An audience of senior aviation professionals recently doubted the sector's ability to renew its licence to grow. At CAPA's Airlines in Transition (AIT) conference in Dublin on 11-Mar-2016, 88% of delegates polled believed that environmental pressures would constrain airline growth over the next 20 years. Although aviation is one of the only global sectors with ambitious emissions reduction targets, and a strategy to achieve them, its message is not being heard.
Aviation must communicate its importance to the global economy, so that governments and other stakeholders regard its growth as essential. Introducing the topic, Professor Geoffrey Lipman argued for a "moon-shot" to focus resources and attention on developing commercially viable biofuels, allowing a carbon-free future for aviation. This goes beyond the industry's current targets. He stressed the significance of climate change above almost any other global issue: "Climate is existential", he stated.
Following the 2015 Paris Agreement the world has stepped up all efforts to ensure its future existence. Aviation must play its part and also be seen to do so.
The presentation of Professor Lipman, founder of Strong Universal Network and former President of the World Travel & Tourism Council, to CAPA's AIT event can be viewed at this link. The subsequent panel discussion, moderated by Jonathan Wober of CAPA, with IATA's Tony Tyler, Mary Kerins of daa, Zhihang Chi of Air China, and Christian Haenan of GE, can be seen here.
Aviation's current carbon emissions targets
In 2009, at the instigation of IATA and under the auspices of ICAO, aviation established an ambitious set of targets to limit and reduce the industry's impact on climate change through carbon dioxide emissions (also referred to as CO₂ or carbon).
The three targets were: an average improvement in fuel efficiency of 1.5% pa from 2009 to 2020; a cap on net aviation CO₂ emissions from 2020 (carbon-neutral growth); and a 50% reduction in net aviation CO₂ emissions by 2015, relative to 2005 levels.
A four-pillar strategy to achieve the targets
In order to achieve these targets, IATA devised its so-called four-pillar strategy. This calls for four ways to control and reduce carbon emissions:
This includes propulsion technology, both in terms of engine design, developments in aerodynamics and sustainable fuels. These points are discussed further in this report.
Greater efficiency in the operation of aircraft can make a contribution to reduced fuel burn and emissions.
This includes infrastructure in the air (improved air traffic management systems) and on the ground (airport infrastructure improvements to reduce congestion). IATA estimates that infrastructure inefficiencies waste around 5% of fuel burn each year.
A global market-based (or economic) measure:
This means a single, globally agreed, economic mechanism that uses market structures to implement an overall emissions cap. This will be needed to fill the gap in emissions reduction left by the first three pillars. The three main types of measure are levies, emissions trading and carbon offset schemes. This is also discussed further in this report.
Aviation's CO₂emissions targets and the strategies to achieve them (schematic representation)
Aviation is not part of the UN Framework Convention on Climate Change
At a global level, action on climate change is generally coordinated through the United Nations Framework Convention on Climate Change (UNFCCC). This framework was established in 1992 and subsequently strengthened in 1995 by the Kyoto Protocol, binding developed countries to emissions reduction targets. There has also been a series of other agreements and amendments since then.
In Dec-2015 the Paris Agreement further developed the UN climate change regime. The main aim of the Paris Agreement is for this century to keep global temperature rise well below 2 degrees Celsius above pre-industrial levels. It also aims "to pursue efforts" to limit the temperature increase even further, to 1.5 degrees Celsius above.
Aviation currently represents around 2% to 3% of global carbon emissions, but its growth rate means that this is projected to rise to between 4% and 15% by 2050. Moreover, there is evidence to suggest that altitude increases the climate change impact of emissions and this could mean that aviation's contribution to global warming is twice its share of CO₂ emissions.
Nevertheless, aviation (and international shipping) are not included within the UNFCCC. This is because it is not easy to apportion aviation to a particular country since international flights begin in one nation, end in another and may traverse the airspace of several more.
By contrast, the other sectors (apart from international shipping) treated within the UNFCC can be divided up on a country-by-country basis and it is nation states that are signatories to, and responsible for the implementation of, the framework. Since there is also a UN regulatory body with oversight for aviation, ICAO, that sector's climate change impact is a matter for this organisation.
But the Paris Agreement raises the stakes for aviation too
Nevertheless, although aviation is one of the few global sectors to have set such ambitious emissions reduction targets under its own initiative, its exclusion from the UNFCC risks the perception that it has been let off the hook.
Moreover, the Paris Agreement has further raised the profile of climate change and has set the world on a more ambitious mitigation trajectory. Against this background, aviation not only needs to do more, but, importantly, it also needs to be seen to do more.
Technology: fuel efficiency is increasing ahead of the target
Improvements to aircraft technology, including engine design and wing modifications such as Airbus' sharklets and Boeing's winglets, have led to lower fuel burn for a given level of traffic. Improvements in fuel efficiency also mean a lower level of carbon emissions for a given level of traffic.
According to data presented by IATA in its Jun-2015 Industry Economic Performance update, fuel efficiency (measured by litres of jet fuel per revenue tonne kilometre) improved by an average of around 3% pa from 2009 to 2015 (a similar average rate to that achieved from 2001 to 2009).
The rate of improvement was slowing, but IATA's projection of a 1.7% gain in 2015 is just ahead of the 1.5% pa target to 2020. Its Dec-2015 update forecast a further gain in 2016 (1.8% in litres per available tonne kilometre, which implies a slightly bigger improvement in litres per RTK, if load factors continue to grow).
Fuel efficiency (litres per 100 RTK, right hand axis) and jet fuel price (USD per barrel, left hand axis)
In the areas of fuel burn and operational efficiency, airlines naturally also want to reduce what is one of their biggest cost categories. As Air China VP & GM North America Zhihang Chi said at AIT, "airline economics are perfectly lined up with the environmental interest". These interests may be less rigidly aligned in the current lower fuel price environment, but in the longer term they will continue to serve one another.
Based on current trends, the industry's target of a 1.5% pa gain in fuel efficiency from 2009 to 2020 looks to be achievable. However, even with efficiency improvements, growing traffic still means increased emissions (though at a lower rate than traffic growth). In the absence of any significant new breakthrough in propulsion technology, aviation can only achieve an absolute reduction in carbon emissions through alternative, renewable fuels.
Biofuels: sustainable in theory, but there are hurdles to their commercial viability
In aviation, the renewable fuel focus is on biofuels. These are alternatives to fossil fuels and are hydrocarbons produced by or from a living organism (or organic waste) over a time frame of between days and months.
Biofuels also release CO₂ when burnt to produce energy, but the key to their suitability as environmentally sustainable fuels is that the CO₂ released has only recently been taken from the atmosphere (for example by the plant that forms the biofuel).
By contrast, fossil fuels take millions of years to form and the CO₂ released by burning them would otherwise not have been released back into the atmosphere. Moreover, taking a very long-term view, the supply of fossil fuels is finite - they will run out one day.
However, when producing biofuels it is important also to consider the energy input necessary to producing crops and then converting them into fuel. This means that biofuel production may require more energy than the biofuel can produce. In addition, fertilisers necessary for plants produce nitrous oxide, which is another greenhouse gas. A further challenge associated with biofuel production is the conflict between the needs of efficiency, which would focus on a single crop type, and the need for biodiversity.
Even if these issues can be resolved, a key current constraint on the production of biofuels is the availability of land suitable for growing the biomass needed for their production, particularly given the competing need to grow food. The limited availability of biofuels tends to drive up their cost and this is also a factor in reducing demand for them.
Biofuels will be crucial to cutting carbon emissions
Aviation biofuels have been shown to work on both test flights and commercial flights, on their own or mixed with existing jet fuel. Nevertheless, greater government support and funding for biofuel development will be needed before their use can be commercially viable and sufficiently widespread to replace fossil fuels in aviation.
This will also need the involvement of other sectors, including agriculture, technology, fuel logistics suppliers, airports, investors, regulators and research organisations. Other renewable fuels have benefited from wider support and financial support, or at least investment incentives, from governments.
As Christian Haenan, European Government Affairs & Policy Leader for Aviation at GE's Global Growth Organisation, said at CAPA's Airlines in Transition event in Dublin on 11-Mar-2016, "if you work together as an industry and also with government, you can take steps much more quickly".
This is also an area that needs what Mary Kerins, Head of Health, Safety, Sustainability and Environment at daa, calls policy consistency on the part of governments. "On the one hand, we are trying to reduce emissions, but, on the other hand, we don't necessarily have the kind of incentives to encourage people to invest in the technology that will change the satus quo", Ms Kerins said at AIT.
Biofuels will be essential if aviation is to meet its target of cutting carbon emissions in half by 2050, relative to their 2005 level.
A global market-based measure vital for carbon-neutral growth
At the 2013 ICAO Assembly, member nations approved an IATA plan to develop a global market-based measure for international aviation aimed at reducing its climate change impact. In particular, in the context of the industry's targets outlined earlier in this report, this measure will be vital for achieving carbon-neutral growth from 2020.
The next ICAO Assembly, which typically meets every three years, is scheduled for 27-Sep-2016 to 7-Oct-2017 and will decide on what kind of measure to adopt.
The global aviation industry's preferred measure is a mandatory global offsetting scheme, under which emissions from aviation are offset by investing in carbon reduction projects elsewhere. In effect, this means airlines would buy carbon credits from other industries to offset the growth in their emissions. This relies on there being carbon emission reductions in other sectors that are more efficiently achieved than in aviation.
It requires a process of standardisation and independent validation to ensure that carbon emissions are properly balanced by the offsetting project. ICAO has developed standards in this area and IATA is one of four organisations that are qualified to check that programmes meet the standard.
The cost of the market-based measure will be borne by airlines and, presumably passed on to passengers in their ticket price, like a fuel surcharge or government tax. Current voluntary offset programmes that are offered by a number of airlines have met with only limited popularity, presumably as a result of the additional cost and low levels of publicity attached to them.
The additional cost of any future mandatory offset scheme may have a negative impact on demand, but the measure will only be needed to offset that part of the industry's growth that is not covered by improvements in the other three pillars.
Aviation is optimistic about achieving targets, but unity must be maintained
There is currently a fair degree of optimism in the aviation sector that its carbon emissions reduction targets are achievable and that the global offset programme will be adopted by ICAO.
If ICAO does not adopt this scheme, there is a risk of division within the industry and a proliferation of regional and country-based schemes aimed at hitting aviation's growth.
The development of the targets and the four-pillar strategy has broadly had the effect of uniting aviation behind mitigating its climate change impact. This unity must be maintained, both in order to achieve its goals and also to strengthen is message to the public about aviation's contribution to the economy and prosperity.
Aviation has a PR problem
As a sector, aviation seems to have a significant public relations challenge. Almost seven years after the industry set its targets to control carbon emissions, few people outside the industry appear to believe in their achievability.
While the world continues to take advantage of air travel in ever-growing numbers, nobody likes to admit their fondness for – and dependency on – the industry. At least in developed markets, aviation is everyone's guilty secret.
To correct this, not only does the aviation sector need to do a better job in highlighting its achievements so far, but also it must take a lead in steering the wider travel and tourism sector towards a carbon-free future.
Panellists addressing climate change issues at AIT conceded that aviation needs to work harder on its public image. IATA Director General & CEO Tony Tyler said this failure was not from a lack of trying, although "as with other issues facing aviation, we spend too much time talking to ourselves about it".
Christian Haenan of GE said at AIT, "One of our weaknesses is that we engage too little with the outside world, not only with the general public, but with governments. If you look at what the aviation industry has achieved in terms of emissions reduction, noise reduction, NOx reduction, etc over the past 50 years, it's a pretty amazing achievement. Commercial engines are 48% more efficient and have 10 decibels less noise."
A "no carbon moon-shot" to eliminate net carbon emissions by 2050
Since the Paris Agreement and the consequently increased focus on climate change, there are those who argue that aviation needs to raise its game further to mitigate its impact on the environment.
Aviation must find a way to catalyse greater and faster progress in the development of biofuels and in capturing the public imagination in a way that both gives credibility to the sector's achievements and targets in controlling carbon emissions and also improves the perception of its contribution to human well-being.
Speaking at AIT, Professor Lipman called for a "no carbon moon-shot" by the aviation industry, with a target to eliminate net carbon emissions by 2050. This is much more ambitious than the existing target to halve emissions from their 2005 level by 2050.
Analagous to US President John F Kennedy's 1961 announcement of a goal to put a man on the moon by the end of that decade, the concept of a moon-shot is to galvanise action and concentrate resources in support of a target. A high profile and ambitious programme can also serve to attract support from a wider constituency. Moreover, setting a target for 2050 gives time for technological advances.
"We have time," said Professor Lipman, "2050 is more than 30 years away. If you go back 30 years, there wasn't an internet. In that time frame, there is an opportunity. We have to position ourselves as being essential to society, so that people who are not just in the industry, but the Bill Gates of this world will be saying 'we've got to look and see how we can fix the aviation thing' and throw two hundred million dollars at it."
Save the world, take to the skies
The moon-shot analogy may be a way to galvanise the aviation industry, the wider travel and tourism sector, governments and other stakeholders into uniting around a common goal of carbon-free air travel.
Before that can be achieved, however, the industry needs to be more forceful in communicating its positive impact on economic growth, growth which helps to generate the resources needed to tackle climate change. IATA's Tony Tyler has previously urged "save the world, take to the skies".
Mr Tyler took up this theme at AIT: "The societies that can do something about environmental issues are richer societies. If you look where the real environmental mess takes place, it's in societies that are too poor to do anything about it. […] We all agree aviation enriches societies, it helps drive economies, it helps to lift people out of poverty. So if aviation is successful in doing that, then we will have a richer world and a world that is more capable of addressing these longer term issues".
To that extent, aviation holds its future in its own hands.