The Climate of Business #55: The Net Zero Pathway for Aviation

Climate Change Reality

Energy crisis means a ‘very dark winter’ for Europe’s forests (Politico Pro)

How the world has gotten much worse for animals (Vox)

How glaciers melted 20,000 years ago may offer clues about climate change's effects (NPR)

'Steam loops' under many cities could be a climate change solution (NPR)

Nigeria's worst floods in a decade kill 500, displace 1.4 million (France24)

They’re world champions of banishing water. Now, the Dutch need to keep it (The New York Times)

Business Climate Reality

New Zealand proposes taxing cow burps (AP News)

US senators push for regulator crackdown on carbon offsets market (Financial Times)

What if Apple made an e-bike? (Bloomberg)

Banks may leave Mark Carney’s climate group on legal risks (Investment Week)

What does sustainable living look like? May be like Uruguay (NYTimes)

Plastic pollution could trigger legal claims worth billions Of dollars (Forbes)

Demand for ESG investments outstrips supply, PwC finds (Financial Times)

“There’s a bit of a cultural issue”: Pete Buttigieg gets real about the EV revolution (Vox)

Reality Check

As promised last week, from this edition onwards for the coming weeks until the end of the year, I will cover weekly an industry and its path to net zero, highlighting challenges and short- and long-term solutions. This week aviation. Next week - the software industry.

Industry Profile  

• Emissions: 2.5% of total global carbon emissions
• Net Zero Industry Pledge: 2050
• Part of Paris Agreements: No  
• Expected Growth: Emissions doubled between 1990 and 2019, forecasts passenger numbers will more than double to 10 billion a year by 2050

Important bodies to know

ICAO (International Civil Aviation Organization) is the assembly to facilitate decisions to drive important post-pandemic enhancements to air transport system resilience. It is a UN body that promotes cooperation among member states on air transport and although it cannot impose rules on countries, still national governments tend to abide by their decisions

IATA (International Air Transport Association) supports aviation with global standards for airline safety, security, efficiency and sustainability.

Aviation & Sustainability 

The industry pledged that it is committed to meeting the goal of net-zero emissions by 2050, by creating the best solutions despite the expense, however it needs time to implement those “best solutions”. They have set a new baseline for emissions and carbon offsetting, which initially was going to be an average of flying emissions in 2019 and 2020. However as the Covid pandemic saw air transport decline rapidly, they agreed to use 2019 carbon emissions. New threshold that has now been set for companies is 85% of 2019 carbon emissions, which in turn allows for a higher level of carbon dioxide pollution before airlines must purchase offsets. This scheme will now only cover 22% of future emissions in 2030 adding only €2.40 to the price of a long-haul flight to offset passenger's emissions.

Challenges to Net Zero Transition

• Accuracy of emission estimations: The aviation emissions carbon emissions are usually estimated from direct flights however have many factors that have an influence, such as older aircrafts, layovers, reduced number of seats in the aircraft, and even the ghosts flights some airlines take to secure slots at airports 
• Unaccounted for, negative externalities: Planes also create contrail cirrus clouds, which the water-vapour trails produce by engines that trap infrared radiation. This radiation could have an overall warming effect, but also cause local or regional climate responses.
• N0x: Airplanes also release Nitrous oxide N0x, which is 300 times more potent than carbon dioxide and depletes the ozone layer. Currently aviation is considered to contribute to 0.4 percent of releases globally.

The Path to Net Zero for Aviation

Current solutions are focused on carbon offsetting: IATA is predicting that airlines will still rely on carbon offsets for 97% of their carbon-emissions reductions in 2025, with only a reduction to 77.5% in 2035. Issue remains the quality of carbon offsets. Many studies show most carriers are relying on inexpensive, low quality offsets, such as forestry projects in developing projects, that in turn may not guarantee the reduction of emissions and don’t have long-term effects.These types of projects are vulnerable in the long-term as trees can burn, die or be cut down if policies change, reversing their carbon storage and not making a meaningful dent in emissions.

Solutions for decarbonisation and sustainable transformation of the industry 

Short-Term

• Changes in design with blended wing that combines the wing with the fuselage
• Analysing flight paths and making them more efficient to lower the impact of contrail clouds
• Maximise plane design to fit more people per flight
• Use of sustainable aviation fuel (SAF) like biofuel, low-carbon or renewable jet fuels - This would mean fleets might not need to be completely remodelled plus it’s a quicker solution then other forms of renewable energy. Current SAF can reduce GHG emissions by up to 80% on a life-cycle emissions basis as compared to fossil fuel. However not many solutions are available to use, plus they can be expensive. Further, commercial production of SAF is only approximately 0.05% of total EU jet fuel consumption

Long-Term

• Batteries - Other forms of transport have seen the use of renewable energy as electricity stored in batteries. However this solution becomes an issue in aviation due to weight as batteries are too heavy for most aircrafts, particularly long-haul flights. This is a good option for short-haul flights. 
• Use of Hydrogen - Planes using hydrogen will only emit water, it eliminates completely CO2 emissions. Hydrogen combustion could reduce the climate impact of flight by up to 75%, and fuel-cell propulsion by up to 90%. Hydrogen can be produced carbon-free with the development of forms of green hydrogen. Promises that it could also carry more passengers, more than hundred per flight even over thousands of kilometres. Reports say hydrogen-powered planes could enter the market as soon as 2035

Issues that require further investigation 

• Adapting aircraft designs and systems to hydrogen
• Storage inside the plane to ensure safe and economically viable hydrogen-powered air transport
• Hydrogen fuel has a very high energy content by mass, 4 times higher than kerosene. 
• Liquid hydrogen also needs to be stored in specific temperatures
• Transporting hydrogen to airports to be used to refuel on runways

Carbon Price