BERLIN (Reuters) -Chancellor Olaf Scholz on Monday set out Germany's ambitions to become a strategic production centre for sustainable jet fuel and to lure future investment to build on its importance as one of Airbus' main planemaking centres.
Earlier this month, the European Parliament adopted a deal to set binding targets for airlines in Europe to increase their use of sustainable aviation fuels, or SAFs, which have net zero or lower CO2 emissions than the fossil fuel kerosene.
On Monday, German energy firm HH2E announced a joint venture with logistics giant DHL and South Africa's Sasol to explore hydrogen-powered SAF production in Germany. Airbus is considering joining the consortium to use the fuel, HH2E said.
Scholz told delegates at the National Aviation Conference in Hamburg on Monday the EU targets would be challenging for companies and that it was crucial they did not distort competition in the event other non-EU countries have less rigorous targets.
"We have committed ourselves in Germany to the market ramp-up of these fuels," he said.
Referring to the risk of high-emission industries leaving Europe for less regulated regions, he also said Germany was advocating for rules to detect carbon leakage at an early stage.
Industry leaders such as Lufthansa CEO Carsten Spohr, have said reaching the EU targets is not possible on the basis of current SAF production, which is a small fraction of airlines' fuel.
Scholz also said Germany was targeting investment for a potential new plane to replace the Airbus single-aisle A320.
"We would like to see further investment in aviation - not just in Hamburg, but throughout Germany, as part of the successor to the Airbus A320," he said.
Hamburg is home to the company's best-selling A320 family as part of a historic worksharing agreement with France, where the Franco-German-led planemaker has its headquarters. The two countries have quarrelled in the past over industrial share.
In July, Airbus expanded production of the same series in Toulouse, France, to meet rising demand.
Scholz's remarks underscore Germany's objective to maintain a key role and access to high-tech jobs when the new generation of jets is introduced around the middle of next decade.
Airbus is a symbol of "European integration in advanced technology," he added.
An Airbus spokesperson said the group welcomed Scholz's support for "aviation and its decarbonisation trajectory, both in terms of funding but also regulatory support".