The International Air Transport Association (IATA) has called on governments worldwide to support the development of Sustainable Aviation Fuel (SAF) as a critical step to achieving its target to cut net emissions to half 2005 levels by 2050. This target was reinforced by a resolution at IATA’s 76th Annual General Meeting, which also commits the industry to exploring pathways to net zero emissions.
“We have long known that an energy transition to SAF is the game-changer. But energy transitions need government support. The cost of SAF is too high and supplies too limited. This crisis is the opportunity to change that. Putting economic stimulus funds behind the development of a large-scale, competitive SAF market would be a triple win—creating jobs, fighting climate change and sustainably connecting the world,” said Alexandre de Juniac, Director General and CEO of IATA.
Government stimulus packages could help promote SAF through direct investment, loan guarantees and incentives for the private sector, as well as regulations that channel feedstock towards hard-to-abate sectors such as aviation rather than to other low-carbon transport industries.
The aim of stimulus funds would be to create a competitive market. Currently SAF is on average between 2-4 times more expensive than fossil fuels with current global production of about 100 million litres a year which is just 0.1% of the total amount of aviation fuel consumed by the industry. IATA estimates that stimulus investments could help boost SAF production to the 2% (6-7 billion litres) needed to trigger a potential tipping point to bring SAF to competitive price levels against fossil fuels.
SAF was recently highlighted in the cross-industry report Waypoint 2050 by the Air Transport Action Group as the most important pathway to achieving the aviation industry’s climate goals. The report also noted the potential for electric and hydrogen powered aircraft in aviation’s climate action but said that commercially applicable solutions are at least a decade away and offer the greatest potential for short-haul aircraft. Long-haul operations are likely to remain dependent on liquid fuels for some time to come.
“As the world looks to re-boot the economy, let’s not waste this opportunity to create jobs and an industry that will yield huge dividends for the public good. If we can drive SAF prices down as we drive production volumes up, we will be able to sustainably connect the post-COVID-19 world,” said de Juniac.
Meanwhile, IATA has launched the Aviation Carbon Exchange (ACE), an important new tool to help airlines meet their climate commitments.
ACE is the first centralised, real-time marketplace that is integrated with the IATA Clearing House (ICH) for the settlement of funds on trades in carbon offsets. IATA’s Clearing House ensures that ACE can offer a seamless and secure settlement system which guarantees payment and delivery of the carbon credits.
“Airlines are serious in their commitment to reduce emissions. And they need a reliable tool to access quality carbon credits in real time. ACE will be a key tool helping airlines efficiently manage these important transactions,” said Alexandre de Juniac, IATA’s Director General and CEO.
Airlines reiterated the industry’s commitment to cut net emissions to half 2005 levels by 2050 in a resolution of the 76th IATA Annual General Meeting (AGM). A key step is the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) which will deliver carbon neutral growth for international emissions from 2021. Airlines are also buying carbon credits as part of individual carrier commitments or to offset domestic operations.
JetBlue has completed the historic first trade on the ACE platform. It purchased credits in the first phase of the Larimar wind farm project in the Dominican Republic which began development in 2015. When the entire project is completed it will reduce average emissions by more than 200,000 tonnes of CO2 per year.
“Our planet is physically changing, as are the expectations of our customers, crew, members and investors,” said Robin Hayes, CEO of JetBlue and Chair of the IATA Board of Governors, noting the importance of addressing the climate change challenge.
“While our industry’s short-term priorities are focussed on COVID-19 recovery, now is the time to rebuild operations in more sustainable ways such as adopting Sustainable Aviation Fuels (SAF) and setting clear strategies to reduce net aviation CO2 emissions. The Aviation Carbon Exchange will help us continue to meet our climate commitments by providing simplified and transparent access to legitimate, third-party certified carbon offsets,” said Hayes.