Growth in air travel needs to be curtailed and the use of sustainable aviation fuel (SAF) needs to be substantially increased between now and 2030 to keep the planet on track for no more than 1.5 degrees Celsius of global warming, according to a recent report.
In 2020, less than 0.1% of aviation fuel demand was met by SAF, whereas under the International Energy Agency’s (IEA) Net Zero by 2050 or 1.5°C scenario, 16% of the aviation sector’s energy consumption will need to come from advanced biofuels by 2030, and a further 2% from synthetic fuels, states the Aviation Sector Strategy report, published by Climate Action 100+.
Alongside the need to ramp up SAF usage to these levels, the report says, that action also needs to be taken in three priority demand management areas, which would keep emissions at half of what they would otherwise be by 2050. These are:
- Keeping business travel to 2019 levels
- Capping long-haul flights of more than 6 hours for leisure reasons at 2019 levels
- Shifting demand to high-speed rail infrastructure where possible.
A failure to scale up SAF usage to required levels, the report warns, would mean that even more stringent demand management constraints would be needed for the aviation industry to reach the 1.5 degree Celsius global climate target. While demand management is likely to be unpopular with the aviation industry, the IEA’s scenario indicates some curtailment of air traffic growth is the lowest-risk, fastest way for the sector to reach the target.
Investors have a critical role to play in encouraging and supporting aviation companies to act on climate change, the report points out. Actions investors can take to facilitate the industry’s transition include ensuring that aviation companies set ambitious short-, medium- and long-term targets for SAF usage, and encouraging companies to disclose their expectations around growth in air traffic demand and how these expectations align with their SAF targets.
On the policy front, investors can push aviation companies to disclose how they are lobbying in relation to policies aimed at reducing the sector’s emissions, ensure that companies and their trade associations are not blocking stronger regulatory measures tackling climate change, as well as directly support more decisive climate action policies, such as those promoting SAF scale-up.
In addition, the report highlights the need for aviation companies to shift their focus from carbon offsetting to the reduction of their own emissions. Although carbon offsets are currently widely used in the aviation industry, the aviation sector will need to decarbonize through decreasing its own emissions. This means that action must be taken to push companies to set targets for the phasing out of offsets to ensure that they replace offsetting with efforts to reduce real emissions.
“The industry holds its future in its own hands,” explains Ben Pincombe, head of stewardship for Climate Change at the UN Principles for Responsible Investment. “The amount of demand management required depends on the rate and scale of SAF rollout in the short-term, alongside well-thought-through technology deployment. If the sector fails to respond effectively, it is likely to face significant and rapid regulatory tightening, and ever greater scrutiny and challenge from capital markets.”