Reaching net-zero emissions comes with a price and for the aviation industry, that sum has been estimated to be more than €800bn.
1. Expensive climate pledges
Being a high polluter and carbon emitter, the aviation industry has committed to slash emissions, even to become carbon-neutral by 2050, through a mix of new technologies, notably alternative fuels, sustainable aviation fuels (SAF), as well as carbon offsets and more efficient aircraft and engines. However, the industry’s climate pledges come with a tag price. According to a report commissioned by airline industry bodies, including Airlines for Europe (A4E) and ACI Europe, reaching net zero would need “considerable additional efforts compared to business as usual” and would cost €820bn over a 32-year period from 2018 to 2050.
2. SAF
The biggest expense would be €441bn to invest on cleaner fuels, which are not made from fossil fuels but from feedstocks such as animal fat, cooking oil or household waste, the report said. The so-called SAFs can reduce the total emissions from a flight by about 70%, but are more expensive than traditional jet fuel and are only produced in extremely limited quantities.
3. Financing the climate transition
The report, conducted by research groups SEO Amsterdam Economics and Royal Netherlands Aerospace Centre, and seen by the Financial Times, suggests that aviation companies including airlines and airports would be unable to fund the climate transition alone, citing inconsistent profits in the past.
“Since [profits] are historically low due to high levels of competition and compounded by recent crises, the absorption capacity by the sector, in particular that of European airlines and hubs is expected to be low,” reads the report.
While Europe is surfing the “Green Deal” agenda, the aviation industry managed to get significant support from European policymakers, including classifying newer and more efficient aircraft powered by conventional jet fuel as a green investment under EU rules for sustainable finance, to help attract private capital.
“The report illustrates that Europe will need a stable and predictable investment environment and a consistent policy framework to ensure that European aviation can access the necessary capital,” said lobby group A4E.
A separate analysis from the rating agency S&P Global states that
environmental regulations, including EU taxes on carbon emissions, could “incentivise innovation”, but conceded that that investment in low-carbon and no-carbon power sources “is costly and thus risky, especially given the long investment lead times”.
4. Greenwashing
Environmental experts reacted to the report saying this would amount to “a huge act of greenwashing” as it would effectively classify highly polluting planes as sustainable.
“These aircraft do reduce emissions — albeit only slightly — but cannot be rubber stamped as sustainable in the taxonomy,” said Jo Dardenne, aviation director at the campaign group Transport & Environment. “The taxonomy should channel investments into true green aviation — that is, clean fuels and zero-emission aircraft,” she added.
Recently, Greenpeace denounced greenwashing practices by several European airlines, claiming that there is no substance to the claims the sector is making regarding how it intends to curb carbon emissions.
