Climate change sceptics and clean fuel shortage risk airline industry's decarbonisation target
The airline industry's central sustainability goal of net zero emissions by 2050 is at risk from the policies of climate change sceptics, such as US President Donald Trump.
The rise of world leaders who support fossil fuels over renewable energy development and the scaling back of environmental regulations are 'obviously a setback', Marie Owens Thomsen, Iata's senior vice president of sustainability and chief economist, said. 'It does imperil success on the 2050 horizon,' she said.
'But I don't think it's going to reverse or halt progress, it will just slow progress. Now that's bad enough ... the 2050 deadline is coming furiously fast.'
During its annual meeting in New Delhi last week the International Air Transport Association (Iata) nevertheless remained committed to the 2050 target date, despite airing escalating concerns about the cost, availability and insufficient government incentives for the production of sustainable aviation fuels (SAF).
This is not where we should be in 2025 ... there is no time for delay and no tolerance for government greenwashing and unnecessary cost increases
Willie Walsh,
director general, Iata
Iata member airlines agreed in 2021 to target net zero emissions in 2050 based mainly on a gradual switch to SAF, which is made from waste oil and biomass. The aviation industry accounts for 2.5 per cent of global carbon dioxide emissions, according to the International Energy Agency. But it has come under increasing pressure from environmentalists to curb its carbon footprint amid booming air travel demand.
While the amount of SAF produced will double to two million tonnes in 2025, that represents only 0.7 per cent of airlines' jet fuel demand, according to Iata's latest data. The average cost of SAF in 2024 was 3.1 times that of jet fuel, for a total additional cost of $1.6 billion, according to Iata estimates. In 2025, the global average cost for SAF is expected to be 4.2 times that of jet fuel.
'Another problem, which is related, is that oil is so cheap,' Ms Thomsen said. 'I think that also diminishes the sense of urgency that people have.'
Oil prices will need to trade above $80 a barrel, or even above $100 a barrel, before there is pressure to create new energy markets, she said. Brent, the benchmark for two thirds of the world's crude, was trading around $66 a barrel on Sunday. Lower oil prices come amid Mr Trump's tariffs scheme, his calls to " drill baby drill" and a decision by Opec to hike crude output quotas.
Iata estimates the cost of achieving net zero carbon emissions by 2050 to be an enormous $4.7 trillion, or $174 billion a year. However, ramping up the production of SAF is 'entirely achievable' as there is sufficient feedstock and the technology is available to get started, Ms Thomsen said.
The required SAF investments are comparable to the money governments had poured into developing previous new energy markets such as wind and solar, she said, adding that the funding can also be found by scrapping subsidies to the world's major oil producing companies.
'The world is subsidising large oil companies to the height of $1 trillion per year. With that money, if it were redirected in its totality, we could solve our energy transition in less than five years,' she said. 'The thing that is really missing is the courage and willingness to take on vested interests.'
Sounding the alarm
SAF production needs an 'exponential expansion' to meet the demands of the airline industry's commitment to net zero carbon emissions by 2050, said Iata, which represents some 350 airlines, comprising more than 80 per cent of global air traffic. Airlines cannot achieve the target by themselves and require more urgent action from governments, manufacturers, airport operators and fuel suppliers, Willie Walsh, Iata's director general, said.
'These actions must be accompanied by ringing the alarm bells on SAF production,' he said at the Iata meeting in India. Iata's decarbonisation roadmap estimates that SAF will provide 65 per cent of the carbon mitigation needed in 2050.
'This is not where we should be in 2025. We have a quarter-century to get to net zero. There is no time for delay and no tolerance for government greenwashing and unnecessary cost increases,' Mr Walsh said.
Top priorities
In April Mr Walsh had warned that industry efforts to achieve net zero by 2050 were 'off track', but he said last week that any alteration of the target was no discussed at the airlines' meeting in New Delhi.
'The industry is still obviously targeting net zero in 2050 ... we are concerned about the pace of progress,' he said. The value chain that needs to support airlines' transition to net zero is not making sufficient progress, and 'that's the reason we're calling it out', he added.
Poorly co-ordinated government actions are leading to SAF mandates in different countries that have done little to stimulate production but have instead led to additional costs to the airlines without environmental benefits, he said.
The Iata boss said there was a narrow window for the industry to meet its goals. 'It is a wake up-call. We still have time to get there, but we do need to see more action on the part of all the partners in the value chain to make sure the industry can get there,' he said.
As of 2025, some 81 airlines had signed 170 SAF offtake agreements, signalling to producers that there is strong demand for the green fuel, according to Iata. Many airlines are unable to procure SAF without having to ship it over long distances, which defeats the purpose of reducing emissions, Mr Walsh said.
'Waning enthusiasm'
Four years after global carriers committed to net zero by 2050, the Iata meeting marked escalating worry among airline chiefs about tackling climate concerns.
'There's a level of scepticism and perhaps even you could say waning enthusiasm for the overall energy transition,' Patrick Healy, group chair at Cathay Pacific, said during a panel on financing net zero target. 'Everyone's realising it's a lot more complicated than we thought a few years ago ... but it's not a problem we can turn our backs on.'
Iata forecasts higher profits for airlines in 2025, with a drop in revenue offset by falling prices for traditional jet fuel. Rob McLeod, head of energy risk solutions at Hartree Partners, called on airlines to use the savings from fuel costs to invest more in SAF to help fund the energy transition.
'Lower fossil fuel prices effectively make renewables seem more expensive, but to flip it on its head: all the airlines in the room are saving so much money on their fossil jet [fuel], you've maybe got a bit more in your budget to invest more in SAF,' he told a panel about the energy transition.
Iata also criticised plane manufacturers that have failed to deliver new fuel-efficient jets on time, forcing airlines to keep older planes flying for longer.
'Aircraft and engine manufacturers must make good on their promises to bring greater efficiency and carbon-reducing technologies to market fast,' Mr Walsh said. 'By the time we meet next year, we must be able to show more progress.'
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This is not where we should be in 2025 ... there is no time for delay and no tolerance for government greenwashing and unnecessary cost increases Willie Walsh, director general, Iata Iata member airlines agreed in 2021 to target net zero emissions in 2050 based mainly on a gradual switch to SAF, which is made from waste oil and biomass. The aviation industry accounts for 2.5 per cent of global carbon dioxide emissions, according to the International Energy Agency. But it has come under increasing pressure from environmentalists to curb its carbon footprint amid booming air travel demand. While the amount of SAF produced will double to two million tonnes in 2025, that represents only 0.7 per cent of airlines' jet fuel demand, according to Iata's latest data. The average cost of SAF in 2024 was 3.1 times that of jet fuel, for a total additional cost of $1.6 billion, according to Iata estimates. In 2025, the global average cost for SAF is expected to be 4.2 times that of jet fuel. 'Another problem, which is related, is that oil is so cheap,' Ms Thomsen said. 'I think that also diminishes the sense of urgency that people have.' Oil prices will need to trade above $80 a barrel, or even above $100 a barrel, before there is pressure to create new energy markets, she said. Brent, the benchmark for two thirds of the world's crude, was trading around $66 a barrel on Sunday. Lower oil prices come amid Mr Trump's tariffs scheme, his calls to " drill baby drill" and a decision by Opec to hike crude output quotas. Iata estimates the cost of achieving net zero carbon emissions by 2050 to be an enormous $4.7 trillion, or $174 billion a year. However, ramping up the production of SAF is 'entirely achievable' as there is sufficient feedstock and the technology is available to get started, Ms Thomsen said. The required SAF investments are comparable to the money governments had poured into developing previous new energy markets such as wind and solar, she said, adding that the funding can also be found by scrapping subsidies to the world's major oil producing companies. 'The world is subsidising large oil companies to the height of $1 trillion per year. With that money, if it were redirected in its totality, we could solve our energy transition in less than five years,' she said. 'The thing that is really missing is the courage and willingness to take on vested interests.' Sounding the alarm SAF production needs an 'exponential expansion' to meet the demands of the airline industry's commitment to net zero carbon emissions by 2050, said Iata, which represents some 350 airlines, comprising more than 80 per cent of global air traffic. 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The value chain that needs to support airlines' transition to net zero is not making sufficient progress, and 'that's the reason we're calling it out', he added. Poorly co-ordinated government actions are leading to SAF mandates in different countries that have done little to stimulate production but have instead led to additional costs to the airlines without environmental benefits, he said. The Iata boss said there was a narrow window for the industry to meet its goals. 'It is a wake up-call. We still have time to get there, but we do need to see more action on the part of all the partners in the value chain to make sure the industry can get there,' he said. As of 2025, some 81 airlines had signed 170 SAF offtake agreements, signalling to producers that there is strong demand for the green fuel, according to Iata. Many airlines are unable to procure SAF without having to ship it over long distances, which defeats the purpose of reducing emissions, Mr Walsh said. 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