Aviation generates 2-3% of global CO₂ emissions and, if business continues as usual, is on course to produce double these emissions by 2037 when IATA predicts 8.2 billion annual air travellers. As a result, the industry is under increasing pressure to reduce its contribution to global warming and decarbonise operations in a bid to offset passenger growth. Sustainability and aviation's impact on the environment are significant issues facing the industry over the coming years, subjects which will be at the forefront of investment and business opportunities. This report explores the substantial achievements the aviation industry has made in technology, infrastructure and governance with the aim of giving a snapshot of the future challenges and solutions we collectively face as an industry.
Among the many tests aviation faces, the most challenging is to future-proof the industry against a variety of ecological changes such as temperature and sea level increases, significant weather events and shifts in weather patterns. In this section, IBA identifies implications for the industry and the measures being taken to prepare for them. With more stringent environmental regulations and market-based measures being imposed on aviation such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the European Union Emissions Trading Scheme (EU ETS), we look at these regulatory challenges and consider the robustness of current market-based measures. Environmental, social and governance (ESG) ratings are set to be a focal point for future investments; what are operators and lessors doing to secure access to capital? IBA discusses green financing and how lessors and operators can use the green loans principles to finance future projects and assets.
The current crop of aircraft has made extreme leaps in terms of safety and efficiency when compared with those at the start of the jet age. There is an intrinsic link between reduced operational costs and newer, more efficient and reliable aircraft; IBA identifies the key technologies in today's aircraft and explores the future landscape of low carbon commercial aircraft.
Sustainable Aviation Fuels (SAF) are set to be key contributors towards a reduction in greenhouse gases (GHGs) but the infrastructure is not expected to be able to keep up with the level of demand the aviation industry will generate. Aviation is getting little investment from governmental bodies to develop such fuels. Therefore, airlines are investing heavily in SAF in order to secure access to low carbon fuels and ensure there are adequate volumes available to the industry.
This initial report aims to compile the various challenges, changes in legislation and discuss the current and future technologies within the aviation industry to help better understand the dynamic landscape of aviation and the environment. Subsequent reports will detail the potential effects on how current and future legislative developments may influence the useful economic life of aircraft, residual values and lease rates as well as providing updates to the various initiatives in this fast changing area of interest.
Click the link below to download a copy of our Aviation and the environment report.
Click the link below to listen to our recent Aviation and the Environment Podcast.
If you have further questions, comments or feedback please contact us using the link below.
This podcast explores the substantial achievements the aviation industry has made in technology, infrastructure and governance with the aim of giving a snapshot of the future challenges and solutions we collectively face as an industry. If you have any further questions, comments or feedback please contact Tim Boon.