Airlines ‘set for carbon credit crunch by 2030’

Image: Emirates

So claims carbon market solutions provider Abatable, which has warned that, after a “turbulent start” to the aviation sector’s global carbon offsetting programme, a supply-side crunch in carbon credits is now looming on the horizon.

The International Civil Aviation Organisation (ICAO) requires airlines to mitigate most of the growth in their emissions beyond a 2019 baseline with eligible carbon credits. The requirement is a key facet of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

CORSIA compliance will be mandatory for all airlines from 2027, following pilots from 2021 to 2023 and an ongoing voluntary adoption phase.

While Abatable foresees that many airlines will seek to limit the level of offsets they need to buy by improving efficiency and shifting to new technologies, most will not be mature commercially by 2027, including large hydrogen and electric passenger planes or high-proportion blends of alternative fuels.

Moreover, passenger numbers are set to grow in the coming years.

Abatable believes that the demand for CORSIA-eligible products will begin to significantly outstrip supply by the end of the decade. Demand is forecast to be between seven and 14 times greater than supply, depending on the actions airlines take to cut emissions and the level of growth in eligible offsetting projects.

But the analysis comes with a warning that airlines are responding “slowly” to this forthcoming challenge. Moreover, the ICAO has been loath to expand its eligibility criteria due to fears over credibility in the carbon market. It is set to announce its decision on any changes this September.

A 2050 net-zero goal was set by the ICAO in 2022 but it is ‘aspirational’ rather than binding. Critics have called on the organisation, and on national governments, to draw up more credible plans to limit growth in line with the recommendations of climate experts, given the challenges in bringing technological solutions to the market.

SAF uptake

In related news, Emirates has taken its first delivery of sustainable aviation fuel (SAF) at London Heathrow Airport, to be used in blends on its flights from the airport until the end of summer.

The 3,000-tonne agreement with Shell Aviation marks the airline’s largest SAF purchase to date.

The SAF that Emirates has purchased from Shell Aviation will be safely dropped into existing airport fuelling infrastructure and aircraft jet engines. Emirates has not publicly announced the proportion of the blends it will use, but international regulation caps the maximum at 50%, Most airlines use far lower proportions.

Since 2022, Heathrow has covered half of the price premium gap between conventional jet fuel and SAF or airlines.

Emirates’ chief operations officer Adel Al Redha said this initiative “will support the SAF market’s increasing momentum, allowing airlines like Emirates to take advantage of its availability and make it more commercially viable.”

Heathrow expects airlines to use up to 155,000 tonnes of SAF at the airport this year, with its scheme buoying interest.

The UK’s Jet-Zero Council, an industry group convening policymakers and businesses, recently surveyed 2,000 adults and found that almost all of them would be willing to pay more for their airline ticket to support SAF adoption. On average, they would be prepared to add 26% to their ticket cost.

The chair of the Council’s SAF Delivery Group, Jonathon Counsell, said: “Although work is ongoing to reduce the cost of SAF, the fact that the general public would be willing to pay more to use SAF is a really strong indicator of the enthusiasm.

“Zero-emissions flights, using batteries and hydrogen, are a few years away yet, but SAF is already in use, diverting waste streams and turning them into an alternative jet fuel that lowers the carbon emissions of flights is a critical step in cleaning up the environmental impact of flying.”

The Council has advocated strongly for a sector-wide emissions reduction pathway that hinges heavily on SAF and efficiency improvements. It is staunchly opposed to cutting demand and has taken a longer-term view towards electrification and hydrogen. This is a much-contested approach.

The UK Government has mandated that 2% of the jet fuel supplied in the UK must be SAF in 2025, rising to 10% in 2030 and 22% in 2040. Analysis from Carbon Brief has concluded that any emissions benefit from this SAF mandate would be cancelled out by rising demand for flights.

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