• Air Canada and Airbus plan to invest up to $10 million, in a Canadian sustainable aviation fuel platform.
• The partners aim to move a domestic SAF project toward a final investment decision while pressing governments for supportive production policies.
• Canadian SAF production meeting 40% of national aviation fuel demand by 2040 could add $32 billion to GDP and support 140,000 jobs.

Air Canada and Airbus plan to jointly invest up to $10 million, to accelerate commercial-scale sustainable aviation fuel production in Canada.

The companies intend to establish a Sustainability Co-Investment Platform focused on advancing a Canadian SAF project toward a final investment decision. The initiative will also seek to build demand for lower-carbon aviation fuel through corporate travel programmes.

However, both groups made clear that private capital alone will not create a competitive domestic market. They are calling for federal and provincial policies that can reduce production costs, support investment and improve price competitiveness.

“Air Canada is proud to help advance aviation’s energy transition in Canada. Through this joint initiative with Airbus, we are taking meaningful steps toward supporting domestic SAF production, helping corporate customers address the emissions associated with business travel, and contributing to a lower-carbon path for the industry. With continued industry collaboration and a supportive policy environment, we are confident this momentum can accelerate” said Valerie Durand, Vice President, Airport Affairs, Corporate Real Estate and Sustainability at Air Canada.

Policy support remains central

Canada has substantial agricultural, forestry and waste feedstock resources that could support renewable fuel production. Yet the country lacks the scale, incentives and long-term demand certainty available in some competing markets.

Air Canada and Airbus are working with the Canadian Council for Sustainable Aviation Fuels to advocate for stronger government support. Their priorities include production incentives, clear regulatory frameworks and measures that narrow the price gap between SAF and conventional jet fuel.

The companies argue that coordinated public policy could help preserve affordable air travel while creating a new domestic energy industry. It could also reduce Canada’s reliance on imported low-carbon fuels as airlines face growing pressure to cut emissions.

“I want to thank Air Canada for this very important joint sustainability initiative. Decarbonising aviation will require deep industry collaboration and decades of investment in new sources of renewable energy. By launching this co-investment platform and making a long-term commitment to Air Canada’s Leave Less Travel Programme, we will help to stimulate the production of, and demand for, SAF in Canada. The country has a vast feedstock potential. When combined with a supportive policy framework, it can contribute to the sector’s decarbonisation ambitions and create significant economic growth and job creation.” said Julie Kitcher, Airbus Chief Sustainability Officer and Communications.

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Corporate travel creates demand

Alongside the investment platform, Airbus has signed a five-year agreement under Air Canada’s Leave Less Travel Program.

For its first allocation, Airbus will purchase environmental attributes linked to more than 60,000 litres of SAF. Air Canada will track greenhouse gas emissions linked to Airbus employee travel and retire the verified SAF attributes on the company’s behalf.

The mechanism allows corporate customers to support SAF demand even when the physical fuel is not used on their specific flight. It can also help companies address business travel emissions within their value chains.

Such arrangements require careful accounting. Environmental attributes must be verified and retired transparently to avoid double counting. They also do not replace direct operational emissions reductions.

Air Canada said SAF will complement its fleet modernisation programme. The airline is adding more efficient aircraft, including the Airbus A321XLR and the Canadian-built Airbus A220.

Canadian SAF carries economic potential

A study by Airbus and consultancy ICF estimates that domestic SAF meeting 40% of Canada’s aviation fuel demand by 2040 could add $32 billion to national GDP.

The industry could also support 140,000 jobs across agricultural, forestry, industrial and urban communities. That economic potential gives SAF policy relevance beyond airline decarbonisation.

SAF is produced from renewable or non-fossil feedstocks and is chemically similar to conventional jet fuel. Depending on the production pathway, it can reduce emissions across the fuel life cycle.

Air Canada and Airbus support the aviation industry’s ambition to achieve net-zero carbon emissions by 2050. SAF is expected to carry much of that burden because long-haul aviation remains difficult to electrify.

For executives and investors, the partnership highlights a wider challenge. Aviation decarbonisation needs coordinated capital, credible demand and durable policy. Canada has the resources to compete, but turning feedstock potential into commercial supply will depend on whether governments create an investable market.