Pledge review for COP27: Aviation still not on path to reach net zero

Author Sarah Raffoul and Beatrice O'Kelly

Increasing costs have pushed climate goals further down the list of priorities for airlines and airports, and a global alliance to reach net zero emissions in the aviation industry is looking to expand its membership and find more investment.

The International Aviation Climate Ambition Coalition (IACAC), launched at the UN Cop 26 climate conference last year, has 34 members, including six out of the 10 largest passenger aviation markets as of 2019 — with China, India, Russia and Brazil still sitting on the sidelines. But even though Brazil has not joined the group, the country's airlines, fuel distributors and biofuel producers are preparing to comply with Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) regulations, while the government finalises the legal framework for the use of sustainable aviation fuel (SAF).

The IACAC coalition pledged to support the UN International Civil Aviation Organisation (ICAO) in its efforts to reduce GHG emissions by promoting the production and uplift of SAF, and the Corsia framework.

But most IACAC signatory countries have yet to finalise legally binding policies specific to the aviation sector, while others, such as Morocco and Kenya, do not have a net zero by 2050 target.

The US and the UK have committed to reach net zero emissions by 2050 from all greenhouse gas (GHG) emissions and in all sectors, including aviation. The US issued a SAF Grand Challenge and the UK plans to mandate SAF supply in the country by 2025.

The ICAO on 25 July urged its members to co-operate in development of a long-term aspirational goal to ensure that the industry keeps on track to reach the 2050 Paris climate ambitions. And the organisation is asking IACAC members to submit plans ahead of the ICAO's 41st conference in September, which is expected to formalise the long-term emissions goal. "Knowing that government policies will support the same goal and timeline globally will enable the sector, especially its suppliers, to make the needed investments to decarbonise," the International Air Transport Association says.

Prepare to take off

Aside from policies, investment and SAF supply are major challenges for the industry. "Average annual investments between 2022 and 2050 to get global aviation to net zero are estimated at about $175bn, about 95pc of which would be required for fuel production and upstream assets, consultancy McKinsey says.

The global airline industry will be hard pressed to obtain the funds — it made huge losses during the Covid-19 pandemic and rising jet fuel costs are further cutting into profits. In northwest Europe, jet fuel prices have risen 77pc on the year in August so far, to average $1,061/t. SAF prices have also risen in an additional cost burden deterrent for airlines, averaging around $3,438/t so far in August on a fob ARA outright basis. This is in part because the SAF market is tighter, as demand vastly outstrips supply. An increase in SAF production is likely by 2025, when around 12.3mn t will be available globally, based on publicly announced projects.

The vast majority of SAF supply currently comprises hydro-processed esters and fatty acids synthetic paraffinic kerosene, the most mature SAF production pathway with a maximum blend volume of 50pc, but feedstocks are limited and the aviation industry will need to look at other alternatives. Participants in the Sustainable Aviation Futures Congress conference in Amsterdam earlier this year said that more investment is needed in synthetic SAF and other pathways for the industry to meet net zero goals.

Looking forward, "consistent international policy framework is essential to drive the necessary investments for the sustainable energy sources that we need", industry group ACI World director general Luis Felipe de Oliveira says. ICAO's promotion of Corsia and the formation of the IACAC could help develop this rigid framework and encourage investment, which should increase SAF supply.

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