{"id":4223,"date":"2023-04-14T15:53:53","date_gmt":"2023-04-14T14:53:53","guid":{"rendered":"https:\/\/www.greenairnews.com\/?p=4223"},"modified":"2023-07-07T09:51:52","modified_gmt":"2023-07-07T08:51:52","slug":"industry-faces-additional-e820-billion-cost-to-decarbonise-european-aviation-in-line-with-net-zero-by-2050","status":"publish","type":"post","link":"https:\/\/www.greenairnews.com\/?p=4223","title":{"rendered":"Industry faces additional \u20ac820 billion cost to decarbonise European aviation in line with net zero by 2050"},"content":{"rendered":"\n

To achieve the European aviation sector\u2019s ambition of achieving net zero emissions by 2050, additional expenditures amounting to \u20ac820 billion ($900bn) are required between 2018 and 2050, finds a study commissioned by five industry associations. These additional or \u2018premium\u2019 costs, mostly to be spent on alternative fuels, are on top of business-as-usual (BAU) expenditures, such as fleet renewal, which are required for the net zero transition. BAU expenditures over the 2018-2050 period are estimated at \u20ac1,068 billion, bringing the total expenditures towards reaching net zero at just under \u20ac1.9 trillion. The report just published, \u2018The price of net zero<\/a>\u2019, determines financing in-sector sustainability measures yields substantially lower costs than realising the same emission savings through out-of-sector carbon reductions. The study follows up the industry\u2019s Destination 2050 roadmap<\/a> published in 2021.<\/strong><\/p>\n\n\n\n

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The five Destination 2050 partners \u2013 A4E (airlines), ACI Europe (airports), ASD Europe (aerospace manufacturers) CANSO (air navigation service providers) and ERA (regional airlines) \u2013 commissioned consultancies SEO Amsterdam Economics<\/a> and the Royal Netherlands Aerospace Centre<\/a> to calculate the expenditures necessary to achieve the targets set out in the roadmap and accelerate European aviation\u2019s decarbonisation.<\/p>\n\n\n\n

\u201cAlthough challenging to do an accurate assessment of the price of reaching net zero for the European aviation sector, we have commissioned this scientific study to establish a better understanding,\u201d said the partners. \u201cWe are firmly committed to a climate neutral European aviation in line with the EU climate goals and the Paris Agreement targets. Therefore, decarbonisation is at the heart of our business.\u201d<\/p>\n\n\n\n

Of the \u20ac1.9 trillion, fleet renewal is found by the study to be the largest expenditure (43%) of which the BAU scenario represents over 90% and premium expenditure (the additional expenditures to be made above BAU) of around 10% (\u20ac740 billion and \u20ac80 billion respectively). However, the significant investment would result in a \u20ac188 billion saving in fuel costs and a further \u20ac78 billion saving in carbon pricing.<\/p>\n\n\n\n

Expenditure on alternative fuels, which includes drop-in sustainable aviation fuels, hydrogen and renewable electricity, is the second largest expenditure (40%), with premium expenditures representing nearly 59% and BAU just over 41% of the costs (\u20ac441 billion and \u20ac310 billion respectively).<\/p>\n\n\n\n

Other premium expenditures are required for air traffic management (\u20ac20 billion), ground operations (\u20ac9 billion), R&D in future aircraft (\u20ac100 billion), airport infrastructure adaptation (\u20ac18 billion) and carbon pricing and economic measures (\u20ac152 billion).<\/p>\n\n\n\n

The use of economic measures, including negative emission technologies, accounting for about 19% of the premium expenditure, is required to compensate for all emissions remaining after the application of the in-sector activities. Both the EU Emissions Trading System (EU ETS) and ICAO\u2019s CORSIA scheme are essential to reach net zero, say the partners.<\/p>\n\n\n\n

However, they add: \u201cEconomic measures must be effective and focused on driving the required decarbonisation processes forward through positive incentives attracting in- and out-of-sector capital. On the contrary, taxation and operational restrictions will hamper the industry\u2019s ability to invest and innovate due to a diminished financial capacity and in turn jeopardising the global competitiveness of European aviation.\u201d<\/p>\n\n\n\n

They \u201cstrongly recommend\u201d revenues from the EU ETS be reused within the sector to support and incentivise breakthrough technologies, infrastructure and SAF production.<\/p>\n\n\n\n

The report says financing in-sector sustainability measures yields substantially lower costs than realising the same emission savings through out-of-sector carbon reductions. It compares European airline revenues of an estimated \u20ac145 billion in 2018 with combined average annual expenditures towards net zero of \u20ac59 billion.<\/p>\n\n\n\n

\u201cThe aviation sector\u2019s expenditures towards achieving net zero are substantial and are dependent on access to finance from the private and public sector. This is vital when capital reserves are insufficient to make large upfront payments for new aircraft and infrastructure,\u201d said the partners.<\/p>\n\n\n\n

\u201cOnly with the right set of incentives and policies can the required capital be made available for the sector\u2019s decarbonisation. This means timely and effective measures bringing long-term clarity and predictability for investors. Regulatory frameworks must encourage low carbon technology deployment.\u201d<\/p>\n\n\n\n

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Photo (Fraport AG): Frankfurt Airport<\/strong><\/p>\n\n\n\n

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