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January 2022

Decarbonizing Aviation:
All Aboard

<p><strong>Decarbonizing Aviation: </strong><br />
All Aboard</p>

Chairs of the reflexion

  • Guillaume Faury, CEO, Airbus
  • Benjamin Smith, CEO, Air France-KLM

General rapporteurs

  • Stéphane Albernhe, président, Archery Strategy Consulting
  • Rémy Bonnery, Senior Project Manager, Archery Strategy Consulting
  • Guillaume Hue, Partner, Archery Strategy Consulting
  • Ludovic Planté
  • Yannick Assouad, Executive Vice President, Avionics, Thales
  • Wassim Ballout, Energy Analyst, Corporate Strategy Department, EDF
  • Jerôme Batout, Partner, Batout-Guilbaud
  • Anne-Sophie de la Bigne, Head of Civil Affairs in the Public Affairs Divisions, Airbus
  • Anne Bondiou Clergerie, Director of R&D, Space and Environment, GIFAS (French Aerospace Industry Grouping) and Executive Secretary of the French Council for Civil Aeronautics Research (CORAC)
  • Rémi Borel, Project Manager, Public Affairs Department, EDF
  • Antoine Bouvier, Head of Strategy, Airbus
  • Olivier Del Bucchia, member of Aérodécarbo, Co-author of the report How will we fly in 2050?
  • Jean-Pierre Burzynski, Director of the Processes Engineering Division, IFPEN
  • Grégoire Carpentier, member of Aérodécarbo, Co-author of the report How will we fly in 2050?
  • Damien Cazé, CEO of Civil Aviation (DGAC)
  • Pierre-Franck Chevet, Chairman of the Board of Directors, IFP Énergies nouvelles
  • Lucas Colson, Project Manager, Direction Générale des Entreprises (DGE)
  • Marc Cottignies, Expert Engineer, ADEME
  • Philippe Coq, Director of Public Affairs, Airbus
  • Eric Dalbies, Senior Executive Vice President R&T and Innovation, Safran
  • François Delabre, Head of Think Tank Relations and Economic Studies, Institutional Affairs, Air France-KLM Group
  • Stephan Denner, Managing Director, AVIAPARTNER France
  • Muriel Doucet, Director of Public Affairs, Innovation, Technologies (Deep Tech: Space, Big Science / Quantum Computing, Aerospace), Digital & Healthcare, Air Liquide Group
  • Nicolas Disle, Key Account Manager for the aeronautical industry, EDF Commerce
  • Régis le Drezen, Head of department-Innovation & Development e-Mobility, Enedis
  • Eve Dufosse, Head of R&D for Renewable Energy and Storage Programs, EDF
  • Julien Einaudi, Executive Vice President, Ortec Group
  • Enea Fracassi, Chief Operating Officer, Corsair International
  • Thibaud Frossard, Strategic Procurement, Digital, Innovation and Transport Advisor to the Minister Delegate for Industry
  • Laurent Galtier, Activity Leader for Organics, SUEZ
  • Jacques Ghisgant, Head of Territorial Actions, Innovation Financing, EDF Ile-de-France
  • Hervé Gilibert, Chief Technical Officer, ArianeGroup
  • Pierre-Étienne Girardot, Innovation, Transport and Digital Industries Advisor to the Minister Delegate for Industry
  • Jean Gouadain, Chief of Staff of the CEO of Civil Aviation, DGAC
  • Michel Guilbaud, Partner, Batout Guilbaud
  • Marc Hamy, Vice President, Corporate Affairs, Sustainability and Environment, Airbus
  • Jean Christophe Henoux, VP Future Programs, ArianeGroup
  • Olivier Houvenagel, Deputy Director of Power System Economics, RTE
  • Laurent Joly, Deputy Director of Research and Educational Resources, ISAE-SUPAERO, Director of the Institut for Sustainable Aviation
  • Marion Lacombe, Hydrogen Business Developer, GRTgaz
  • Dominique Lagarde, Strategy Director, Enedis
  • Marwan Lahoud, Executive Chairman, ACE Capital Partners, Member of the Institut Montaigne Steering Committee
  • Matthieu Landon, Technical Advisor for Industry and Research in the Economic, Financial and Industrial Division of the Prime Minister's Office
  • Anne-Sophie Le Lay, General Secretary, Air France-KLM
  • Steven Lemoing, Manager for Sustainable Aviation Fuels, Airbus
  • Antoine Maguin, CEO, Alvest Group
  • Joffrey Mai, Director of Environment and Sustainable Development, Vinci Concessions
  • Denis Mercier, Deputy Managing Director, FIVES
  • Dominique Mockly, President and CEO, Terega
  • Samuel Morillon, Senior Vice President, Asia Pacific - General Manager, Siemens Energy
  • Pierre Moschetti, Deputy Director of Aeronautical Construction, DGAC
  • Thibaud Normand, VP Climate Strategy Department, Safran
  • Nicolas Notebaert, CEO, Vinci Concessions , and President of VINCI Airports
  • Xavier Pons, CEO of Sonovision, ORTEC Group
  • Olivier Reuther, Hydrogen Project Leader, ArianeGroup
  • Anne Rigail, CEO, Air France
  • François Robert, member of Aérodécarbo, Co-author of the report “How will we fly in 2050?”
  • Marc Rohfritsch, Director of the Industry and Services Program, General Secretariat for Investment
  • Delphine Roma, VP Marketing - Global Markets & Technologies, Air Liquide Group
  • Augustin de Romanet, Chairman and CEO, Aéroports De Paris Group
  • André Hubert Roussel, CEO, ArianeGroup
  • Marianne Sieg de Maintenant, Director of Institutional and International Affairs, Air France-KLM Group
  • Stéphane Thion, Head of Sustainable Aviation Fuels, TotalEnergies Aviation - Strategy/Development & Sustainability
  • Yann Tréméac, Deputy Head of the Transport and Mobility Department, ADEME
  • Lucas Violon, Strategy and Public Affaires, Batout Guilbaud
  • Xavier Vigor, VP Technologies and Industrial Management - World Business Line Hydrogen, Air Liquide Group
  • Jean-Christophe Viguie, Program Manager Biofuels & Plastic Recycling, IFP Énergies nouvelles
  • David Ziegler, VP Industry Aerospace and Defense, Dassault Systèmes

In 2021, the airline industry made a formal commitment to take a concrete step towards its decarbonization, by announcing a carbon neutrality target for 2050, in line with the Paris Agreement.
This decision marks a turning point in the airline industry’s efforts to reduce its climate impact, essential in the global fight against climate change. It’s an ambition that requires a rapid and strong mobilization of all governments and airline industry stakeholders to create and commit to an actionable roadmap.
Institut Montaigne offers a detailed account of all the levers required to achieve the global carbon neutrality target in 2050 for the airline industry, while measuring the level of investments this will require.

How well do you know the airline industry?

The aviation industry is a strategic sector for France and Europe. As a flagship of European industry and a breeding ground for innovation, it contributes to the growth of our economy and our mobility system. It facilitates trade and tourism and supports a whole ecosystem of direct and indirect jobs. The competitiveness and sovereignty of France and Europe thus strongly depend on the successful energy transition of the aeronautics industry.

How many jobs does the aeronautics sector provide in France?
Correct answerWrong answer
The aeronautics sector is one of the most important industrial sectors in Europe and in France: it equates to nearly 350,000 direct industrial jobs in France. In addition, service operators (airlines, ground handling, airports) account for nearly 100,000 direct jobs in France. In Europe, air transport represents 13.5 million jobs (direct, indirect, tourism-related).
What are the annual sales of the aeronautical sector in France?
€25 billion
€59 billion
€74 billion
Correct answerWrong answer
With sales of around €74 billion in 2019, of which two-thirds are exports, the aeronautics industry is one of the main contributors to the French trade balance. It accounts for 13% of French exports, making it the country's leading export sector. At the European level, the aeronautics industry contributes $991 billion to GDP. Although the sector has been strongly impacted by the health crisis, governments have implemented measures to support the air transport sector which has limited the number of company bankruptcies in the sector and maintained skills.
How many passengers travelled by plane in 2019?
2.6 billion passengers
4.5 billion passengers
5.8 billion passengers
Correct answerWrong answer
Air transport carried 4.5 billion passengers in 2019 and is a major component of the mobility system of our modern societies. In addition to intercontinental links, for a number of geographical regions - particularly islands - air routes are now a near-vital need. For example, Indonesia, which is a very insular territory, carries each year a number of passengers (in domestic flights) equivalent to 15% of its population.
How many jobs does the aeronautics sector provide in France?

What are the annual sales of the aeronautical sector in France?
€74 billion

How many passengers travelled by plane in 2019?
4.5 billion passengers

Decarbonizing Aviation: Staying the Course

Air transport CO2 emissions make up 2 to 3% of total world emissions, and 10% of the transport sector’s emissions, a level lower than shipping. Approximately 80% of emissions come from flights travelling more than 1,500 km (medium and long-haul). Air travel currently achieves fuel consumption of 3L/100km/passenger: air travel consumes less fuel per passenger-kilometre than a car, considering the average fuel consumption of both modes of transport.

Since the 1990s, the industry has made significant efforts to reduce its kerosene consumption. Air transport CO2 emissions per passenger kilometre have been halved since 1990 due to the combined effects of technological advances in aircraft and improvements in operations and infrastructure. Thus, despite historically high growth in air traffic (+5.3% per year since 1990), the sector has managed to contain its carbon footprint (+2.5% per year).

The health crisis has particularly affected the air transport sector. In this context of uncertainty, there is an emerging consensus in the industry that air traffic will return to its pre-crisis level probably around 2024. Because of the pandemic and its impact on traffic long-term, the industry has revised its passenger traffic forecasts to +3.1% per year for the period 2019-2050. Despite these uncertainties, the air transport industry has maintained its objective of making additional commitments to reduce its environmental footprint.

Four priority levers to decarbonize air transport by 2050

The baseline scenario used in this report is the most ambitious in terms of technological progress among the possible scenarios identified by the industry.

Technological developments
(~34% of the decarbonization effort by 2050)
In detail

The implementation of technological innovations on the engine and structure of aircraft is essential to reduce their consumption. Several designs are being studied, the most emblematic of which are electric (hybrid) propulsion and hydrogen propulsion. Regular aircraft renewal makes it possible to take advantage of the beneficial effects of technological developments in favour of reducing fuel consumption and can make a significant contribution to controlling emissions by 2050.

Recommendation n°1: Accelerate the development of disruptive technologies and increase the incremental reduction in aircraft energy consumption.

Recommendation n°2: Facilitate financing for the replacement of old equipment with newer, lower-emitting equipment within the framework of the EU Taxonomy and/or using surcharge mechanisms.

Optimization of flight and ground operations
(~7% of the decarbonization effort by 2050)
In detail

Improving the efficiency of flight and ground operations can help reduce CO2 emissions and reach the goal of carbon neutrality in 2050: optimizing air traffic and airspace, flights and trajectories, ground operations and practical equipment and maintenance all are additional levers. While this lever alone will not be enough to achieve the objective, these practices can be more rapidly implemented than technological developments for aircraft, which are limited by the rate at which new aircraft enter airline fleets.

Recommendation n°3: Implement means of reducing energy consumption for aircraft operations

Recommendation n°4: Promote intermodality for the start/end of trips, notably by ensuring connections between the main rail stations and the terminals to facilitate transitions, and by implementing integrated passenger transport pathways.

Alternative fuels
(~53% of the decarbonization effort by 2050)
In detail

The main lever for decarbonizing the aviation sector is to replace fossil fuels (kerosene) with sustainable aviation fuels (SAF): biofuels, synthetic fuels and hydrogen. The development of SAF will require both foresight regarding future airline fuel demands, as provided for in European regulations (ReFuel EU Aviation) through the SAF blending mandate, as well as production support, in order to develop a competitive European industry. The introduction of mandatory SAF blending, initially limited to Europe, must not distort competition, at the risk of reducing the attractiveness of European hubs and weakening European airlines or encouraging carbon leakage outside European borders.

Recommendation n°5: Clarify the definition of SAF and ensure their use to achieve emission reduction goals.

Recommendation n°6: Support supply to create a competitive SAF market in Europe.

Recommendation n°7: Limit distortions of competition between hubs/airlines.

Recommendation n°8: Promote synthetic fuel to stimulate the development of a large scale hydrogen production chain

Compensation measures
(~6% of the decarbonization effort by 2050)
In detail

Given the price difference between kerosene and SAF, the SAF blending mandate will lead to additional operating costs for airlines. A heterogeneous application in relation to other regions of the world would be a source of major distortions of competition, particularly for certain destinations where price elasticity is significant. Two main carbon allowance systems co-exist in the world: EU-ETS on a European scale and CORSIA5 on a global scale. While they differ in their geographical coverage, approach, applicability and level of ambition, the objective of limiting the aviation sector’s CO2 emissions is comparable. It is essential, first, that the coexistence of these schemes doesn’t distort competition, second, that the schemes ultimately converge towards a carbon-neutral objective, and third, that they cover all commercial flights.

Recommendation n°9: In the short term, set up a mechanism to limit the distortion of competition related to connecting traffic between Europe and the rest of the world subject to the EU-ETS, for example by maintaining a fraction of free allowances to ensure balanced competition with flights subject to the CORSIA system.

Recommendation n°10: Strengthen existing carbon quota systems and develop new mechanisms to extend their coverage to air traffic emissions not covered as of yet.

States and Stakeholders, Unite!

The production of synthetic fuels has many advantages: (almost) unlimited inputs (water, air) and a CO2 impact close to zero when using decarbonized energy. However, this process requires a significant amount of electrical energy to produce hydrogen and capture CO2. To ensure a net reduction in emissions, this energy must be produced using low CO2 emitting units, such as renewable energies (wind, solar, hydraulic) or nuclear. Thus, our power generation system must now be re-examined in light of this energy challenge and investments must be made accordingly, with sufficient consideration of future needs.

Historically, while air transport has managed to contain its emissions in the context of increasing traffic, without relying on alternative energies, this situation is no longer compatible with the sector's decarbonization target. It is therefore becoming essential to implement coordinated action between the aviation sector, electricity producers and energy companies that produce alternative fuels (biofuels, hydrogen, synthetic fuels) while maintaining overall consistency between the measures implemented to decarbonize the various modes of transport.

The investments required are substantial, approximately $1 trillion per year. Compared to the historical level of investment in the oil sector (nearly $500 billion per year), this amount seems attainable if very proactive policies are implemented.

States, therefore, play a central role in supporting this sector’s transition, especially in order to support the implementation of new means of electricity production and sustainable fuels.

Recommendation n°11: Implement a massive investment policy for decarbonized energies that goes beyond the replacement of production methods currently used, in order to meet the new needs of transport players by 2050.

<p><strong>Decarbonizing Aviation: </strong><br />
All Aboard</p>
(176 pages)
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