DUBAI (June 3): Politicians globally are urged to be honest about the costs required to achieve net zero emissions — a common reference to offsetting greenhouse gas emissions from human activities — particularly in the aviation industry, where energy transition is set to result in higher airfares for consumers.
International Air Transport Association (IATA) director general Willie Walsh said sustainable aviation fuel (SAF) is at least three times more expensive than conventional jet kerosene, and mandating airlines adopt SAF to replace a portion of fuel consumption is going to increase costs, which will ultimately be passed on to consumers.
“This is where I think politicians need to be honest. I think politicians who talk about increasing taxes or increasing requirements for an accelerated transition to net zero try to present that as coming at no cost,” he told reporters here after the association’s 80th annual general meeting (AGM).
“The transition to net zero for every industry is going to be challenging, but particularly so for aviation, given the fact that we don't have any easy options available to us.
“[Achieving net zero] is something that everybody wants to do, but we will have to recognise that those costs can't be ignored, and airlines will have to continue to do everything they can to minimise that. But I think ultimately, ticket prices, as we've seen with the massive inflation, may well increase,” he added.
Walsh said it is “unrealistic” to expect airlines to absorb all the costs required for energy transition, as these businesses require sustainable financial models over the longer term.
“We need to have a sustainable financial model that allows us to invest in our products and services for the benefit of consumers, and to ensure that we can go on this marathon to achieve net zero in 2050. It is not that we want to put prices up, but I think we have to be honest,” he said.
Nonetheless, Walsh said IATA will still be pushing for wider adoption of SAF going forward and highlighting the need for supportive public policies to raise production.
“We will keep pushing on SAF. Considering that SAF production will equal slightly more than 0.5% of our fuel needs this year, achieving a 5% emissions reduction through SAF by 2030, a target agreed upon by ICAO (International Civil Aviation Organization), is very ambitious,” he said.
“Having agreed that target — and please, it is important to remember that it is a government target, not ours (IATA) — we therefore expect governments to help make it possible.
“To be blunt, governments must deliver concrete measures to facilitate the exponential ramp-up of SAF they are calling for while not forgetting all the other decarbonisation measures that are needed,” he added.
Grievances towards governments’ ambitious net zero mandate
IATA's AGM this year was not short of grievances towards governments globally setting ambitious net zero targets without considering the feasibility of achieving the targets.
Emirates president Tim Clark opined that governments around the world should recognise the challenges in sourcing SAF and formulate policies to address the challenges.
“We have situations in some countries where a (net zero) mandate comes along and they [governments] say: ‘You must do this, and you must produce 5%, 10%, whatever it is, by 2030 or whatever.’ When the governments are asked: ‘How do you propose doing this?’, they say: ‘That's not my problem, that's your problem.’
“And the supplier says: ‘Well, I can't do it, so I will have to import it.’ But the same import requirement is being requested by many other countries to do the same thing. So, then you get an auction, and then the hedgers get involved, you get arbitrage on SAF, it becomes totally out of control if you're not careful,” he said.
“Our main goal is to try and get the amount of SAF into the aviation industry at the levels that everybody wants, and that's not an easy task. It's always been played around with. At the moment, it is becoming a political football. It [should] not ... we need to have a rational, grown-up discussion about the realities of what we are trying to do here,” he added.