The airline and aerospace industry are looking with great anticipation at Montreal in the next two weeks, where the International Civil Aviation Organization (ICAO) holds its 41st Assembly from September 27 until October 7. On top of the agenda of the 193 states is establishing a clear Long-Term Aspirational Goal (LTAG) on how to reduce carbon emissions. But will it go beyond resolutions and just words on paper? ICAO Assembly is all about net zero. Preparatory work for the Assembly has already been concluded in July when during another ICAO meeting, ministers and officials urged countries to support the LTAG of net-zero carbon emissions in 2050. In the coming two weeks, many discussions and negotiations should result in a solid long-term strategic plan that has the full support of as many countries as possible. This requires progress to be made on two topics: the CORSIA offsetting scheme and the production of sustainable aviation fuels (SAF). Stricter targets for 2050 The last ICAO Assembly was in 2019 and confirmed emission reduction targets, preferably through improvements in aircraft technology, operational improvements, and the widespread introduction of SAF. This week’s ICAO Assembly comes after the industry’s deepest crisis ever: the Covid pandemic. Airlines were focused on survival and in this situation it was easy to forget that there was another urgent problem to be addressed: climate change. The United Nations Intergovernmental Panel on Climate Change (IPCC) made it clear this summer that climate change is ever-more evident. It called for real action to reduce greenhouse emissions if global warming is to be reduced to 1.5 degrees Celsius in 2050. Since 2009, the aviation and aerospace industry has been aware that action is needed. The first step was a short-term goal to reduce emissions by 1.5 percent each year, a mid-term goal to curb emissions through carbon-neutral growth, and a long-term goal to reduce emissions by fifty percent in 2050 compared to 2005 levels. During its 2021 Annual General Meeting in Boston, the International Air Transport Association (IATA) stepped up its commitment from this fifty percent target to become fully net-zero in 2050. A similar resolution was also adopted by the Air Transport Action Group (ATAG), which includes all the major manufacturers, airports, and air navigation service providers. Everywhere, administrations have adopted aviation climate policies. The 2021 US Climate Action Plan and the SAF Grand Challenge incentivize the production of SAF through tax credits. It is already seeing some progress, with various US airlines announcing the uptake of SAF and producers investing in new facilities. Already, most of the sustainable aviation fuel is produced in the US. But the plan also identifies the development of new technology, operational improvements, electrification, and potentially hydrogen as actions to decrease emissions. In Europe, the European Commission proposed a set of regulations in its Fit for 55 policy program. Contrary to the US, Europe prefers to stimulate the production and use of SAF through mandates, while at the same time reducing allowances on carbon offsetting and introducing taxes on air fuel. The current Emission Trading System only covers intra-European flights, but Fit for 55 expands this to all international flights by EU carriers departing the EU. Following much debate, the program was extensively amended by the European Parliament in July to a level that has worried European airlines. They fear that the strict regulations to which they are subordinated will benefit non-European carriers and disrupt the level playing field for aviation, making hubs just outside the EU borders like Istanbul more attractive. Hence the call on the ICAO Assembly to restore unity and keep the airline industry on the same page when it comes to climate measures. CORSIA One of the topics that need finetuning is ICAO’s own Carbon Reduction and Offsetting Scheme for International Aviation (CORSIA). Established during the 2016 Assembly, the system targets to offset CO2 emissions “that cannot be reduced through the use of technological improvements, operational improvements, and sustainable aviation fuels with emissions units from the carbon market,” as ICAO explains. The CORSIA pilot phase started in 2021. It runs until the end of 2023 and is supported by 115 countries, albeit on a voluntary basis. Absent are major countries like Russia, China, India, and Brazil, all for their own reasons. Phase 1 covers 2024 through 2026 and is still voluntary. The mandatory phase for participating countries starts in 2027 and runs through 2035. It requires countries to offset emissions from all international flights, so domestic flights are excluded. That’s a large part if you consider the size of domestic markets in for instance the US, Russia, China, or Brazil. According to IATA figures, 38 airlines currently offer offsetting programs. Critics like the non-governmental organization Transport & Environment in Europe and Greenpeace label these programs as greenwashing. “Pay €2 to greenwash a flight to New York with UN aviation scheme”, says T&E. It calculates that EU-based airlines would have to pay just €118 million in 2030 for offsetting their emissions on transatlantic flights, or 0.4 percent of their operating costs. That CORSIA is only mandatory until 2027 and not all nations participate confirms its weakness, critics say. They wanted 2020 to be applied as the baseline year for emission calculations. This met strong opposition from IATA, which stated that using data from the first Covid-year with much-reduced flying would represent unrealistically low carbon emission levels. Last August, ICAO’s Council (the daily governing body) agreed that no data from 2020 should be used but that the baseline should be referenced on 2019 data only. The aviation industry is looking at multiple strategies to curb emissions, says the Air Transport Action Group. (Airbus) While it was affirmed in 2019 that CORSIA is the only market-based measure applied to international flights, IATA is concerned that states and regions are applying or considering the application of their own carbon pricing instruments or ticket taxes to address emissions from international aviation that will be covered by CORSIA. This includes the European Union. In a working paper for this week’s Assembly, IATA is pushing for a reaffirmation of the original CORSIA plan: “As such, we respectfully request the 41st Assembly to reaffirm and reinforce the principles that CORSIA will be the single market-based measure applied to international aviation and States will not apply measures to cover international emissions covered by CORSIA.” The United States fully supports CORSIA as “a critical piece of ICAO’s “basket of measures” to address international aviation’s climate impacts”, but makes some recommendations to improve it. With SAF becoming the most significant tool in international aviation’s CO2 emissions reduction strategy, “CORSIA’s role as the mechanism for reporting and tracking SAF use will become increasingly important as SAF deployment increases globally. The United States has developed and is implementing a “SAF Grand Challenge.” We expect similar initiatives to arise in other States and believe that the CORSIA infrastructure will be important to make those initiatives successful,” the US says in its working paper. The European Union working paper calls for a reduction of in-sector CO2 emissions by one-third of 2019 levels in 2050 and a net-zero CO2 emissions aspiration by 2050 with a primary role of in-sector reductions and limited out-of-sector reductions through carbon sinks and permanent greenhouse gas removals. To monitor the progress, the EU pleads for a system that is based on CORSIA. “The system to be established is to build upon the system successfully introduced under CORSIA, although not limited to fuel burn, but also cover changes in the aviation value chain: technology advances, deployment of new aircraft, sustainable aviation fuels, operational improvements should also be monitored. It should also take into account CORSIA rules such as CO2 life-cycle values for CORSIA eligible fuels and consider out-of-sector measures while ensuring that no double counting may arise for emission reductions in the context of Nationally Determined Contributions under the Paris Agreement. The system should allow monitoring progress towards the achievement of the LTAG.” A group of 27 countries including many EU states, the US, South Korea, and Rwanda calls on the ICAO Assembly “to maximize the environmental ambition of CORSIA and avoid making broader changes to its design while encouraging States that have not yet joined CORSIA to voluntarily join.” SAF A second major topic in Montreal is sustainable aviation fuels. They are key to meeting the target to get to net zero in 2050. SAF would have to take up a 53 to 71 percent share of all emission-reducing measures, with 12 to 34 percent coming from new aircraft and engine technologies, 7 to 10 percent from operational and infrastructure improvements, and the remaining 6 to 8 percent from carbon offsetting schemes, the ATAG Waypoint 2050 study says. SAF has been qualified by ICAO as an eligible fuel for CORSIA, but Qatar is pushing to also include other Low-Carbon Aviation Fuels (LCAF). As AirInsight reported in June from the IATA AGM in Doha, progress on the ramp-up of SAF production is slow. The current production capacity is just 150 million liters per year. There is $17 billion in forward purchase agreements for SAF for fourteen billion liters, but the maximum capacity will be five billion liters in 2025. The US Climate Action Plan targets the production of three billion gallons in the US alone by 2030. To meet demand, airlines worldwide would need between 330 and 445 million tonnes of SAF per year in 2050, the Waypoint 2050 study says. In the US, demand is projected to be 35 billion gallons in 2050. Air New Zealand received its first shipment of Neste SAF on September 15. (Neste) The EU calls on ICAO and its Member States to “take stronger long-term policy actions to incentivize investments and contribute to the development of a cost-competitive SAF market. It is appropriate to establish a global quantitative SAF aspirational goal, based on comprehensive sustainability standards, no later than at the 42nd Assembly.” That is the next Assembly in 2025. Until then, ICAO has scheduled a conference in 2023 that must define a SAF deployment framework that includes waypoints in 2030 and 2040. Countries in Latin America and the Caribbean call on ICAO to help them with an architecture of policies to further promote and implement SAF, on which good progress has already been made. IATA has a clear preference for incentives over mandates to stimulate SAF production. “IATA actively participates in a number of consultations on policy options and is able to verify that policies that are reliant on mandates, either national and regional level, are not an effective tool for advancing deployment of affordable SAF, especially when a mandate is not accompanied by necessary positive measures to boost technology development, feedstock scale-up and support affordable SAF prices. IATA urges governments to set positive policies that would provide incentive programs or direct financial project support, as such measures would not only boost local SAF availability but also stimulate national innovation and jobs in new technology and sustainable applications.” In Doha, IATA Director-General Willie Walsh noticed some movement with major oil companies on the production of SAF. But the airline association and ATAG think that the production of more SAF and power-to-liquid aviation fuels will only happen when the energy sector starts moving. “Decarbonization of international civil aviation will also be dependent on the decarbonization of the energy sector, and will need to compete with other modes’ and industries’ own clean energy needs. At the same time, the decarbonization of the energy sector also presents opportunities - green power and green fuel supply are a way to develop under-utilized land and to create jobs in different innovative activities everywhere on the planet. In this regard, developing countries have feedstock and natural conditions related to the production of renewable energy which constitutes real asset,” IATA says in its working paper. Further ahead, hydrogen is seen as a solution to reduce carbon emissions over short and medium-haul flights. Although the introduction of hydrogen is not without challenges (both technically and on the supply side), they are deemed manageable. France and The Netherlands want ICAO to take an active role in preparing “in due course the necessary harmonized framework and regulations, and useful guidance documentation, so that no delays are introduced (except if they pertain to technology readiness and financing).” In July, ministers and officials of ICAO member states already agreed on a collective goal to reach net zero in 2050. (ICAO) Under scrutiny The ICAO Assembly will be under scrutiny from many, including pro- and contra-aviation stakeholders. OEMs like Boeing and Airbus will be in Montreal “to share expertise and promote key issues” (Airbus) while watching if ICAO will maintain a level-playing field for the airline and aerospace industry. The International Coordinating Council of Aerospace Industries Associations (ICCAIA) calls upon ICAO that in order “to deliver on objectives, OEMs, like the entire aviation industry, need certainty and stable global frameworks that support the ambitions and unlock investments” in new airframe and engine technologies, as well as new energy sources, including SAF, e-fuels, and hydrogen, IATA “encourages the adoption of an LTAG that recognizes the contribution of all pillars of industry climate action, and the central role that sustainable aviation fuels will play in the sector’s decarbonization. The rate of decarbonization that is identified as likely by the ICAO LTAG process, even in the more ambitious scenarios, should clearly recognize the uncertainties around technologies, fuels, and operational improvements that have not yet been deployed or tested at scale in normal airline operations. In addition, ICAO should not prescribe any specific technology or set of technologies to ensure that the industry is allowed the flexibility to pursue emissions reductions through the most cost-effective and efficient means available.” The member states of the African Civil Aviation Commission (AFCAC) call on ICAO to support them financially by establishing a special fund mechanism so that the goals set out in the long-term aspirational goal will become available to developing countries with less financial resources too. An almost identical call is made by China. Although China supports the roadmap to net zero, Chinese airlines stated during last year’s IATA AGM in Boston that the target year should be 2060 rather than 2050. It is expected that China will maintain this position in Montreal. ‘LTAG is a smoke screen’ NGO Transport & Environment will also closely follow events in Montreal but has stated beforehand that it has no expectations at all of the outcome. The long-term aspirational goal will be a non-binding agreement. “This long-term emissions reduction goal with no enforceability mechanism is a smoke screen,” T&E’s aviation director Jo Dardenne said last week. “A goal means nothing if there is no way of implementing it. The goal that is going to be agreed is non-binding, it doesn’t force states to commit to emission reductions. One of the main tools that ICAO has to try and deal with emissions is CORSIA, which is a common offsetting scheme that basically allows emissions from aviation to continue to grow. Sure, having a goal is better than having none at all, but let's not pretend that this will cure aviation’s climate disease. We need more ambition,” Dardenne said during an Aviation Week webinar on September 22. Transport & Environment is saying that CORSIA does little to reduce carbon emissions. (T&E) According to T&E, only 31.7 percent of carbon emissions in 2030 would be subject to CORSIA if 2019/2020 are used as a baseline, or even just eleven percent if only 2019 is used for reference as the ICAO Council has decided in August. When it comes to SAF, Transport & Environment is pushing for mandates rather than incentives. “In terms of mandating versus financing, you need mainly to mandate and then to help finance. It shouldn’t be the other way around.” Dardenne added that ICAO nor the airline industry has a scenario without growth for emissions, which is completely incompatible with the 2015 Paris Agreement on climate change. “Having transport ministries continue to come to the negotiating table with offsetting as their golden solution is unacceptable. CORSIA is a non-starter for our heating planet. Whatever ICAO decides during its Assembly, it will never rise to the challenge of aviation’s climate problem.”
