In 2018, system-wide global commercial airlines are expected to reach $824 billion in revenue, almost double what they earned 12 years ago.
But in order to keep these businesses sustainable, literally, the International Civil Aviation Organization (ICAO) Assembly adopted the Carbon Offsetting Scheme for International Aviation (CORSIA) agreement at its 39th session in 2016. Under the plan, aircraft operators will be required to purchase offsets, or “emission units,” for the growth in CO2 emissions covered by the scheme, aiming to to address any annual increase in total CO2 emissions from international civil aviation above 2020 levels.
The plan, however, will be implemented in phases. From 2021 until 2026, the scheme will only apply to international flights between states that volunteer to participate in the plan’s first phase. All other international flights will be exempt. From 2027, participation will be mandatory for states meeting certain criteria related to their level of aviation activities, except Least Developed Countries (LDCs), Small Island Developing States (SIDs) and Landlocked Developing Countries (LLDCs), which are exempt, unless they volunteer to participate.
Key drivers for the goal are modern aircraft built with fuel efficiency gains of 20 to 30 percent compared to previous models as well as the development of sustainable aviation fuels (SAF). One of the biggest challenges in meeting the latter goal is the classic supply-and-demand dilemma that SAFs are in short supply and are therefore expensive. As such, the International Air Transport Association (IATA), which consists of 280 airline members across 120 countries, approved a resolution in June that called for governments to implement policies that help accelerate the deployment of SAFs.
Such policies could include:
- Easier access to finance, including loan guarantees and capital grants
- Supporting demonstration plants and supply chain research and development
- Putting SAF on an equal footing with automotive biofuels through equivalent public incentives
- Legislative certainty over an extended period of time to give investors confidence to finance new production facilities
Then, in October, IATA called for greater urgency in the partnership between governments and the airline industry, hoping to further broaden the coverage of CORSIA beyond the current 72 countries (or 80 percent of international aviation). Even though IATA representatives such as Alexandre de Juniac, IATA’s director general and CEO, believe it’s a great start, the airline industry’s other ambitious goal of cutting net emissions to half the industry’s 2005 levels by 2050 require the industry to move “much faster on key issues such as the development of sustainable aviation fuels and the reform of air traffic management,” says de Juniac.