Climate Change: Sustainable aviation claims don't stack up

When the pandemic sent the world into lockdown and air travel ground to a halt, people stared out their windows at the quiet, blue skies overhead, and tweeted, tongue-in-cheek: “Nature is healing.”

In branding terms, that meme was a disaster for the aviation industry. A consumer business that makes the largest slice of its profits from an increasingly environmentally-conscious global middle class doesn’t want to be cast as a bad actor. Fixing that image problem is hard, though, because unlike power utilities and automakers, the aviation sector hasn’t got a carbon-free technology on hand to eliminate its emissions.

That doesn’t stop it saying that such a technology exists, however. The UK’s advertising regulator last week banned two advertisements by Etihad Airways after finding the airline’s claims that it was “taking a louder, bolder approach to sustainable aviation” didn’t stack up. The move follows similar actions against greenwashing advertisements by Lufthansa AG and Ryanair Holdings Plc.

There are “no initiatives or commercially viable technologies in operation within the aviation industry which would adequately substantiate an absolute green claim such as ‘sustainable aviation,’” the Advertising Standards Authority wrote in its Etihad decision.

You almost feel sorry for Etihad. It’s hardly the only carrier making such extravagant claims. The International Air Transport Association, the global industry group, is promising the sector will hit net zero emissions by 2050 — but that’s more a wild aspiration than a plausible pathway. Aviation’s footprint is far more likely to increase than decline over the coming decades.

Powering long-haul aircraft with batteries or hydrogen isn’t possible for fundamental physics reasons, so two-thirds of the emissions reductions that IATA is targeting come from sustainable aviation fuel, or SAF — a substitute for conventional jet kerosene made from biomass, waste products, or captured industrial carbon dioxide and hydrogen.

The trouble is, there’s not enough of it. Used cooking oil is one popular waste product that in theory could power the world’s aircraft, but collecting, sorting and refining all that grease is enormously challenging. As a result, waste oil generally costs more than jet fuel itself. There’s simply not enough used cooking oil around to fulfil existing biofuel mandates, especially as the European Union lifts its targets over the coming decade, according to a study last year by the International Council on Clean Transportation.

Alternatively, you could mix in ethanol the way a lot of cars do — but the downsides there are even bigger, because the corn and cane from which it’s produced are also used to make sugar. Thanks to ethanol blending, global prices of crude oil and sugar often move in tandem. The benchmark sugar contract hit its highest level in nearly seven years last week, raising the cost of one of the cheapest forms of nutrition for the world’s poorest.

KPMG reckons SAF demand will outstrip supply of biomass and waste feedstocks for more than 20 years. Human food for domestic consumption already comprises less than a fifth of US crop production. Even a modest increase from current levels could tip that balance further away from feeding the world’s growing population. Our planet simply doesn’t have enough agricultural land to supply fuel on the scale that initiatives like Europe’s ReFuelEU plan require over the coming decades.

The most serious hopes for SAF don’t involve farmland at all, but eSAF — a synthetic kerosene made from reacting green hydrogen with captured carbon dioxide. This product is still largely theoretical. The only production facility in the world is a demonstration plant in southern Chile that started deliveries in December and wouldn’t produce enough in a year to fill the tanks of a single Airbus SE A380. (Two more demonstration plants hope to start up soon in Texas and Germany). You’d need several million plants of that size to make a serious dent in jet fuel’s thirst for petroleum.

Such a vast scale expansion would be necessary to overcome SAF’s biggest problem, too: cost. According to BP Plc, eSAF is about eight times as expensive as conventional jet fuel and as much as three times the cost of SAF made with biomass. Fuel represents roughly a quarter of operating expenses for most airlines. It’s inconceivable they would tolerate such a colossal increase in their cost base, which would inevitably result in  demand destruction as passengers are priced out of flying.

If the aviation industry was serious about SAF, it would have no problem supporting the EU’s mandate policy, because it would see a viable pathway to hitting the targets. Instead, it’s begging for the cost gap with jet fuel to be closed using public subsidies instead. Such lobbying shows the sector as a whole is about as serious about sustainability as Etihad. SAF risks going down in history as a sibling to carbon capture and storage, a technology with theoretical potential mostly used by emitters to promise illusory pollution reductions. Air passengers shouldn’t be fooled by such greenwashing.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. Views are personal, and do not represent the stand of this publication.

Credit: Bloomberg