A plane taking off from the airport

A plane taking off from the airport

Green  |  Sustainability  |  Focus On

"Paying to pollute" is not enough. Anti-emissions strategies in aviation

Immediate measures to achieve decarbonisation targets in the aviation sector include auctions for emission allowances, offset programmes and specific taxation proposals. But action is needed on several levels: here is how the market and industrial research do and can play their part

The environmental issue is increasingly relevant in the transport sector, which, as a whole, emits about a quarter of all carbon dioxide in Europe, and of these emissions about 13 per cent are attributable to air transport. 

The aviation sector, net of the crisis due to Covid-19, has seen an increase in traffic over the past decades also thanks to the liberalisation and subsequent 'massification' of air transport. This is certainly a good thing because it has enabled this mode of travel for many people, but at the same time it has seen an increase in total emissions from this sector.

The year 2022, a year in which the number of passengers returned to significant growth and which saw the effect of Covid-19 limited to the first part of the year, will see a fall in traffic of 17% compared to 2019.

In recent years, there have also been positive effects on the environment due to the liberalisation process, leading to an increase in traffic efficiency. 

First, the companies saw very high load factors, with the point-to-point model registering values above 90 per cent in most cases. This means that the number of passengers on board an aircraft has increased.

The second positive factor is the fact that there has also been a lot of competition on costs, and one of the main ones for airlines is fuel. In particular, in many cases, jet fuel can be worth up to 40 per cent of an airline's total costs, and having increasingly efficient aircraft is necessary to remain competitive. It is no coincidence that the most cost-conscious companies have a very young fleet and, therefore, lower fuel consumption and emissions.

This is accompanied by the measures that many airports are taking to achieve zero-impact operations relatively quickly with electric ground vehicles and energy from renewable sources.

As far as flights themselves are concerned, it must be emphasised that the bulk of emissions are due to long-haul transport, which, however, has no substitute. A Eurocontrol study showed that 75 per cent of emissions occur for flights with distances over 1,500 kilometres.

The modal shift is possible for some routes, although it should be noted that many of these covered by high-speed rail have already been replaced in recent years, especially where high-speed has seen the introduction of competition. Examples are the case of the Milan-Rome route, which has seen intramodal competition in the train industry since 2012, or the case of the Madrid-Barcelona route, which has seen competition from a new operator since May 2021. 

The real key issue is therefore not how to succeed in cutting emissions for that 25 per cent of emissions from short- to medium-haul flights, which account for 13.5 per cent of transport emissions, the sector of which accounts for a quarter of total emissions (8 per thousand of total emissions), but how to succeed in making an impact on long-haul flights as well.

There is therefore a need to understand what methods can be used to reduce emissions in general and what can be applied to the long haul.

One of the most promising solutions, to which the European Commission is paying much attention, is Sustainable Aviation Fuel (SAF) whose cost is still very high. Without incentives from the Commission itself or from the Member States, it will be very difficult to reach the targets set (5% in the use of SAF by 2030) and risks weighing heavily on the budgets of companies, mainly European ones.

Another way to try to respond to the externality of pollution is to introduce a cost to emissions. There is already an ETS (Emissions Trading System) that introduces this principle through an auction system. 

However, this system, which the European Commission would like to strengthen, can be distorting for European airlines, especially for intercontinental flights. Introducing such a system that only charges customers departing from European airports makes direct flights from Europe less competitive than those using hubs outside Europe.

Such a system is therefore very complex to use only at European level as it is distorting. Rather, one could try to introduce such a system globally, although acceptance by other states would be complex.

The principle of paying for the negative externality through a market system (auctions) is logical, but it is also relevant to remember that most aviation emissions come from long haul, which sees competition from non-EU airlines using hubs outside the EU.

Another method is offsetting pollution through decarbonisation projects, which have come under increasing scrutiny because they are not efficient in effectively reducing emissions from aviation. Some airlines have decided to cancel some of these programmes through projects in other areas.

It should be emphasized that business aviation has been put under the microscope for the type of transport. However, it is worth mentioning that the impact of this specific sector is approximately 1.3 per cent of air transport.

In this case, the introduction of a specific taxation for pollution (at the current high prices per tonne of 'carbon permits') could bring in a revenue of around EUR 170 million at the overall European level (a small figure, considering that Italian public expenditure is over EUR 1 trillion per year).

What other policies can be most easily implemented to reduce emissions? 

One, which has been the subject of discussion for too long, is the harmonisation of European air traffic. 

The creation of a 'single European sky' is necessary not only to save time for flights, but also to reduce overall emissions through more efficient management. This point, which could be implemented very quickly, is only opposed by a few lobbies that do not actually want European integration. 

The technological development of electric or hydrogen-powered aeroplanes is the other factor that can bring about a major change in 2050. Regarding the former, it will not be easy to achieve the efficiency of long-haul flight batteries, in the latter, the real deciding factor will be how the hydrogen will be produced. Only 'green' hydrogen, i.e. produced using renewable energy, achieves environmental benefits, but is much more expensive than other modes of hydrogen production.

The issue of 'pay for polluting' is therefore one of the main topics for the coming years, especially at the European level, but a real strategy for decarbonising the aviation sector goes through multiple actions such as SAFs, new technologies for aircraft, improved energy efficiency on the ground, a single European sky, more competition in rail transport and many small actions that together can lead to achieving the challenging goals that the European Union has set for itself.

Andrea Giuricin - Ceo of TRA consulting, a strategic consultancy company based in Barcelona and Milan, focused in the travel, transport, infrastructure and logistic industries. Adj. Prof. at Transport Economics at University Milano Bicocca, responsible for transport studies at CESISP and former visiting professor at China Academy Railway Sciences. He is senior consultant for the World Bank, reforming transport sector in Asia and Africa and consultant at United Nations for transport sector. He cooperates with several Transport Authorities (in Spain, Italy, UK, France, Malaysia, South Africa), the European Commission and other international institutions. He published several books and analysis quoted in the media (FT, Bloomberg, Reuters, Xinhua, Wall Street Journal, Business Week, BBC, The Economist, Le Monde, O Globo).

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