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Decarbonization Remains an Aviation Priority, But Flyers Will Pay (Today)

While the airline industry is dedicated to getting to net zero emissions by 2050, the cost may come back to flyers in the form of increased fares.
Reducing carbon emissions is one of the most important topics across the aviation industry today. But without additional support from supply chain stakeholders, flyers may be the one bearing additional costs.

 

The International Air Transport Association outlined their progress towards net-zero emissions by 2050 at their 2024 Annual General Meeting and World Air Transport Summit in Dubai.

 

“The Transition to Net Zero Will Require Customers to Pay”

Among all ways to reduce CO2 emissions, producing and using sustainable aviation fuel (SAF) has the greatest potential to get to net zero by the target date of 2050. However, the aviation industry is facing a major problem in sourcing and using SAF. By the end of 2024, IATA estimates the refining industry will only produce 1.5 megatons of SAF, or only 0.53% of total jet fuel available worldwide.

 

With governments starting to mandate more SAF usage, the airline industry says they cannot bear the costs of purchasing the limited amount of fuel and credits alone. In turn, some of those costs today will be passed on to customers in the form of increased airfare.

 

“I’m sorry to say, but the transition to net zero will require customers to pay,” said IATA director general Willie Walsh. “I’d love to think that we as an industry can do it without their support… SAF is more expensive than jet kerosene. Those costs cannot be borne by the industry.”

 

Although flyers will be paying for more sustainability, the good news is that IATA is working with other stakeholders to reduce costs and create a global SAF marketplace. Under IATA’s SAF registry program, 17 airlines, one airline group, six national airline authorities and one fuel provider have agreed to work together towards reducing costs and making travel more sustainable both financially and environmentally.

 

“This market does not exist. There’s no place where you can look on your screen and see the SAF price,” said Dr. Marie Owens Thompson, senior vice president of sustainability and chief economist at IATA. “This is not a liquid market. We are trying to do our best to help and ensure that actually happens. Similarly, we are also involved by being able to help everyone get involved in tracking SAF and net zero.”

 

By creating more balance in SAF production and increased incentives for refineries to produce SAF, IATA says they can reduce administrative and cost layers, which in turn will reduce the long-term price of airline sustainability – creating a market where everyone can breathe easier.

3 Comments
J
jrm68 June 21, 2024

Net zero is a pipe dream. We can't force other countries airline industries to do anything, example is Iran has several international flying airlines, so why would they follow these rules? Also the future's biggest populations, China, India, Pakistan, and Africa will be let out of the rules since they are "developing".

D
dhturk June 11, 2024

The customers "always pay". Which begs the question, how are third world carriers going to foot the bill?

H
health1au June 9, 2024

Should the government mandate come before availability, or should availability come before the government mandate?