Sustainable Air transport and Planning: ESG and Aviation

When it comes to Sustainable airline fuel (SAF) is made from sustainable resources rather than petroleum. It is a "drop-in fuel" that must be blended with fossil (petroleum-based) jet fuel (FJF) but without the need for post-production infrastructure or changes in equipment in most cases, up to a maximum of 50 percent of the "dropped-in" fuel can be SAF.

ICAO expects that the three pillars of sustainability – social, economic, and environmental must work hand in hand to allow air transport to grow in an environmentally sustainable manner while continuing to ensure freedom to travel by air. Unfortunately, one of the myths about air transport is that if the prices were to increase that would in some ways dissuade passengers from travelling and this would indirectly promote sustainability. This is in fact untrue. For business class passengers the growing costs may not be palatable but is a necessity nonetheless, defeating the whole purpose.

Airlines, in general, have always worked to improve their energy efficiency in a bid to control costs – newer more efficient aircraft use less fuel and require less maintenance. Although airlines will continue to improve that energy efficiency, controlling operational efficiency is out of their control.

The sector is pressed to meet its environmental commitments through its own resources. Aviation’s role in the climate change debate has transformed significantly over the past few years. The COVID-19 pandemic grounded flights and halted air travel, reversing the ‘runway’ growth that the industry had been enjoying since the advent of air travel. 

While environmental issues got comfortably dismissed in the interim given that far more serious threats to business continuity and survival were to be dealt with, the lengthy interruption later provided a perfect opportunity for the world to embark on a “build back better” program with embedded sustainability goals for a renewed global economy. Airlines have bought into the net-zero pledge, which culminated in the IATA AGM resolution for the global air transport industry aligning with the Paris Agreement goal for global warming and net-zero carbon emissions.

While achieving net-zero emissions is an enormous challenge for any carbon-emitting industry, the aviation industry requires progressively reducing its emissions while accommodating more flyers. Many airlines have pledged to become net zero in line with the IATA resolutions efforts to transition to the use of more sustainable aviation fuel (SAF) and carbon offsets are underway.

Currently, the aviation sector is pursuing its aims of improving energy efficiency, using sustainable aviation fuel, developing alternative technologies, and utilizing carbon offsets. 

Jan Melgaard, executive chairman of FPG Amentum, strenuously defends the ambitious targets set by the industry. “We need to get to net-zero by 2050; it’s basically our industry’s license to operate.”

Although aviation is a small contributor to overall emissions, the industry is large and growing, and very visible. The real fear is that if the aviation industry doesn’t take a lead in reducing its emissions, governments will.

The greening of the financial system has already begun with many banks having ESG policies in place when considering investments “green finance” is split into two types of products: use of proceeds instruments, such as green bonds and loans, and sustainability-linked instruments, which can be bonds or loans.

Green bonds are being allocated for green projects, such as renewable energy and energy efficiency projects, which aid decarbonisation.

Sustainability-linked loans or bonds are linked directly to the overall performance of the company on specific ESG performance indicators. So while the aviation industry is enabling itself to get back on track on the economic front, this time it is with a renewed understanding to make a difference to the planet for the better.