
The grants will be open to "commercial or pre-commercial" sustainable aviation fuel production projects, with the funding designed to support development, pilot projects or demonstrations.
Aviation biofuel is in high demand worldwide with airlines having committed to achieving net-zero emissions by 2050, and 65 per cent of emission cuts are expected to come from the use of sustainable fuel.
The McKinsey report found 25 to 30 per cent of the aviation industry's energy demand could come from biofuel by 2030, making it a better short-term solution than electric or hydrogen propulsion aircraft that would take longer to develop.
"(Sustainable aviation fuels) are the only viable near-term option to decrease emissions in the aviation sector as they are compatible with current aircraft engines and fuelling infrastructure and can power flights with no distance limits," the report found.
In May, Qantas revealed it had set aside $400 million to invest in sustainable aviation fuel projects and research, including a $290 million investment in a biofuel refinery to be established with Airbus in Queensland.
The airline has also committed to using 10 per cent sustainable aviation fuel in its planes to cut carbon emissions by 25 per cent in 2030.
Other initiatives to cut pollution from air transport in Australia include efforts by startup Dovetail Electric, backed by regional airline Rex, that plans to test hydrogen fuel-cell technology in a small plane in 2024.
