Airlines Commit to 2050 Net Zero Goal, But Warn Fliers Face Higher Fares
Airlines may be sticking to their net zero goal, but they are now signalling that passengers may have to help foot the bill.
The airline industry is sticking to its target of reaching net zero emissions by 2050, despite growing concerns over the slow ramp-up of green aviation fuels.
The International Air Transport Association (IATA), which represents more than 350 airlines globally, reaffirmed its climate goal at the close of its two-day annual summit in New Delhi on Tuesday.
'There had been no talk of any delay to the target,' IATA director Willie Walsh said in a press conference, according to Reuters. He added that the goal remains both realistic and necessary.
The target had come under scrutiny amid fears it might be delayed due to the lack of available low-emissions fuel.
'There is great concern that we're not making sufficient progress, not as airlines, but as the value chain that needs to support the airlines transitioning to net zero,' Walsh said.
'We still have time to get there, but we do need to see more action from all of the partners in the value chain.'
Fuel Producers Not Playing Their Part
Walsh called out oil majors and fuel producers for scaling back their investment in sustainable aviation fuel (SAF), the sector's preferred alternative to fossil-based jet fuel.
The sector says SAF can reduce emissions by around 60%, but it currently accounts for less than 1% of global jet fuel use.
'We have made clear from the very beginning that the airline industry will not be able to achieve net zero in 2050 unless everybody in the wider value chain supports the industry in doing that,' Walsh said. 'I think it is a wakeup call.'
While industry profits have rebounded since the pandemic, IATA warned that the cost of meeting net zero could reach as much as $4.7 trillion.
Climate Costs Could Mean Higher Air Fares
Reuters reported that IATA said some of that cost will likely be passed on to travelers through higher fares. Walsh and IATA have previously spoken about the risk of higher fares.
"Going forward as we see increases in carbon costs, there has to be an impact on ticket prices as the industry transitions to net zero. The airlines cannot absorb increased costs," Walsh previously said.
In a new report, IATA estimated that the average cost of SAF in 2024 was 3.1 times that of conventional jet fuel. It said that in 2025, it is projected to be 4.2 times that of jet fuel.
Lufthansa has already introduced an environmental surcharge on all tickets from most European countries. The amount of the surcharge varies between $1 and $78, depending on the flight route.
"This is due to steadily rising additional costs due to regulatory environmental requirements," the airline said in a statement. "These include the statutory blending quota of initially 2% for SAF for departures from European Union."
IATA is expected to release further guidance on SAF deployment and financing later this year.
Fuels Europe, which represents companies like BP and Shell, have rejected the aviation industry's claims.
'We reject claims from the aviation sector suggesting a lack of sustainable aviation fuel supply,' the group previously told Skift. 'Our members are on track to meet their current mandate and exceed 2030 targets. Despite policy and investment challenges, European fuel producers have rapidly scaled SAF output and lowered costs.'
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