The EU pushes the decarbonisation of the aviation sector

The planes are the most polluting means of transport and it is no surprise that theEuropean Union has taken action to run for cover. Inside the climate package Fit for 55which aims to reduce emissions by at least 55% by 2030 (compared to 1990), among the measures envisaged there is also that of imposing on sectors that emit carbon dioxide, such asaviationOf pay more for their pollutionwith the aim of accelerating the adoption of technologies and initiatives that reduce emissions.

A legislation that, in the next few years, should mainly affect European companies compared to their international competitors. This is what emerges from a S&P Global Ratings report on the decarbonisation of the aviation sector in Europe which highlights how the strongest carriers in the region should be able to pass on most of the costs to travellers. While the situation could put the credit quality of weaker European airlines under pressure.

From bio-fuels to fleet renewal

According to theEuropean Environment Agency, the aviation sector is responsible for around 2.5% of global CO2 emissions and 3.8% of emissions in the EU. Without a decisive change of course, according to the agency, carbon emissions from commercial flights could triple by 2050. Furthermore, over the last twenty years the emissions produced by the aviation system have grown by almost 130% and, continuing on this path, in 2050 they will increase from seven to ten times more than in 1990, reaching 16% of global CO2 emissions. Date by which the ambition is instead to decarbonise the aviation sector by leveraging various areas.

These primarily include the replacement of fossil fuels with other sustainable, the so-called Saf (sustainable aviation fuel), which in the short to medium term represent the most concrete and immediate solution for the decarbonisation of aviation. According to projections, these fuels will make it possible to halve the polluting emissions produced by aircraft by 2050. This is bio-fuels that can be blended safely with kerosene and that, over their lifetime, emit up to 80% less carbon than traditional kerosene. One Bain & Company study however, it also highlights the costs of this solution. For example, an investment of 1,300 billion dollars for the production of sustainable fuel could satisfy only 20% of the expected demand by 2050. Hence the need, underlines the study, to also go through the fleet renewal, considering that older models are significantly more polluting than recent ones. This means investing in research, development and innovative technologies to have more fuel efficient aircraft.

Looking to the future, a central role for analysts will in particular be covered byelectric, an area in which the aviation sector could also benefit from the progress made in terms of batteries in the automotive sector. The theme is now increasingly under the spotlight, so much so that it has prompted industrial players, institutional stakeholders and associations to enter into a pact for the decarbonisation of air transport which identifies some interventions on which to leverage to promote the growing sustainability of the sector. Among these, the proceeds deriving from purpose fees already present should be redirected to support the sustainability investments of the sector. Furthermore, the diffusion of bio-fuels should be facilitated, allowing for the progressive replacement of the use of traditional fuels. Finally, it is necessary to support the development of alternative energy vectors for aircraft propulsion in the medium term (hydrogen and electric).