While a myriad of topics was discussed at the recent International Air Transport Association (IATA) Annual General Meeting & World Air Transport Summit, no conversation was as poignant than that of the ever-rising prices of jet fuel.
According to its own estimates, IATA expects the full-year average cost of Brent Crude to be $70/barrel, a 27.5% increase over the $54.9/barrel recorded in 2017, and higher than previous 2018 predictions that estimated $60/barrel. The trade association also noted that fuel costs for the year will account for 24.2% of total operating costs.
Considering this alongside IATA’s goal to reduce net aviation CO2 emissions by 50% by 2050, one would think that demand for sustainable aviation fuel (SAF) would be a top priority. Yet, despite the progress made since the first successful test flight using a mix of SAF and regular fuel took to the air — over 100,000 flights in 2018 — the utilisation of SAF is still fairly limited.
In fact, during an onstage interview at the annual general meeting between Andrew Stevens, Specialist Business Correspondent for CNN, and Matti Lievonen, president, CEO, and chair of the Neste Executive Board, the pair noted that a mere 0.05% of the industry’s annual $140bn fuel bill is spent on SAF. If IATA intends to raise the number from 100,000 flights to 1 million by 2020, a substantial increase in the use of SAF is needed.
While his company’s efforts in sustainable fuels have found huge success, Lievonen sharing that Neste has succeeded in cutting C02 emissions by 80% and even managed to save roughly 8.3 million tons in 2017 alone, in the aviation space, the maximum SAF blend on a flight achieved was only 50%. Even in that case with the Lufthansa flight, where no engine modifications were done at all, the results were not what Neste hoped they would be.
“We could use 100% but the engine technology is not allowing that ... but if I think about it, what is the optimal level today, to start, is 10 - 15%. Because there is also the price question because the [sustainable] fuel is more expensive than normal jet fuel. We need to look at that also,” commented Lievonen.
So what steps need to be taken to ensure IATA and the aviation industry cut back on their CO2 emissions?
“I think the first thing is that governments haven’t put aviation renewable jet fuel in a position where the world traffic is. That’s the one thing. There are no policies, no incentives,” explains Lievonen.
Additionally, Neste’s leader also believes there needs to be a bigger push from different aspects of the air transport sector to help achieve the C02 emissions goal. This means getting everyone from fuel suppliers, airline companies, engine manufacturers, and even airports involved in the process.
Illustrating with an example, Lievonen explained that if airports offered passengers benefits for utilising sustainable technologies, such as opting to use the more expensive biofuel in their cars, for example, this would encourage people to take the ‘greener’ option. Such incentives could come in the form of priority check-in lines for ‘green’ passengers, or access to ‘green’ lounges.
When asked if he had seen any examples of collaborative efforts within the air transport industry, Lievonen pointed to the case of Geneva Airport, where not only is the airport operator working with airlines to create a green hub, but there are also government incentives in place that are encouraging sustainable behaviour.