Iata flags policy shortcomings, even as more airlines pledge to use greener fuels

Straits Times

2 days ago

An Airbus A350-1000 refuels with Sustainable Aviation Fuel for the flying displays at the Singapore Airshow 2024. ST PHOTO: AZMI ATHNI
Iata flags policy shortcomings, even as more airlines pledge to use greener fuels
– More airlines around the world are committing to using greener jet fuel in a bid to reach their goal of net-zero carbon emissions by 2050.
But there are headwinds, with the global trade body representing the industry flagging policy shortcomings that have hindered the production and adoption of such fuels. These are made mainly from waste materials like used cooking oil, and are said to reduce carbon emissions by up to 80 per cent compared with regular jet fuel.
The International Air Transport Association (Iata) said on June 1 it expects the production of such greener aviation fuels to reach 2 million tonnes in 2025, a dip of 0.1 million tonnes from its earlier projections in December 2024.
While this is double the 1 million tonnes of greener jet fuel produced in 2024, the 2025 figure forms just 0.7 per cent of airlines' projected total fuel consumption this year, Iata noted.
According to the association, 81 airlines have inked agreements to buy and use greener jet fuel, up from 70 in 2023, and this number is growing steadily.
Singapore Airlines and its low-cost arm, Scoot, are among those that have pledged to increase sustainable fuel use.
'The problem is not the (airline) industry. The problem is the energy source,' said Dr Marie Owens Thomsen, Iata's senior vice-president for sustainability and chief economist.
Speaking to reporters on the first day of Iata's three-day annual general meeting in New Delhi, she called for government policies that maximise the production of renewable energy in all forms.
Dr Thomsen also called on governments to redirect some of the subsidies given to fossil-fuel companies to those producing renewable energy, including sustainable jet fuel. These subsidies amount to US$1 trillion (S$1.3 trillion) a year globally.
Unless policies and behaviours change, she said the aviation sector will not meet its 2050 net-zero emissions target.
'It's not impossible. It's just that at the pace, with the investments and with the policies currently, it is a resounding no,' she noted on the sidelines.
She flagged other urgent priorities for governments around the world, including the need for policies to adapt and fix unintended consequences.
Iata on June 1 highlighted the sustainable jet fuel mandates rolled out in Europe and Britain. They require suppliers to add a proportion of sustainable aviation fuel into the jet fuel they deliver to airports – starting with a 2 per cent blend in 2025.
But the cost of greener jet fuel – which is already two to three times more expensive than regular fuel – has doubled as suppliers have passed on added compliance costs to airlines, Iata said.
The expected cost of green fuel needed to meet the mandates is US$1.2 billion at today's market prices, and the compliance fees have added another US$1.7 billion to airlines' jet fuel bills, it added.
Said Dr Thomsen: 'We want to shout about it, loud and clear to everybody, so that other countries that might be thinking of mandates will think again.'
In contrast, she added that she found Singapore's approach to driving greener jet fuel adoption to be 'innovative'.
The Singapore Government will require flights departing from the city-state to use sustainable jet fuel, with an initial national target of 1 per cent use in 2026, and passengers will be charged a levy to help finance the cost.
Early government estimates in 2024 suggest that economy-class passengers may have to pay $3 more for short-haul flights, $6 more for medium-haul flights, and $16 more for long-haul flights.
This money will go towards the bulk purchase of greener jet fuel that airlines will need to use at Changi and Seletar airports. More details are expected to be announced in 2025, closer to the roll-out in 2026.
Dr Thomsen said raising ticket prices and a central fuel procurement system are not policies that Iata would have suggested.
But she added that there is greater faith that Singapore will reassess its policies and take a different course of action if the Government's plans do not work as intended.
'The interesting and somewhat exciting nature of the market at the moment is nobody knows how to do this. Nobody has the solution,' she said. 'Let's see if this works and what can be done.'
On green jet fuel production, Iata's head of net-zero research and programmes Preeti Jain said there are about 300 projects identified globally, with about 160 of them set to come online by 2030.
In Asia-Pacific, there are 28 such projects with a projected capacity of 7 million tonnes.
But whether these projects can be realised is a question, with Ms Jain noting delays and slow progress despite the abundance of raw materials in the region.
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