With $118bn of loss in 2020, airlines are facing an economic downturn together with tightening environmental regulations and industry pressure. To help management teams navigate this landscape, or for general interest, we have compiled and evaluated a list of carbon reduction strategies for the airline industry, including their cost-effectiveness and likely implementation date.
1. Carbon offsetting
Increasingly, airlines around the world are committing to carbon-neutral operations. The likes of Easyjet, Delta, or Qantas have chosen carbon offsetting as part of their net-zero strategy. Carbon offsetting allows airlines to compensate for their CO2 emissions by funding sustainable projects elsewhere on earth. Third parties like Verra or Gold Standard ensure the quality of the offsets. Meanwhile, popular platforms such as CarbonTradeXchange, Wren, Clean CO2 and Ecologi offer projects ranging from tree planting, plastic waste reduction to building clean energy sources in developing countries. Some organizations, such as JetSetOffset, even give this choice to passengers.
While carbon offsetting reduces global emissions in the short-run, paying to emit is not a long-term solution for a sustainable future. Moreover, the cost of offsets can climb high if not combined with other carbon-reducing strategies.
2. Understanding data
Understanding multi-layered data on fuel management, flight planning, in-flight, and on-ground operations are key factors for decarbonizing aviation. Operational processes in aviation do not act in individual silos, meaning competitive advantage lies in understanding the full operational dataset from end to end. As a result, airlines, airports, and hubs are investing in software tools that synthesize data from various processes and help uncover the optimum initiatives for cutting emissions. For example, IATA is launching a project to share flight turbulence data among airlines. NATS and NAV Canada are trialling systems to maximize opportunities to save fuel from jet streams in flight. Airlines can draw upon such data to provide more predictable flights, while also reducing carbon intensity with more optimal altitudes.
3. Addressing employee behaviors
As aircraft are still being operated by humans, captains still have an impact on the fuel burn of engines. Normal operational practices, such as idling or step down descent can increase fuel consumption by up to 37% compared to modern and more efficient operations. Fortunately, behaviors can be improved significantly at a minimal cost. Our team’s behavioral feedback for 335 Virgin Atlantic captains saved 54M lbs of CO₂ as well as $6.1m of fuel savings over a period of 8 months.
4. Fleet modernization
Major airlines are demanding more efficient aircraft with fuel-saving engines and light-weight materials. Planes like the Boeing 737-Max or Airbus A320 neo perform at 20% to 25% increased fuel efficiency compared to their predecessors. The modernized aircraft can save around $12,000 in fuel costs through one return journey from JFK to Heathrow resulting in significant carbon savings. However, the cost of replacing 50 aircraft can exceed $5 billion, with the average price for the new model surpassing $100 million. Considering an average airline earns approximately $300 million per year, modernizing a fleet at scale is a substantial capital investment. Large airlines benefiting from economies of scale can balance out the cost with future fuel savings, while smaller airlines can consider the return on investment carefully with adequate long-term planning. Likewise, retrofitting technologies (e.g. wingtips) or even electric taxiing (EGTS) can help to reduce fuel burn by making adjustments to current fleets.
Hydrogen has been on the aviation clean-tech agenda for a number of years due to its potential to reduce climate impact between 50 to 90 percent owing to it’s high energy storage capabilities. This may be why MIT Technology Review highlighted it as one of the ten “Breakthrough Technologies of 2021” and why industry leaders Airbus are developing their ZEROe concept to use hydrogen propulsion in flight.
In a practical sense, hydrogen can be used as a fuel for aircrafts when it is combusted in a special burning engine or as fuel cells that power electric motors. It’s energy-density-per-unit mass is approximately three times higher than kerosene meaning it is chemically a more efficient source of energy than fossil fuels.
European experts found that hydrogen could feasibly power aircraft with entry into service by 2035 - particularly for short-range flights. However, challenges remain such as coordinating refueling infrastructure at airports, facilitating hydrogen storage in planes, and new aircraft design for longer-range flights. Nevertheless, longside a future mix of aircraft and propulsion technologies complemented by an effective policy framework, hydrogen can play a significant role in the industry’s decarbonization ambitions.
6. Sustainable Fuels
Sustainable Aviation Fuel (SAF) is produced from biomass which absorbs CO2 emissions from the air. This way, all the emissions released during a flight powered by SAF have previously been cleared from the air. However, sustainable aviation fuels are not widely used because they have an economic disadvantage over petroleum. This barrier could be overcome when only 1% of jet fuel is replaced by SAF and blending programs (mixing SAFs with traditional jet fuel) are already beginning across the world. Although several commercial airlines have achieved successful trials of SAF, the difficulties of sourcing sustainable feedstock, balancing the future demand for biofuels from other industries, and the lack of political initiatives suggests that large scale SAF usage no sooner than 2035.
7. Electric aircraft
Companies like Ampaire and magniX have had success with electrifying small commercial aircraft, and proved the effectiveness of short-haul electric flight. The fuel costs required by Ampaire’s hybrid 6-to-19-passenger aircraft is 25%-30% lower compared to its kerosene-powered predecessor, and magniX has been proud to announce it’s first all-electric flight cutting emissions to zero. This is good news for regional airlines operating on a small-scale, but the electrifying challenge for large commercial long-haul flights will not be solved in the next 30 years. The battery in large aircraft weighs 30-times its kerosene equivalent, making the plane too heavy to take off. Still, it is worth keeping an eye out for progress in the development of electric aircraft. Norway has set a target to fly all its regional routes on electricity by 2040, and with advances in the battery technology electric aircraft will be the most promising solution for long-term sustainable aviation.
Until sustainable aviation fuels, electric flight, and hydrogen are scalable and economically viable along the value-chain, there are a number of solutions to consider in the interim. We recommend for the short-term, combining the following solutions; investing in data management, addressing employee behaviours and operational efficiency opportunities, and joining a high-quality and verified carbon offsetting program, as long as sufficient due-diligence of risks and returns is conducted.
Main photo by Tomas Williams
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Signol is a software platform that draws on insights from behavioral economics to encourage employees to make more efficient decisions. Signol provides personalized feedback through multiple communication channels, as well as data analysis for managers. In aviation, Signol aims to use behavioral "nudges" and incentives to reduce pollution and fuel waste and cut operating costs.