Securing Socio-economic Growth in Asia-Pacific
Hélène Burger
Head of International Cooperation & Sustainability APAC
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Airbus
Home to 60% of the world’s population, the Asia-Pacific (APAC) region is currently experiencing the fastest passenger traffic growth in the world, with one projection from the International Air Transport Association predicting a compound annual growth rate (CAGR) of 5.1% through 2043.[1] But this is no new trend. The rise of the middle class in APAC countries over the last half century has introduced hundreds of millions of people to flying for the first time, resulting in a democratisation of aviation that has unlocked unprecedented opportunities for business and tourism.
But APAC also has another distinction that underlines the importance of aviation to this region. The APAC office of the International Civil Aviation Organization counts 39 contracting states, of which 23 are island nations. The region is home to some of the world’s largest islands by land mass, as well as some of the smallest. For many people living on these islands, aviation is the only way to travel internationally, and it provides a vital economic lifeline.
Islands are also particularly threatened by climate change due to rising sea levels. For these reasons, decarbonising aviation to protect these links is thus an immediate imperative. We must ensure that its benefits – primarily connecting people, families, economies and cultures – are preserved for generations to come. To meet the rising demand for flight in the APAC region, all stakeholders must commit to investing in the growth of existing SAF production, developing local production and supporting government SAF mandates.
Accelerating existing production
Asia-Pacific is forecast to produce 40% of the world’s SAF by 2050.[2] Countries like Indonesia, Malaysia and Thailand have taken advantage of their abundant agricultural biomass resources to create expanding biofuel industries. But future demand still outstrips current supply plans. The resources and preliminary infrastructure are there, but the challenge lies in building more infrastructure and developing the supply chain to collect and process resources efficiently. This is thus a key investment opportunity for growing the industry. Indeed, in Indonesia, Airbus signed a memorandum of understanding (MoU) with Pertamina to study Indonesia's domestic SAF feedstock potential, optimise supply chains and assess the economic feasibility of a local SAF industry. And in Thailand, we signed an MoU with C.P. Group to explore the production of SAF using various feedstock sources such as agriculture and farm waste.
Developing local production
Then there are the countries who have the resources but lack infrastructure. For example, China is the world’s largest exporter of used cooking oils,[3] and Australia exports millions of tonnes of feedstock every year. Both countries have the potential to be SAF-producing superpowers, but significant investment is needed to develop the infrastructure necessary to process these resources at home.
To support this development, Airbus signed an MOU with CNAF in China to help develop their SAF ecosystem, mainly by intensifying Chinese-European cooperation on the production, competitive application and common standards formulation for SAF. Meanwhile in Australia, we partnered with Qantas in 2022 to invest up to US$200 million to develop the local SAF industry. We built on this promise in 2023, partnering with Qantas and the Queensland Government to invest in an alcohol-to-jet biofuel production facility being developed by Jet Zero Australia and LanzaJet. This plant is targeting an annual production of 102 million litres of SAF.
Supporting both supply and demand
Clear direction and investment by governments is also necessary, with stable and consistent policies at local, national and regional levels being crucial to supporting the growth of the SAF industry in APAC. The governments of India, Indonesia, Japan, Singapore and South Korea have all declared SAF targets or mandates that will take effect between now and 2030.
Airlines are also key partners to have at the table, with the Association of Asia Pacific Airlines publishing a target of 5% SAF usage by 2030. Japan is a great example of how governments can stimulate SAF industry growth by combining mandates with secured funding. After setting a 10% SAF target by 2030 for international flights departing from Japanese airports, the country earmarked US$2.3 billion in subsidies for SAF projects to help reach their goal. This includes a production tax credit of ¥30 (approximately US$0.20) per litre of SAF produced and sold. Encouraged by the Japanese government’s clear policies, and recognising the need to develop a resilient SAF supply chain in the country, Airbus and Japan Airlines signed an MoU in 2025 with the MORISORA Project, which aims to produce bioethanol using domestic wood, which would then transformed into SAF. Airbus is also a member of ACT FOR SKY, an organisation dedicated to commercialising, promoting and expanding the use of locally produced SAF in Japan.
Building a resilient future for the APAC region
The goal of decarbonising aviation is to ensure that freedom of movement is preserved for future generations. And there is a lot of mobility on the horizon for APAC: at Airbus, we predict that 46% of the demand for new aircraft between now and 2044 will come from this region. SAF is thus more than a decarbonisation solution: it is also vital to ensuring continued equity, social progress and economic growth in Asia-Pacific.
The industry must tackle challenges like feedstock availability and production scalability. Stable and consistent policy for both demand and supply at local and global levels is also needed to reassure investors and foster development. Airbus strives to be an enabler of this transition, supporting APAC government SAF ambitions with key investments, and demonstrating how non-producers can help derisk SAF projects and accelerate project progress to reach production commercialisation.
All industry stakeholders are needed to achieve this goal: government, investors, producers and airlines. By working together, we can ensure that SAF becomes a globally accessible and affordable reality, securing a connected and prosperous future for the Asia-Pacific region.