The international aviation industry accounts for 2-3 percent of all greenhouse gas emissions annually and can no longer operate in a sustainable manner without major transformation. In October 2022, the International Civil Aviation Organization (ICAO) met for their 41st assembly. 2,500 delegates from 184 States and 57 organizations adopted a collective long-term global aspirational goal (LTAG) of net-zero carbon emissions by 2050. This target should be viewed as a deadline for the airline industry to change the way aircraft are fueled, flown, and operated. The target is challenging and rigorous but with collaboration, it is possible. Not only is the target possible, but it will also create a new wave of opportunities inside and outside of the industry.
Innovation Opportunities Across Fuel, Fleets, and Infrastructure
In 2019, the global aviation industry grew 5.3% and reached a net worth of $838 billion dollars. After the pandemic in 2020, the industry is expected to make a comeback in 2023 and return to a growth state at a rate of 4.3% until 2050. With the resurgence of the airline industry and an added pressure of net zero pledges, the road to 2050 will begin at ground level. When looking at the largest emitters within the aviation industry, there are several key places where emissions could be reduced: jet fuel, planes, and on-the-ground infrastructure. An Airbus 350 burns around 32 pounds of jet fuel per nautical mile, which equates to around 14,000 gallons of fuel used for a trip between New York and London. When looking at the Boeing 747 quad jet, the numbers begin to rise steeply to about a gallon per second. There are currently 57 flights between NYC to London on any given Monday, which raises the question of how much longer this behavior can be supported under growing regulatory pressure, particularly in the European Union.
Changing Consumer Habits and Potential for Economic Payoff
Faced with such challenges to its operational model, the industry will need to transform. The aviation industry has adapted itself to accommodate consumers’ needs before so why not do it again? With such a wide range of economic opportunity associated with the future of the aviation industry, what are the barriers? Primarily, they have to do with short-term cost and traditional approaches for calculating return on investment (ROI). Past opposition against climate change used to include that it was too expensive to discuss right now or the classic “if it isn’t broken don’t fix it.” However, when looking at the data, increasing intensity and volume of natural disasters, which are now seen as directly connected to climate change, cost the US 145 billion dollars in the year 2021 alone. Now that climate change is starting to hurt Americans’ pockets, reducing emissions doesn’t seem to be an expensive trade off. Reducing GHG emissions from the aviation industry may not be all clear skies and smooth sailing, but it will be an avenue of economic opportunity in several ways.
Aviation Industry Winners Are Already Pushing Back from the Gate
The ICAO 2050 net zero targets are undoubtedly going to be a challenge, but with continued collaboration the business opportunities are plentiful. Most emissions reductions will come from aircraft efficiency, on the ground infrastructure, and sustainable aviation fuel.
From a bottom-up approach, consumers are beginning to be more conscious of where they spend their money regarding the brand’s public attitude towards climate stewardship. This consumer trend is on track to only grow and apply pressure on brands to seriously consider their sustainability initiatives. The ICAO has now set the stage for a grand reshuffling of the key aviation industry stakeholders. Aviation companies and their ecosystems can transform to meet the inevitable or get left on the tarmac with flights permanently delayed.
Gaven Simon is a member of the industrial sustainability and energy transition team at ARC Advisory Group.