GreenAir Newsletter 30 March 2020 on GreenAir Online

GREENAIR NEWSLETTER 30 MARCH 2020

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Efforts to link US airline rescue package to carbon targets resisted as industry faces unprecedented times

Mon 30 Mar 2020 – Attempts have failed to link the future carbon emissions performance of US airlines to the rescue package aimed at helping the beleaguered sector through the coronavirus crisis. Congress voted last Friday to provide the US aviation industry around $60 billion in grants and potential loans as part of the total $2.2 trillion package. House Democrats proposed airlines receiving aid would have to start offsetting their carbon emissions in 2025 and reduce overall emissions by 50% by 2050 but this was rejected by the Senate. In its latest assessment of the impact of the global pandemic on the airline industry, IATA is expecting a 38% fall in global passenger traffic (RPKs) in 2020, with North America the least affected region (-27%) and Europe (-46%) the most. Concerns have been expressed over the calculation of the CORSIA baseline in which airlines will have to offset CO2 emissions above the 2019/20 average.

Before the House Democrats had proposed their bill on the financial assistance package, eight Senate Democrats had requested requirements to ensure any financial assistance for major airlines and foreign-flagged cruise lines “includes reasonable environmental requirements to address pollution…”.

In a letter to congressional leaders, the eight senators wrote: “Given the large carbon footprint of commercial aviation, requiring reductions in carbon emissions would represent a major step in curbing our nation’s greenhouse gas emissions. If we give the airline and cruise industries assistance without requiring them to be better environmental stewards, we would miss a major opportunity to combat climate change and ocean dumping.”

The request to link aid to carbon emissions reductions did not meet with approval and the bill passed unopposed in the Senate. As well as the aid to airlines and their staff, the package provides for $3 billion in payroll grants to airline contractors and $10 billion to airports in grant funding. It does not, however, provide aid to the cruise line sector.

Washington, DC-based environment group Environmental Defense Fund (EDF) was disappointed with the outcome.

“Unfortunately, big businesses and their defenders in Congress defeated an effort to invest in a cleaner, safer world by reducing pollution from airlines,” said EDF Senior Vice President, Elizabeth Gore. “If there’s a bright spot, it’s that while the requirements to reduce climate pollution ultimately did not make it into the bill, they were a top priority of leading members of Congress. That is a testament to the growing chorus of concerned citizens and voters who have made clear that the climate crisis must be a top priority for our government.”

In Europe, the hardest hit of all regions, airlines are already looking at a $76 billion loss in passenger revenues this year. In addition to financial help, they are asking the EU institutions and governments for flexibility on passenger refunds and also deferment or suspension on all en-route air traffic control charges for the remainder of 2020, as well as on aviation ticket taxes. The sector has already won a temporary waiver on the airport slots 80/20 rule which at the start of the coronavirus crisis, with passenger numbers in steep decline, had led to ‘ghost flights’.

“We applaud EU Member States and the European Parliament for their swift action, which will help European aviation to better cope with this unprecedented crisis while also avoiding unnecessary CO2 emissions,” commented Thomas Reynaert, Managing Director of Airlines for Europe on the slots decision.

By tomorrow (March 31), European airlines must report their 2019 CO2 emissions under the EU Emissions Trading System (EU ETS) and then surrender carbon allowances by April 30. The European Commission has indicated it will not delay the deadlines because of the crisis, despite calls for leniency.

According to NGO Carbon Market Watch, the price of allowances – around €25 per tonne CO2 two weeks ago – has dropped by almost 40% to a near two-year low of just above €15. An auction by ICE Futures Europe of 1,669,000 EU Aviation Allowances on behalf of the UK government on March 25 was cancelled as airlines pulled back from bidding. ICE said there were not enough bids to cover the supply being offered.

Global consumption of jet fuel averages around 7 million barrels per day and oil industry analysts have suggested demand may have now fallen by up to 50%. A report published a week ago by Rystad Energy said consumption would fall by 3 million barrels per day, with an overall 20% of demand removed for the year. Its forecast is based on an assumption the peak of the Covid-19 impact will be in April and May, with flights gradually resuming from the summer. The price of jet fuel is reported to have fallen to a 20-year low.

IATA’s latest March 24 update of its analysis of the impact of the coronavirus on the global air transport industry shows a significant deterioration from a previous forecast two weeks earlier, with passenger revenue losses double the previous estimate. The airline body is now expecting passenger revenues to be $252 billion less than in 2019, a fall of 44%. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year.

What effect this may have on the industry’s carbon emissions this year has yet to be calculated by IATA. In a pre-crisis fact sheet issued last December, it estimated global CO2 emissions of 915 million tonnes (Mt) from the sector in 2019, with a forecasted 936 Mt in 2020. According to George Anjaparidze, CEO of Swiss economics and strategy consultancy Veritas Global, if IATA’s anticipated 38% fall in passenger demand was applied to emissions, then global CO2 from commercial air transport could fall to around 567 Mt in 2020.

Based on announced airline cancellations as a result of the pandemic, Dan Rutherford of ICCT estimates overall airline traffic (RTKs) reductions of 53% over the next two months, possibly as high as 75%, with a corresponding reduction in emissions. He points out though that historically passenger numbers bounce back quicker than expected. IATA’s update concurs that all previous pandemics had sharp drops in passenger traffic (RPKs) but equally sharp returns to previous levels (V-shaped) as they were not accompanied by recessions, although this may not be the case with Covid-19.

Whatever the precise eventual outcome, aviation emissions in 2020 are going to be considerably down on 2019 and historically anomalous. This will potentially have a serious impact on the global CORSIA carbon offsetting scheme, which is designed to ensure carbon-neutral growth of the sector from 2021. Airlines and other large civil aircraft operators are currently monitoring and reporting emissions from their international flights to establish a baseline that will be used for the duration of the planned 15-year life of CORSIA. The baseline is calculated on the average emissions for 2019 and 2020, so the expected steep decline in emissions this year will result in an artificially low baseline and require operators to buy more carbon offsets than previously anticipated. IATA has previously estimated airlines could be required to spend up to $40 billion in carbon credits between 2021 and 2035.

A Bloomberg report suggests airlines and countries, including China, have already raised the issue. The article quotes an unnamed US FAA official who said changes to the baseline are “highly likely” once the situation had been reviewed post-crisis but the roll-out of CORSIA would continue without disruption. The CORSIA agreement reached at ICAO allows for triennial reviews of the scheme, the first in 2022 before ICAO’s next Assembly later that year.

As of the end of February, ICAO lists 82 countries, representing 76.64% of international aviation activity, that have indicated they intend to take part in the initial pilot phase of CORSIA, which runs from 2021 to 2023. So far, this excludes China, India, Russia and Brazil.

Environmental Defense Fund notes the CORSIA agreement includes a provision that gives airlines flexibility to deal with the Covid-19 crisis during the pilot phase without sacrificing climate protection.

“As they move forward to implement CORSIA, ICAO governments may wish to consider invoking this flexibility provision, and may wish to convene an expert panel to examine the longer-term impacts of the crisis on CORSIA’s base years,” suggests an analysis by EDF. “The existing rules provide flexibility to governments to address suppressed activity in 2020, without any need to renegotiate the measure in a drawn-out political discussion.”

Commented Michael Gill, Executive Director of the cross-industry Air Transport Action Group: “An average of the two years was agreed in order to smooth any potential downturn in traffic in either year, but a situation as grave as the one we are currently facing was never contemplated. It is much too early to say what the impact of Covid-19 will be on the CORSIA baseline and we will continue to look at how the situation evolves over time. However, any modelling done today will be out of date in a week.

“It is very clear that 2020 is a completely abnormal situation but, in the meantime, we have an industry to rebuild and a world to reconnect.”

ICAO starts second round of applications from carbon programmes seeking CORSIA offsetting approval

Tue 24 Mar 2020 – ICAO has called for applications from carbon programmes for a second round of assessments against the CORSIA emissions unit criteria for approval to supply eligible emission units, or carbon credits, for offsetting compliance by airlines under the global scheme. The UN agency received 14 applications in the first round, with the governing Council approving six programmes this month and two more being invited to re-apply. Applications for the second round must be submitted by 20 April and ICAO will hold a webinar on 3 April for interested programmes needing to understand the process. Publication of applications is expected by the end of May, to be followed by a public comment period and then assessment by ICAO’s Technical Advisory Body (TAB), with the Council deciding on the TAB’s recommendations later in the year.

The report by the TAB to the ICAO Council on its assessment and recommendations on the first round of programmes came with stipulations for each of the six programmes approved, where the body determined certain aspects of the programme did not meet the eligibility criteria in full.

One of those programmes, the Verified Carbon Standard administered by Verra, said most of its project types were CORSIA-eligible and believed pending restrictions that had been placed by ICAO could be resolved quickly to ensure credits from additional project types would have access to the scheme. In accordance with the thrice-yearly process set out by ICAO, Verra said it would be working with the TAB to submit revisions in April for consideration by the time of the Council’s next meeting in June.

Specific restrictions imposed by the TAB that Verra is working to resolve include crediting periods for emission units issued under jurisdictional and nested REDD+ programmes. This, it said, could be addressed by requiring such programmes wanting to sell verified carbon units (VCUs) into CORSIA to commit to a minimum crediting period of 20 years.

Although most VCS project types are eligible, including Agriculture, Forestry and Other Land Use (AFOLU) projects, Verra said it was disappointed that with regard to some AFOLU project types, a number of activities are only eligible in temperate and boreal forests but not in tropical forests.

“We plan to seek more information about why these projects were excluded and subsequently work to address any gaps and then resubmit documentation for these projects, hoping to see them included at the time of the next assessment,” said Verra in a statement.

The not-for-profit organisation said it would create a label that clearly indicated which VCUs are eligible under CORSIA. In order to secure the label, project or programme proponents would need to meet certain requirements including the minimum crediting periods for both jurisdictional and nested REDD+ programmes and projects nested within them; draft requirements for host country attestations in respect of avoiding double counting; and other requirements as they became clearer, for example the need to use a standalone leakage tool.

“We are honoured that ICAO has recognised the VCS Program for compliance with CORSIA,” commented Naomi Swickard, Verra’s Chief Program Officer. “We work hard to make sure our programme delivers high quality emission reductions and removals, and this validation by ICAO is a testament to all that work.”

Winrock International’s non-profit American Carbon Registry, another of the six programmes adopted, said its application had been approved without limitations for all scopes of activities covered by the eligibility timeframe and vintage.

“American Carbon Registry appreciates the Council’s decision based on the rigorous assessment of programmes undertaken by the TAB,” said ACR’s Deputy Director, Mary Grady. “The international aviation sector has made remarkable progress in a short amount of time on establishing a new global framework to reduce emissions and combat climate change. With this important milestone, we are ready to support implementation of CORSIA.”

Meanwhile, due to the coronavirus outbreak, ICAO has postponed its five 2020 CORSIA Regional Seminars until later in the year.

Following Brisbane trial, Gevo secures Australian funding towards sustainable aviation fuel evaluation project

Fri 20 Mar 2020 – Colorado-based renewable jet fuel producer Gevo has secured funding from the Queensland government to support the assessment of a waste-to-biofuel project in the Australian state. The Queensland Waste to Biofutures (W2B) Fund provides targeted funding for pilot, demonstration or commercially scalable biorefinery projects that use conventional waste streams or biomass to produce bioenergy, biofuels and high-value bioproducts. The award follows an initiative Gevo took part in to supply aircraft at Brisbane Airport with blended sustainable aviation fuel (SAF) through the airport’s general fuel supply system. Gevo’s participation in the trial, which completed last year and also involved Virgin Australia and the Queensland government, has led to the state being considered as the location for the company’s first biorefinery outside of the United States.

“Queensland is rich in renewable biomass resources and has expressed the desire to invest in the future of biofuels,” said Patrick Gruber, Gevo’s CEO. “This opportunity opens the door for the development of a project that not only supplies low-carbon gasoline to Queensland, but also the possibility to supply commercial quantities of second generation SAF to Brisbane Airport, expanding upon our demonstrations of SAF supply to commercial airlines like those conducted with Virgin Australia.”

Speaking at the Bio Based Aviation and Marine Fuels Summit, Queensland’s Minister for State Development, Cameron Dick, said: “The Queensland government is excited to be supporting Gevo’s research collaboration with the Queensland University of Technology to turn Queensland sugarcane waste and wood waste into SAF.

“Gevo has recognised that Queensland is the place to be when it comes to the future of biofuels and we look forward to an ongoing partnership which has the potential to bring even more business to Queensland as the demand for biofuels grows. In addition to offering environmental benefits by reducing the carbon footprint of plane travel, this project will also help position Queensland as a world-leading location for investment in the manufacture and distribution of this fuel in the global bioproducts and services market.”

Gevo’s process involves fractionating grain from sustainably produced crops to produce protein and animal feed while using the residual carbohydrate portion of the grain for fermentation to produce isobutanol. This is then chemically transformed using a hydrocarbon processing facility into renewable gasoline, diesel and SAF. As well as substantially reduced greenhouse gas emissions, the company says its SAF has very low sulphur, low particulates and a slightly higher energy density than petroleum-based jet fuel.

Gevo says the Queensland project will evaluate the most likely second generation biomass to carbohydrate conversion process to use in conjunction with its process.

The Queensland W2B Fund provided A$5 million ($2.9m) on an up to 50% co-funding basis in 2019 to support projects in the state.

Since the funding announcement, Gevo has signed a Heads of Agreement with energy company and Shell fuels supplier Viva Energy Australia. They will work together to establish the technical and commercial feasibility of converting regionally-sourced biomass into renewable carbons, including SAF.

“Viva Energy is a key player in the Australian energy industry, with a refinery, more than 20 import terminals and supplies more than 1,260 service stations across the country,” said Gruber. “Through their terminals in Brisbane and as the JV operator of the Brisbane Airport hydrant system, we have worked with them on several occasions to supply SAF to Queensland-based flights.

“We are now advancing beyond just talk and demonstration of SAF, such that this agreement and collaborative partnership will not only strengthen our development efforts in Queensland but will also go a long way in making renewable jet fuel and gasoline a reality in Australia.”

Norwegian ambitions for establishing the electrification of short-haul passenger aircraft laid out in new report

Thu 19 Mar 2020 – The first use of electric aircraft for domestic scheduled air travel in Norway is feasible by the end of the decade, finds a report by airport operator Avinor and the Norwegian CAA for the country’s government. If the right support and measures are put in place, the report foresees that by 2040 all domestic aviation in Norway will be operated with electrified aircraft, which would reduce greenhouse gas emissions by at least 80 per cent compared with 2020. It proposes incentives regarding technology development, investment support and an attractive tax regime during the operational phase, alongside international innovation cooperation. An aviation zero emissions task force has already been set up to prepare and present a roadmap in mid-2020 that includes EASA, the Norwegian CAA, Airbus, Leonardo, Safran, Avinor and airlines SAS and Widerøe.

“In order to ensure that high-quality transport services continue to be provided in Norway, it is in Norway’s own interest – from the perspective of climate, district and transport policies – that zero- and low-emission aircraft are developed which are capable of operating on the unique Norwegian short-haul network under the prevailing meteorological conditions in the country,” said Norwegian Civil Aviation Authority Director General Lars Kobberstad at an event hosted by Rolls-Royce in Trondheim to hand over the report.

“The assignment given to us by the government has now been completed and the conclusions are very clear,” said Avinor CEO Dag Falk-Petersen. “Our recommendation is that Norway should be one of the main arenas in the world for the electrification of air travel.”

Norway’s dependence on aviation and a unique short-haul network, together with abundant access to renewable electricity, the political will to electrify the air transport sector, and interested and active stakeholders, made Norway an interesting test area and the first market for the electrification of aircraft, he added.

“Therefore, it is important Norway adopts a package of measures as quickly as possible,” he said.

The report finds that based on existing technological know-how and the expected pace of development, it should be possible to develop, certify and introduce electrified aircraft – meaning aircraft fitted with one or more electric motors for propulsion – carrying up to 19 passengers on regular civil scheduled flights between 2025 and 2030, and larger aircraft after that. These initial aircraft would have an effective range of about 350-400 km – an actual range of more than 500 km would be required for energy reserve – which would be sufficient for many domestic flights in Norway, including the vast majority of routes on the Norwegian short-haul network.

For longer range, given current known battery technology, it will be necessary to rely on series hybrid solutions where the aircraft is equipped with a battery and a ‘range extender’, such as a generator powered by biofuel, which can charge the batteries as and when necessary, or hybrid solutions that have both electric and conventional jet engines. A third possibility is to use fuel cells, says the report.

Despite the entry-into-service goals, the report cautions that the development of electrified aircraft is still in its infancy, “so it is not possible at the present time to make accurate predictions as regards timespans or costs.” It foresees smaller companies and start-ups positioning themselves in the 19-seat segment (certified aircraft in accordance with EASA CS-23 regulations), with the big aircraft and engine manufacturers likely to focus on larger aircraft development projects.

The report also highlights a potential risk that aircraft manufacturers may not find the short-haul, short-runway segment sufficiently attractive to invest in and the smaller companies may be unable to secure the financing required to complete the development process and actually launch an aircraft into the market.

Another challenge is that aviation regulations have mainly been written for fossil-fuel based engine systems and aircraft. The development of new electrification technology may well need changes in safety regulations and certification requirements, which will take both time and resources. “If the development of the framework does not form an integral part of technology development, it could delay the processes involved,” warns the report.

The report calls for the establishment in Norway of an international centre for the development, testing and implementation of zero- and low-emission aviation technology. Organised either virtually or physically, it would act as an arena for cooperation between players in different fields – aircraft, engines, batteries, airlines, airports, government authorities, research communities and other stakeholder groups. The report says clear criteria for participation and a funding model for the centre would need to be agreed.

Investment in the new electric aircraft will be a strategically important decision for airlines and comes with financial risk. The report suggests considering appropriate support schemes during the transitional phase for the purchase of new aircraft, creating grant schemes for the establishment of aircraft charging infrastructure and VAT exemption for light aircraft.

During the operational phase, to make it profitable for airlines to invest in electrification, the report suggests the Norwegian government provides clear signals that the tax regime will be adapted to make travelling on zero- or low-emissions aircraft relatively more affordable for both passengers and commercial operators than flights with conventional aircraft. Such policies could include VAT and air passenger tax exemptions or reductions on tickets through to 2040, subject to possible re-evaluation in 2035; adjustment on take-off charges; and a reduction in electricity tax for aircraft used in commercial operations, in accordance with a model taken from the shipping sector.

“It is vital that goals, initiatives and instruments are seen as an entirety,” conclude the report’s authors. “We recommend that the government establishes clear goals which are formulated in such a way that they appear effective and concrete – and that they set out a clear direction. This will be very important for the market players involved.

“However, the goals will only have the desired effect if they are followed up with binding and predictable incentives which are effective in all phases until zero- and low-emission aircraft are in regular scheduled traffic in Norway. We particularly wish to emphasise the importance of measures that will make the early adoption of new and climate-friendly technology both profitable and attractive to passengers, operators and other stakeholders alike.”

Accepting the report, Knut Arild Hareide, Norway’s Minister of Transport and Communications, said: “The world is facing a climate crisis and it is up to us in the transportation sector to make the biggest reductions in emissions. We must deliver on this, and electric aircraft may be part of the solution. I am now looking forward to reading this proposal.”

Link:

‘Proposed programme for the introduction of electrified aircraft in commercial aviation’ report (English summary starts page 49)

ICAO Council follows advisory body recommendations and approves CORSIA-eligible carbon programmes

Mon 16 Mar 2020 – ICAO’s governing Council has approved the first programmes that will provide eligible emissions units requirements in the 2021-2023 pilot phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The Council has adopted in full the recommendations of its Technical Advisory Body (TAB) that was established to assess applications from emissions unit programmes against agreed CORSIA criteria (EUC). Of the 14 applications received, six programmes have been assessed as having met the scheme’s EUC, including the UN’s CDM, with two programmes conditionally approved subject to meeting certain conditions. Two more have been invited to reapply with four others rejected either because their programmes were in the early stage of development or were not considered programmes. To reinforce CORSIA’s environmental integrity, a vintage restriction has been placed on eligible units.

“The decision is the result of a robust assessment of emissions unit programmes against a set of criteria agreed by ICAO Member States,” commented Salvatore Sciacchitano, President of the ICAO Council, which adopted the TAB’s recommendations during its current 219th Session. “It will ensure that CORSIA is both practical and robust, and represents an important environmental milestone.”

ICAO’s Deputy Director of Environment, Jane Hupe, said the Council’s approval meant the UN agency now had all the pieces in place to implement CORSIA.

“We have come a long way in a short amount of time and continue to encourage greater commitment from our from our Member States towards climate action,” she said. Cote d’Ivoire has just become the 82nd country to voluntarily join from the start of CORSIA’s pilot phase next year.

Following the TAB’s report to the Council, the six programmes approved are:

American Carbon Registry
China GHG Voluntary Emission Reduction Program
Clean Development Mechanism
Climate Action Reserve
The Gold Standard
Verified Carbon Standard (Verra)

The Forest Carbon Partnership Facility and Global Carbon Council will become eligible once the TAB has confirmed to the ICAO Council that updates to their respective programmes meet specific conditions. The British Columbia Offset Program and the Thailand Voluntary Emission Reduction Program have been invited to re-apply in the next round of applications, which was due to get underway this month although this has yet to be confirmed. Applications from REDD.Plus, myclimate and The State Forests of the Republic of Poland were not assessed as they did not meet EUC key elements of a programme at the time of the TAB’s assessment, while Seattle-based Nori was considered to be still at an early stage of development.

Emission units, or carbon credits, eligible for use by airlines in CORSIA’s 2021-2023 pilot phase will be restricted to those issued from projects whose first crediting period started on 1st January 2016 and which represent emission reductions achieved on or before 31st December 2020. The adopted restrictions will be reviewed before the start of the first phase in 2024.

ICAO said it will publish a list of eligible units on its CORSIA website in due course. The TAB recommends this takes place once applicants have been notified, including any recommendations it makes related to eligibility scope, parameters and any conditions and exclusions.

“We welcome the ICAO Council decision, which allows airlines to start financing climate action projects through six high-quality programmes when offsetting requirements come into effect at the end of this year,” said Michael Gill, Executive Director of the cross-industry Air Transport Action Group.

“Importantly, the Council has reached its decision on the basis of recommendations from government experts to ensure CORSIA utilises credits that bring about sustainable, additional and verifiable emissions reductions. Assessment criteria were developed by governments, environmental groups and aviation industry partners. This important Council decision will prompt eligible programmes to start generating new projects, multiplying climate action around the world.

“CORSIA is, of course, not the only solution to aviation’s climate change challenge, but it is an important mid-term step whilst we increase efforts towards long-term solutions such as sustainable aviation fuels and radical advances in technology to start reducing overall industry emissions.”

Brussels-based NGO Carbon Market Watch (CMW) has given the ICAO decision only a lukewarm welcome, describing the vintage restriction as “better than nothing” and said it fails to exclude the possibility of “junk” credits being used by airlines.

Without the adopted restriction, several billion UN Clean Development Mechanism (CDM) credits could have been eligible, it said. With the restriction, the potential supply could be reduced to between 180-570 million credits, but still several times larger than anticipated demand over CORSIA’s pilot phase, it forecasts. Depending on the scenario used and the impact of the coronavirus outbreak on aviation emissions in 2020, CMW estimates a demand for between 44-158 million credits.

The NGO supported a vintage in which only projects that started in 2020 or later should be eligible under CORSIA.

“We have not modelled the exact volume of supply with this vintage but given the deadline for airlines to surrender units for the pilot phase is not until 2025, there is still ample time for new projects to develop,” said Gilles Dufrasne, Policy Officer at Carbon Market Watch.

“We are also convinced the CDM should not be eligible as it does not meet several of the CORSIA quality criteria. For example, it does not fully meet the additionality criteria, nor the sustainable development criteria, and it does not have adequate safeguards in place, as stated in the TAB report itself.”

He added that certain restrictions that had been imposed on voluntary programmes did not appear to have been placed on the CDM. He noted several programmes had not met the ‘additionality’ criteria and risks related to non-permanence of emissions reductions but it had been decided to recognise them anyway and give them time to “familiarise themselves” with the criteria.

“The aviation market will provide the UN’s offsetting scheme life support for another few years, but it is clear the CDM has lost all credibility and anyone who cares about supporting high-quality climate projects should steer away from it,” said Dufrasne. He believes the decision by ICAO to adopt the report will set an important precedent to inform the difficult parallel Article 6 negotiations of the Paris Agreement.

More positively, Annie Petsonk, International Counsel at the Environmental Defense Fund, said: “We applaud the ICAO Council for listening to its experts and focusing on science in its decision to adopt environmental provisions in its market-based system to reduce climate pollution from airlines. At a time of extreme stress for the industry, aviation has stood by its commitment to grapple with the climate crisis even as it deals with the immediate tragedy of Covid-19. That is a demonstration of real leadership.

“The Council’s decision sends a signal that when we get to the other side of the gut-punch that Covid-19 is delivering to families, communities and the whole travel sector, nations will move forward to meet the climate challenge. Much more work remains to be done but the decision provides one hopeful step in the right direction – and shows a path forward for the global climate talks too.”

The decision was also welcomed by the trade body representing the carbon market sector. “We’re delighted ICAO has now created the clarity airlines need in order to source emission reduction units for compliance,” said Dirk Forrister, CEO of the International Emissions Trading Association (IETA). “Investors can ramp up to begin supplying these reductions to the new market mechanism. ICAO’s focus on high quality carbon reductions will act as a strong incentive to operators of other such programmes to set the bar high when it comes to compliance instruments.”

Added IETA’s Director for Aviation, Eva Weightman: “The Council’s adherence to robust emissions unit criteria combined with the imposed restriction on historical emissions reductions brings the high environmental integrity we have been calling for.”

Maria Kolos of carbon market analysts Refinitiv said: “The ICAO Council managed to meet the deadline of approving eligibility rules for CORSIA, so ensuring clarity for the operators who will start CORSIA from the pilot phase in 2021-2023. We expect that reducing uncertainty will send a signal to airlines, which may encourage pre-compliance purchases, and as such provide additional demand for carbon credits.”

During its current session, the ICAO Council also adopted a new environmental standard aimed at reducing civil aviation impacts on local air quality and human health. Applicable to engine designs of rated thrust greater than 26.7 kN, the new non-volatile Particulate Matter (nvPM) mass and number engine transmission standard will govern both new and in-production engines from 2023 onwards.

Commenting on the adoption, Council President Sciacchitano said: “It demonstrates important sectoral leadership with the completion of the full suite of environmental technology standards for subsonic aircraft engines, and it will also ensure that only the latest and most effective nvPM reduction technologies are employed in post-2023 aircraft engine designs.”

Finnair signs SAF agreement with Neste as it targets a 50% reduction of net emissions by 2025

Mon 9 Mar 2020 – As part of what it calls the most ambitious sustainability strategy to date in the aviation industry, Finnair says it intends to reduce its net emissions by 50% by the end of 2025 from a 2019 baseline and achieve carbon neutrality by 2045 at the latest. To achieve the 2025 target, the airline is investing between €3.5-4.0 billion ($4-4.5bn) over the next five years and a further €60 million ($68m) in sustainability initiatives over the same period. As well as seeking reductions in onboard weight and driving improvements in operational fuel efficiency, Finnair will also offset the carbon emissions from flights by corporate customers. Sustainable aviation fuels (SAF) are to play a key role in its long-term carbon reduction strategy and last week the airline announced an agreement with Neste to purchase SAF for use on flights from Helsinki.

“We are excited about increasing the use of SAF in our operations from our Helsinki hub,” said Finnair CEO Topi Manner. “Sustainable aviation fuels are a key part of our long-term plan for carbon neutrality – by the end of 2025 we expect to spend some €10 million annually on SAF. Developing a healthy SAF market requires commitment from forerunners and we are happy to be leading the way with Neste.”

As part of its ‘Push for change’ initiative launched in early 2019, Finnair used SAF sourced from used cooking oil on two flights from San Francisco to Helsinki under a purchase agreement with Shell, World Energy and SkyNRG (see article). This follows a survey that found travellers were prepared to pay more to lower the environmental impact of their flights if the proceeds went directly towards mitigation projects.

The airline says it intends to offer “integrated ticket solutions” to its customers later this year that will include a SAF option and will match customer contributions make to SAF with its own purchases. It will also use SAF to decrease the carbon footprint of its own staff duty travel and is working with airport operator Finavia and Neste to devise ways for corporate customers to decrease their travel carbon footprint with SAF.

“Decreasing emissions from aviation calls for cooperation, as this challenge cannot be solved by anyone alone,” commented Peter Vanacker, Neste’s CEO. “We are pleased to cooperate with Finnair and support Finnair’s carbon neutrality target. Besides the fuel supply, this partnership offers us an opportunity for contributing to our own climate targets by decreasing CO2 emissions of our business travel with Finnair through the use of Neste MY Renewable Jet Fuel. Currently, SAF offers the only viable alternative to fossil liquid fuels for powering commercial aircraft.”

In December, Finnair announced it would be contributing funding, along with other companies that include Neste, to a feasibility study on a potential synthetic fuels pilot production plant in Eastern Finland. The industrial-scale pilot facility is based on power-to-x technology to produce carbon-neutral fuels for transportation. The main raw materials would be excess hydrogen produced by chemical company Kemira and CO2 from the Finnsementii cement facility in Lappeenranta. Hydrogen and CO2 can be brought together in a synthesis process to provide synthetic methanol, which can be further processed into synthetic, emission-free transportation fuels.

The feasibility study is getting its main funding from the regional council of South Carelia, and the city of Lappeenranta is also partner in the project. It is being led by Lappeenranta-Lahti University (LUT), which first piloted the production of hydrocarbon to replace fossil fuels at laboratory scale in 2017.

“This project is seen as a chance to learn together and share knowledge,” said Jarmo Partanen, Dean of the LUT School of Energy Systems. “Some companies seek solutions to turn their own emissions into profitable raw materials. Others have a clear target to start producing or using carbon-neutral fuels in the near future.”

Added Anne Larilahti, Finnair’s VP Sustainability: “Synthetic fuels are a key part of the long-term solution for carbon-neutral aviation. It is natural for us to be supporting this important study to advance the development of synthetic fuels in Finland.”

Finnair’s multi-billion investment in the renewal and growth of its fleet is expected to reduce the CO2 emissions of its European traffic by 10-15% and it foresees further significant investment beyond 2025. The airline said it had paid over €35 million ($40m) in environment-related payments and EU ETS costs last year.

A plan has been developed to save unnecessary weight from the airline’s aircraft, with a target of reducing fuel consumption by 15,000 tonnes per year. As of the end of April, Finnair will remove travel retail sales from its short-haul European fleet and focus on pre-orders, which is expected to reduce on average 50-100 kg per flight and result in a 70,000 kg saving in fuel consumption and 220,000 kg of CO2 emissions per year.

The airline will also remove around 230 tonnes of plastic from its flights and plans to cut single-use plastics in half by the end of 2022. It is also replacing plastic cutlery from economy cabins with more sustainable options, so reducing a further 53 tonnes of plastic from its flights per year. To counter CO2 generated by meat production and to cater for changing tastes, more vegetarian options will be offered to customers during 2020. Action is also being taken to cut food waste in catering operations by half by the end of 2022.

To help achieve carbon neutrality in Finnair’s non-flight operations by 2022, further measures are to be taken to use renewable energy in ground vehicles and real estate energy consumption.

As of the beginning of September, Finnair will offset the carbon emissions of its corporate customers. It will also encourage consumer customers to make sustainable choices by introducing new ticket types that allow customers to support SAF purchases or offsetting initiatives later this year.

“The ambitious targets we have announced are achievable through the tangible steps we’ve described which we know will make a real contribution to CO2 reduction,” said Larilahti. “By working together with our customers, partners and employees, we can embrace this challenge with confidence. We want to encourage innovation and engagement, from our customers to our staff and to our supply chain, to show Finnair can lead the way to make a real difference.”

According to Finnair’s latest sustainability report, CO2 emissions from jet fuel consumption amounted to 3,566,409 tonnes in 2019, compared to 3,248,045 in 2018. The fuel used per revenue tonne kilometre decreased by 1.0% as a result of energy-saving activities and the addition of two Airbus A350s into the fleet. Finnair has improved the fuel efficiency of the fleet by 27.2% since 2005, an average 2.3% annual reduction.

Finnair management is to propose at the company’s next annual general meeting an amendment into the Article of Association “to allow Finnair to engage in activities that increase the positive effects and reduce the negative effects of our business on the environment and society.”

Link:

Finnair – Sustainability

Airline chiefs slam European countries over green taxes and overdue reform of inefficient airspace

Fri 6 Mar 2020 – Chief executives from Europe’s biggest airlines called for urgent reform and modernisation of European airspace that they said could eliminate around 25 million tonnes of CO2 a year and save €17.4 billion ($19.4bn) in fuel and related socio-economic costs. IAG’s Willie Walsh said it was “scandalous” that after many decades, the Single European Sky still had not been implemented. Speaking at the Airlines for Europe (A4E) Annual Summit this week, the CEOs also criticised attempts to tax passengers and fuel on environmental grounds, saying none of the revenues were used to help the industry decarbonise. Instead, the EU should ensure the full implementation of the global CORSIA carbon offsetting scheme and pursue a long-term carbon goal at ICAO. They also urged EU States to take legislative action and policy decisions to boost the development and uptake of sustainable aviation fuels.

Air France-KLM CEO Benjamin Smith, who has been elected as A4E’s Chairman for 2020, said airlines were united to make the new European Green Deal a success.

“We see this as part of our commitment to European society,” said Smith. “We look forward to working closely with industry and policy makers to make the continent’s skies the most efficient and environmentally friendly in the world – because failing is not an option.”

Coinciding with the European Commission’s announcement of a proposal for a European Climate Law that commits EU States to climate neutrality by 2050, A4E said it was leading a cross-sector study with the European Regions Airline Association, airports, manufacturers and air navigation service providers on potential pathways towards a net-zero or low-carbon air transport of the future. The outcome is expected in May, said A4E Managing Director Thomas Reynaert.

However, the challenge of tackling climate change was considerable, said Walsh, who retires from IAG in the summer. “Airlines are doing their share but in some areas, like air traffic management, we need action from other parts of the industry and EU leaders in order to succeed,” he said. “The modernisation of European airspace is both urgent and long overdue. This responsibility now lies with the Croatian and German Presidencies of the EU Council. The creation of a Single European Sky has been debated for 20 years – we cannot afford to wait any longer.”

Walsh told a press conference at the Summit that commercial aircraft were still flying the same inefficient routes as was the case 40 years ago, despite airlines “investing billions” in new technology that allowed aircraft to fly from point A to B without requiring land-based navigation. European airlines flying within European airspace emitted around 67 million tonnes of CO2 last year, he said, but with the modernisation of air traffic these airlines could save up to 7 million tonnes.

“It has been estimated we could reduce CO2 emissions by 10% through the Single European Sky – that’s a massive saving,” he said. “It’s not for the want of trying by us airlines – it’s that we’re not seeing other areas respond. ANSPs and governments need to address this, stop talking about doing it and take action.”

Lufthansa CEO Carsten Spohr believes the German presidency of the EU Council could make the issue a priority. Passenger convenience in less travel times and money savings used to be the main arguments in favour of reform but now there was “a new argument in town” in the form of carbon savings, he said.

In a panel session, the European Commission’s Director-General for transport, Henrik Holohei, said the lack of progress by EU countries on the Single European Sky was “disgraceful”, blaming sovereignty issues and a lack of cooperation between air navigation service providers. “In the EU we have managed to eliminate borders on the ground but not in the sky,” he said, adding, “It’s time for action.”

Another area for environmental improvement was in synthetic and sustainable aviation fuels, said Spohr. “This is surely the most realistic and effective means to seriously reduce emissions from aviation in the next decades. They have the mid and long term potential to reduce emissions by 85-90%.

“However, volumes of these fuels are way, way too small. As example, if my airline had access to all the SAF available in the world, it would only last 36 hours. So we have major issues around availability and the cost, which is around four to five times more than fossil fuel currently. In a highly competitive industry like ours, none of us can afford the extra cost. It is also important that in order to ensure a level playing field, our regulators don’t push us into [mandated] fuels unless it is done worldwide, otherwise it decreases the competitiveness of European airlines.”

Spohr said Lufthansa had a carbon compensation scheme in which passengers could buy SAF, which in turn allowed the airline to buy SAF volumes in San Francisco but he admitted take-up had been limited.

“So we need to bring the cost of SAF significantly down and bring the availability up,” he said. “We believe this is a huge opportunity for EU policy makers to play a leading role in the future of decarbonising our sector. A4E calls upon the European Commission to make SAF production a policy priority and national policies should support this. Research and development should be incentivised to ensure billions of litres of these fuels become available. Financing circles should also be created so, for example, money taken in aviation taxes could be used to support SAF investment.”

On taxation, Ryanair’s Michael O’Leary said: “We would like to see the removal of rights of EU governments to use aviation as a tax grab against consumers. In the last year, €16.7 billion ($18.6bn) of unilateral aviation taxes are being scammed from both the airlines and our customers under the guise of environmental taxes. None of this money is being spent on the environment and we need the Commission to push back on this. Taxation has done nothing for Europe’s passengers in the past 25 years.”

EasyJet CEO Johan Lundgren said his airline had paid €650 million ($720m) in taxes apart from EU ETS costs last year. “None of them goes into what we are trying to do, which is to decarbonise. The taxes don’t incentivise efficient flying. We’re not afraid of taxes but what we want is to ensure those taxes are linked to how efficient we are operating, not to get people to fly less.”

Walsh said last year IAG had paid €967 million ($1.1bn) in UK Air Passenger Duty, which had been introduced as an environmental tax. “Not one single cent went into environmental research or support,” he said. “The idea that we add more taxes is just damaging to the industry because it’s reducing our ability to invest in new technology, sustainable biofuels and research and development. It’s a nonsense.”

European airlines, argued Spohr, were already disadvantaged by the EU ETS which, he said, increased costs for feeder flights to their hubs compared to feeder flights to hubs outside Europe where the EU ETS did not apply.

Meanwhile, at a meeting yesterday of the EU’s Environment Council, Poland presented its views on the ending of free allowances for airlines under the EU ETS. The proposal is reported have received only minority support from other EU Member States although the Commission said it “welcomed the initiative as timely and recalled that a gradual reduction of free allowances for airlines was envisaged as part of the revision of the ETS directive, currently planned for June 2021.”