Investment in scaling up global production of renewable fuels in the pursuit of the aviation industry’s Net Zero emissions target was at the forefront of discussions at this year’s Aviation Carbon conference in London. With Europe introducing from January sustainable aviation fuel (SAF) blending mandates, as well as monitoring requirements on aircraft non-CO2 impacts, industry concerns were raised over the complexity and cost of new regulations facing airlines. IATA’s SVP Sustainability and Chief Economist, Marie Owens Thomsen, criticised fossil fuel subsidies and the lack of investment by oil majors in the energy transition. Outcomes from the recent COP29, which have positive implications for ICAO’s CORSIA carbon scheme, and raising finance for SAF development, were central to a speech by the UN agency’s Secretary General, Juan Carlos Salazar.

As noted by Abdul Wahab Teffaha, Secretary General of the Arab Air Carriers Association during Aviation Carbon’s opening panel, one of the bugbears of airline associations is the prospect of a proliferation of regional mandates and schemes on the use of SAF by airlines. For example, he pointed to the EU’s and the UK’s SAF blending mandates that come into force from January 2025. The resulting “patchwork” would lead to an increase in costs and complexity for airlines, argued Teffaha.

Speaking to GreenAir after his speech, Salazar said that ICAO respects the sovereignty of any region if they chose to create their own schemes and regulations but stressed that the clear mandate given to ICAO was to address aviation’s carbon emissions at a global level and this resulted in CORSIA. “It is the only way for the international community to address CO2 emissions,” he noted.

For Salazar, the work being done by ICAO on aviation emissions is “a very solid basis to achieve our goal of net zero emissions by 2050…it is the way forward,” he said. “ICAO is steadily implementing CORSIA, and we are now moving from the voluntary to the mandatory phase. We are confident that the international community will continue its steady work on CORSIA and emission reduction policies as we create a very solid framework for the further advancement of the LTAG.”

As Salazar reminded delegates: “The landmark adoption of a long-term global aspirational goal (LTAG) of net-zero carbon emissions by 2050 during the 41st Session of the ICAO Assembly in 2022 settled an ambitious target for our industry. This goal recognises the urgent need to address climate change while acknowledging the vital role of aviation in global development.”

In addition, he added: “The success of the Third ICAO Conference on Aviation and Alternative Fuels held last year in Dubai, the CAAF/3, with its adoption of a Global Framework for SAF, Lower Carbon Aviation Fuels (LCAF),and Cleaner Energies, marked another significant step forward, setting out four key building blocks: Policy and planning; Regulatory framework; Implementation support; and Financing.

“The global target to achieve a 5% CO2 emissions reduction by 2030 through the use of SAF, LCAF and cleaner energies is also an ambitious, but achievable target with concerted effort. And the recently approved roadmap by the ICAO Council will guide our implementation activities, starting with the allocation of financial and human resources,” noted Salazar.

Obtaining the huge sums needed to develop a SAF industry was a constant theme during Aviation Carbon. According to Salazar: “Financing will be paramount for achieving our collective goals for a net zero future, this was the central focus of the discussions at COP29 last week.” This year’s UN climate change conference, COP29, took place the week prior to Aviation Carbon in Baku, Azerbaijan.

“The clean energy transition will require substantial financing. I am pleased to share that the ICAO Finvest Hub is well under development and our ambition is that it will be a crucial platform to facilitate investment partnerships, particularly for countries and regions that do not yet have SAF production capabilities,” explained Salazar.

“Our steady progress with the Finvest Hub is evidenced by our recent agreement with the International Renewable Energy Agency (IRENA). This co-operation, signed at the G20 Energy Ministerial meetings in Brazil last month, will significantly boost financing opportunities for sustainable aviation fuels and other cleaner aviation energy projects.

“The ICAO Finvest Hub will connect aviation decarbonisation projects with potential public and private investors, and beyond this matchmaking function, its value will lie in the collaboration between ICAO and financial institutions to fund projects,” said Salazar.

“The Finvest Hub is also an integral part of ICAO’s capacity-building and implementation support activities. More than 200 States and organisations are now part of ICAO’s Assistance, Capacity Building, and Training programme for SAF, known as ACT-SAF. This initiative provides crucial support for SAF development and deployment, offering training, feasibility studies, business implementation reports, support for SAF certification and policy development, and implementation of specific SAF projects for States,” Salazar told delegates.

“As we speak, more than 20 SAF feasibility studies and business implementation reports are under development. ICAO has a pivotal role in providing a harmonised, independent and robust regulatory framework for the environmental certification of cleaner aviation energies.

“I am pleased to inform you that currently 48 feedstocks are recognised under CORSIA. As States prepare their national policies for the aviation clean energy transition, adhering to this framework will ensure a level playing field for considering the environmental benefits of such fuels.

“Additionally, CORSIA continues as a crucial element in our basket of measures to reduce aviation’s carbon footprint.,” said Salazar. “Since 2019, all 193 ICAO member states are implementing the scheme’s monitoring, reporting and verification system. In addition, I’m delighted to acknowledge that 129 member states have confirmed their voluntary participation in the scheme subject to offsetting requirements in 2025, and we want more states to participate in future years.

“At its last session, the ICAO Council approved four additional programmes as eligible for CORSIA, ensuring that sufficient emissions units could be available for use in the scheme’s first phase,” said Salazar. The buying and selling of eligible emissions units through the carbon market is a crucial part of the functioning of CORSIA, but their availability has been limited up until now.

On this topic Salazar added: “The recent adoption of Article 6 of the Paris agreement at COP29 provides additional clarity in the way CORSIA eligible units can be authorised and cancelled, ensuring no double counting and stability for the voluntary carbon markets.”

Little control over fuel costs

IATA’s Marie Owens Thomsen, offering the airline perspective at Aviation Carbon, mused that as “complete price-takers” to the fuel suppliers, airlines have little control over what represents some 30% of their total costs. “The fantasy I harbour is that airlines can progressively take control over our own destiny and in-source more of their fuel supply,” she said. Her point was partly intellectual, but investing in jet fuel production is something various carriers are believed to be interested in.

She also noted that because aviation only takes 8% of global refined fossil fuel capacity, “the oil companies don’t need us for their profit optimisation.”

The health of the global economy, despite geo-political turmoil in the Middle East and war in Ukraine, is “strikingly stable”. With growth of 3.2% over the past two years and similar forecast into 2025 the economic backdrop is “super healthy”. This economic growth has seen oil prices dropping. “Anything under $80 a barrel is supportive of the global economy,” she noted.

However, Owens Thomsen questioned if today’s relatively low oil prices disincentivise investment in the move to renewable energy. They discourage the oil majors, she said, which have seen their stock prices rise on the back of lower oil prices, from investing in the energy transition. At the same time, lower oil prices have seen the stock prices of renewable energy industries “tank”.

“COP29 showed that the energy transition is a global problem. People need to understand that aviation is not a beast to be singled out,” she stated. “The real task is to switch from fossil fuels to renewable energies and we need to make money flow to the renewable energy industry. Imagine a world with ample energy supply that is cheap and renewable.”

One of the frequent questions at the two-day conference was whether the fossil fuel industry is investing enough in the energy transition. The answer was often it is not, mainly because it is not in its interests today to do so.

Owens Thomsen pointed to one of the impediments she believes is holding things back: the multi-billion-dollar subsidies given to the fossil fuel industry. “One of the discussions I struggle most to have is a conversation on fossil fuel subsidies,” she said.

This year’s Aviation Carbon 2024, co-organised by GreenAir, attracted a record 450 delegates from around 70 countries.

Photo (Shai Dolev): ICAO Secretary General Juan Carlos Salazar delivers the closing speech at Aviation Carbon 2024

Mark Pilling

Contributing Editor

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Aviation technology group SITA has expanded a partnership with the Arab Air Carriers Organization (AACO) to develop a planning tool which helps airlines reduce aircraft fuel consumption, emissions and operating costs, and more easily comply with complex and increasing environmental regulations. SITA Eco Mission was developed over a year through collaboration with AACO and three of its member airlines to streamline collection and assessment of information which carriers need to report as part of their environmental compliance obligations. Abdul Wahab Teffaha, AACO’s Secretary General, said the product had grown from a need for airlines to manage increasingly complex sustainability requirements, while also providing transparency to both regulators and customers.

“This is a step in the right direction in the journey of airlines’ quest to deliver on their environmental sustainability objectives,” he said.

Added SITA CEO David Lavorel: “As we face unprecedented environmental challenges, achieving sustainability in aviation demands more than compliance. It calls for a visionary approach.”   

The extended collaboration between Geneva-based SITA and AACO, which represents 37 airlines, began late last year when the two signed a Memorandum of Understanding to jointly develop a prototype of a data-driven system enabling carriers to simplify and automate reporting processes to meet their environmental compliance obligations.

The new system was also required to help cut the costs of meeting sustainability requirements, while enabling airlines to plan more efficient operations with lower emissions.

The resulting product, SITA Eco Mission, is a ground-based platform that collects data including flight schedules and fuel information from airlines’ internal systems and other information such as commodity prices and regulatory updates from a wide range of external sources.

The information is then consolidated, assessed and optimised by SITA, and delivered as data-backed insights to the relevant key departments of customer carriers to assist them in meeting their efficiency, financial and sustainability targets.

“The aviation industry remains at a critical crossroads as it works to reduce its carbon footprint and meet global sustainability targets, all while navigating increasing regulatory pressure,” said SITA.

“As the aviation industry adapts to increasingly complex regulations such as the European Union’s ReFuelEU Aviation mandate and ICAO’s CORSIA, airlines must balance emissions reduction with cost management.

“The continued partnership between SITA and AACO is focused on delivering the data-driven solution needed to simplify and automate compliance and reporting, streamline data collection and analysis, reduce the costs associated with becoming more environmentally friendly and help airlines plan their future operations so that they can meet their cost and emission targets.

“More so, the solution will support airlines in moving beyond a tactical, reactive approach, helping with smarter strategic environmental management across three key airline functions – Compliance; Strategy and Finance; and Flight Operations.”

During the past year, SITA collaborated with three AACO member airlines, which it did not identify, working with members of these functions to jointly chart what was required to navigate complicated regulations governing sustainable operations.

SITA then took the airlines’ feedback and worked with a technology user experience team to develop proof of concept for the Eco Mission product, which was taken back to the airlines for feedback and further refinement over several months.

The new planning tool has now been formally launched, and SITA expects global deployment from next year, when the EU will require all jet fuel provided at its airports to include at least a 2% blend of sustainable aviation fuel.

AACO’s Teffaha said the work performed by SITA and his member airlines had delivered a solution “invaluable not only to AACO airlines but also to the airlines of the world. This is a step in the right direction in the journey of airlines’ quest to deliver on their environmental sustainability objectives.”

Added Lavorel: “Together with AACO, we are advancing a solution that tackles these challenges directly, paving the way for a fresh, practical approach to environmental responsibility that moves the industry closer to its goals.”

Meanwhile, key AACO member Qatar Airways has strengthened its sustainability partnership with Brisbane-based Virgin Australia, a commercial ally of which it has announced plans to acquire a 25% stake, subject to regulatory approval.

The airlines have signed a MoU to expand their partnership, enabling them to collaborate on advancing sustainable aviation fuel and low carbon aviation fuel in Australia through measures including exploring certification, production and commercial use of the products.

“This MoU not only further strengthens the strategic partnership between Qatar Airways Group and Virgin Australia, but also cements the shared commitment towards achieving our common objectives in the area of sustainability,” said Qatar’s SVP Aeropolitical and Corporate Affairs, Fathi Atti.

Editor’s note: AACO Secretary General Abdul Wahab Teffaha and Igor Dimnik, VP Product, SITA will be speaking at Aviation Carbon 2024 in London on November 25/26.

Photo: Qatar Airways has expanded its sustainability partnership with Virgin Australia

Tony Harrington

Correspondent

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