This series of white papers concerning the sustainability of air transportation is published in the midst of the COVID-19 disease period, which has had a tremendous effect on the worldwide aviation sector. Some voices are rising to push governments and institutions to tackle, in the recovery efforts to address the economic crisis, the sustainability issue of this transport mode at the source and redefine its global rules. We see those debates as a great opportunity to condense and review the main challenges of the aviation sector regarding sustainability.
9 min. read
Part 1: The environmental issues and main challenges of the air transport sector
As environmental questions have been rising recently across all the industries, the transport sector has been pointed out as one of a few sectors that have experienced a rise in greenhouse gas (GHG) emissions over the last 30 years in Europe . Even though the airline industry is responsible for 20% of the world’s CO2 emissions of the transport sector, these emissions are not subject to a low amount of legislative constraints (e.g. EU ETS in Europe). This raises concerns about the sustainability of a sector that is in constant expansion. How can we tackle the issue of a transportation system that relies on fuel and is a substantial source of GHG?
This paper is the first of a series of 4 White Papers that will focus on the sustainability challenges of the airline industry. It begins by having a look at environmental issues concerning the sector and provides the reader with solutions that are, as of now, considered to have a positive impact on its carbon footprint.
The issue with air transport
Today, almost 20% of the global population has already been on a plane. Since the 1970s, the volume of world air traffic has doubled every 15 years. For the past 10 years, the number of passengers has been increasing at a rate of 6% annually .
In 2018, this represented 4.3 billion passengers, which is 300 million more than in 2017. The International Air Transport Association (IATA) expects that with an average annual growth of 5% in the future, there will be almost 8 billion passengers in 2036 .
The growth of the industry is even more considerable in developing areas such as Asia and Central & South America than in Europe and North America (see Fig.2). In countries of important economic growth such as the BRIC (Brazil, Russia, India, and China), which represents more than 40% of the world’s population, air transport has recently become accessible to the growing middle class. This means that most of the growth in air transport will continue to come from these developing regions. According to IATA, China is set to pass the U.S. as the largest aviation market in the world around 2024, and India set to replace the U.K. in the third position around 2025.
Looking at carbon emissions, flights worldwide produced 859 million tons of CO2 in 2018, according to the Air Transport Action Group . This represents only a 2.5% share in human-induced carbon dioxide emissions. Industry supporters would argue that this share is negligible and therefore not a real environmental problem. However, because its GHG emissions have increased from 1.5% of total EU emissions in 1990 to 3.6% in 2018, it needs to be a considered issue. The alarming factor isn’t so much the current CO2 emissions, but rather the growth of air transport worldwide, more significant than in any other sector.
Indeed, per kilometer traveled, aviation is the mean of transport that emits the most CO2. It emits on average from 90 grams of CO2 per passenger per kilometer (gCO2/pkm) for long-haul flights to 150 gCO2/pkm for short-haul flights . It could be comparable to cars emitting an average of 180 gCO2/km with one person, but cars generally contain more than one person for long-distance trips. And it is not to be forgotten that the distances flown by planes are significantly higher.
Moreover, there is an additional phenomenon: the effect of water condensation trails from airplane reactors at very high altitudes, called aviation-induced cloudiness (AIC). Increasing the cloudiness of the atmosphere, these non-CO2 emissions are responsible for an additional greenhouse effect, increasing contribution to the radiative forcing of the CO2, that could doubles the effects of CO2 emissions . Those additional contributions, not considered so far in official emissions calculation due to the large scientific incertitude on their calculation, could further impact the emissions balance of the sector .
One can easily see the issue with air transport: planes emit significantly per person transported while allowing them to travel longer distances and is becoming accessible to more and more people every year.
Costs and tax regulation: why don’t we tax Airlines?
The airlines have long been unprofitable, and they have always been heavily incentivised by their state and by international organisations. They benefit from numerous direct and indirect sources of aid such as a fuel-tax exemption for international flights (80% of all flights) following the Chicago convention in 1944, or even a reduced or 0% VAT for national or international flights. According to the CE Delft study on the “Estimated revenues of VAT and fuel tax on aviation”, the 0% VAT on international flights in the European Union creates a shortfall of 10 billion euros per year on a European scale.
Some countries, such as Norway, Switzerland, Japan and the United States of America decided to tax fuel on national flights, but it is not the case for most of the European countries that do not offer any political initiative on air transport taxation.
It is worth mentioning that, despite the tax advantages, airlines have very low margins. In fact, the cost structure of a plane ticket (Fig. 3) shows that margins often are as low as 2% and can sometimes be negative in some cases.
As one can see, fuel is the highest cost, even for short flights, and this already incentivises companies to reduce the gas consumption of their aircraft. Adding charges such as a carbon tax could be interesting for governments but could completely undermine the competitiveness of carriers that are already facing strong international competition and reduced profitability.
So, what can be implemented to embark the sector on a decarbonisation pathways?
Reducing emissions from airplanes
In a fast-growing sector where each year more and more passengers travel, the first axis would be to set objectives toward reducing the emissions from airplanes.
The International Air Transport Association (IATA) has put climate targets in place:
- an average annual energy efficiency improvement of 1.5% from 2009 to 2020;
- carbon-neutral growth starting from 2020;
- a 50% reduction in emissions in 2050 compared to 2005.
The means to achieve these targets so far have been insufficient or nonexistent. In Europe, a first step has been made by including intra-European air transport in the EU’s emissions trading system (ETS) in 2012, which grants the European airlines a limited number of CO2 emissions. However, a lot of criticism has been voiced by experts, such as the environmental NGO Transport & Environment, deploring the over-allowance of free CO2 emissions to airlines. High quotas of CO2 emissions do not incentivise companies enough to reduce their emissions as planned .
In 2016, an agreement was reached by the International Civil Aviation Organization (ICAO) on the establishment of a mechanism to limit the aviation sector’s impact on the climate at an international level. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)  is an obligatory system to offset the CO2 emissions that exceed the baseline level of 2020 emissions. Companies participating in this system will need to compensate for their CO2 emissions with certified carbon compensation plans such as reforestation programs.
Even though carbon offsetting can be a positive tool, this cannot be substituted for effective reduction measures that would prevent GHG emissions in the first place. As action for reduction, the industry has discussed important works such as improving the energy efficiency of airplanes or developing promising technologies such as electric planes. It has also recognised biofuels as a promising solution for decarbonising its airplanes. The efficiency of those measure will be looked at closer in the next white paper.
Reducing the demand for Air transport
The second possible way to diminish the impact of air transport is simply to reduce the ever-increasing number of passengers. Over the last 20 years, only two years have seen a decrease in the number of passengers: 2001 and 2008, both due to terrorist attacks and the economic recession.
Governments and sovereign organisations are the stakeholders that have the power to limit the air traffic, by either the implementation of taxes on airfares, quotas for flying, or even the suppression of frequent flyer programs. All these approaches could be very effective but raise the following question: Can governments really afford to decrease air transportation? This mean is at the heart of economic activities, directly via air freight transport and business travel, but also indirectly via tourism. The tourism sector that represents 10% of Europe’s GDP  heavily relies on fast and affordable air transportation. It is unlikely that governments would make themselves less competitive in the market by limiting their citizens’ access to air transportation or increasing the prices of tickets to fly to their country.
In 2017, a survey conducted by IPSOS showed that only 12% of Americans were responsible for 70% of US flights . Thus, this could call for frequent flyer taxes, or even the imposition of flying quotas.
In the context of economic growth, a decrease in demand can arise from evolving mentalities as it has been observed in northern Europe with the “flygskam” phenomenon, started in Sweden. This concept of flight-shaming for environmental reasons has recently been popularised and is not as anecdotal as it seems: in July 2019, .. It all comes down to a matter of mentality and how concepts are applied in people’s actions: air transport is responsible for a significant amount of GHG emissions and they could be prevented by traveling locally or having video conferences instead of attending abroad meetings.
Nevertheless, as environmental concerns are substantially rising in developed countries, one cannot compare the dynamics of rich countries to developing countries, where the demand for air transport is increasing considerably. First, emerging countries lack the advanced transport infrastructure of Western Europe or North America, such as for example the rail infrastructure. Air transport is an alternative that is both competitive and convenient for the economic growth of many regions. Secondly, an increasing fraction of Asians, Eastern Europeans or South Americans are traveling internationally. It remains to be proved that these populations could renounce air transport because of environmental issues.
In a nutshell, as numerous environmental conundrums, finding solutions to the issue of carbon emissions in the transport sector is not an elementary task and will require efforts in many different areas. The major issue remains its growth pattern that will soon need to be limited, if the world economy takes the carbon issue seriously, starting in developed countries as a role model for the rest of the world. Strong regulations will also need to be set to stimulate the industry in its decarbonisation efforts.
Our next white paper will dive deeper into the technologies that will allow for the reduction of emissions from airplanes, looking at the technical progress in energy efficiency and in alternative fuels that is not a solution to overlook for the needed decarbonisation of air transport. Stay tuned !
Matthieu Beaudet – Junior Consultant at Greenfish
Thierry Marques – Junior Consultant at Greenfish
Gauthier de Dreuille – Junior Analyst at Greenfish
Nassim Daoudi – Chief Executive Officer at Greenfish
 EEA – Annual European Union greenhouse gas inventory 1990- 2017, 2019
 Presentation of 2018 Air Transport Statistical Results , 2019
 2036 Forecast Reveals Air Passengers Will Nearly Double to 7.8 Billion, 2016
 Air Transport Action Group – Facts & Figures , 2019
 The ICCT – CO2 emissions from commercial aviation in 2018 2019
 UK Government GHG Conversion Factors for Company Reporting, 2019
 Transport impacts on atmosphere and climate: Aviation, D.S. Lee et al., Atmospheric Environment 44 (2010) 4678–4734
 CE Delft – Estimated revenues of VAT and fuel tax on aviation, 2013
 TRANSPORT & ENVIRONMENT – Aviation in the ETS, 2018Measurements. Part 1: Theory, Aerosol Science and Technology, 38:12, 1185-1205, DOI: 10.1080/027868290903907
 Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), 2016
 EUROSTAT – Transport and tourism policy
 Air Travelers in America: Survey Highlights, 2017
 Sweden: “Flygskam” lowers the number of passengers on domestic flights , 2019