Airlines UK ZAS0017

Airlines UK written evidence for the Environmental Audit Committee’s inquiry into net zero aviation and shipping

About Us: Airlines UK

Airlines UK is the trade association for UK airlines. Our members are 2Excel, AirTanker, British Airways, CargoLogicAir, Eastern Airways, easyJet, Jota Aviation, Jet2.com, Loganair, Ryanair, TUI Airways, Titan Airways and Virgin Atlantic.

We are also a Council member of the Sustainable Aviation[1] (SA) coalition of UK airlines, airports, aerospace manufacturers and air service navigation providers. Sustainable Aviation has separately submitted detailed evidence to this inquiry, into which we have provided input, and endorse.

We welcome this opportunity to provide evidence to the Environmental Audit Committee’s inquiry and would be glad to support with further written or oral evidence as needed.

Executive Summary

•                                                                                                UK airlines are committed to achieving net zero emissions by 2050. In February 2020, UK aviation was the first national aviation group globally to commit to be net zero by 2050[2]. We recognise that failure to decarbonise aviation is not an option and that immediate action is needed to enable a sustained reduction in aviation emissions over the coming, critical years and decades.
   
•                                                                                                We do not agree with the consultation summary that reducing demand for air travel represents the most ‘cost-effective’ method available for ‘maintaining current emission levels’. UK aviation has a credible pathway to decarbonise that enables us to continue to grow and meet growing passenger demand, within a carbon ceiling determined by the science. Moreover, aviation is a global sector. As demand for aviation continues to grow internationally (particularly in new and emerging markets overseas) our efforts must work alongside and support of a global push towards a common net zero carbon aviation goal.
   
•                                                                                                Our pathway to net zero will require investment in technological solutions that will drive down carbon emissions from aviation at source, including through the use of sustainable aviation fuels, new engine and airframe technologies, including hydrogen power, and other emergent technologies. Completing the current UK airspace modernisation programme is also critical, as an immediate way to reduce emissions through more efficient and smarter flying.
   
•                                                                                                Progress in the above areas is critical if we are to meet our net zero goal, but will also provide opportunities for thousands of new ‘green’ aviation jobs here in the UK, through exporting new technologies and expertise to the world, and through the emergence of new domestic industries. For example, a new UK sustainable aviation fuels industry will create new economic opportunities in industrial areas such as Ellesmere Port, Teesside, Humberside, Port Talbot, and Birmingham, which could absorb people and skills lost from other sectors affected by decarbonisation.
   
•                                                                                                Aviation growth and decarbonisation are not incompatible goals, and Government should support the sustainable growth of UK aviation given the considerable societal and strong economic benefits aviation brings to the UK. In 2019, the UK aviation industry directly employed more than 536,00 people, according to recent research[3]. When including inbound tourism, this number rises to over one million. One in four Westminster constituencies estimated to have more than 1,000 people directly employed in the sector – for airports, airlines, aerospace companies and their direct supply chains.
   
•                                                                                                For UK airlines and the aviation sector to achieve net zero by 2050, this will require stronger partnerships between Government, the sector and technology partners to ensure that the technological breakthroughs in green aerospace technology, sustainable aviation fuels and carbon removal are fully maximised. We welcome the Jet Zero Council as a step towards achieving these net zero aims, but the Council’s work must continue to be strengthened in coming years to guarantee the opportunities available for the UK.
   
•                                                                                                With the right amount of Government support in the right areas the industry can successfully decarbonise whilst continuing to provide valuable jobs and services to people and businesses across the country.

UK Aviation’s decarbonisation commitment and priorities

The Sustainable Aviation coalition (SA) is targeting at least an overall 15% reduction in net emissions relative to 2019 by 2030[4], and a 40% net reduction by 2040, with the pace of decarbonisation ramping up as key technologies and practices become mainstream in the 2030s. These include sustainable aviation fuels (SAF), permanent carbon removals, and new low and zero-carbon technologies – such as electric and hydrogen-powered aircraft. See below the latest aviation emissions reduction pathway from SA:

Figure 1 - UK Aviation's interim targets to achieving net zero emissions by 2050[5]

There are five critical delivery areas that will be essential to achieving net zero flight:

• Government must deliver key policies this year to support a UK SAF industry and commercialise SAF usage, with potential for up to 14 UK plants generating sustainable fuel from household and industrial waste by the middle 2030s, supporting at least a 32% reduction in emissions from UK aviation by 2050.
• The development of hybrid, electric and hydrogen-powered aircraft through increased and extended funding for the Aerospace Technology Institute.
• The completion of vital airspace modernisation generating significant carbon savings through more efficient flying and shorter journey times.
• Policies that incentivise the commercialisation of carbon removal technologies that enable carbon neutral or carbon negative aviation fuel, allowing the aviation industry to address any remaining residual emissions.
• UK Government to seek a more robust international commitment for aviation carbon reduction at the ICAO General Assembly in 2022, ensuring emissions are reduced across the globe and not exported from the UK. A global solution for a Global industry.

Answers to Questions:

What contribution can operational efficiencies make to reduce emissions from aircraft / shipping vessels and over what timescale could these have an effect on emissions?

The completion of the UK’s airspace modernisation programme, by 2033, will have an immediate effect on emissions. A modernised airspace will allow for more efficient flying, reducing the need for airborne holding before landing and will produce shorter journey times with less fuel used. Modernising UK airspace and enabling more efficient flight profiles offers perhaps the greatest opportunity to reduce UK aviation emissions in the immediate term.

Current aircraft capabilities far exceed the operational opportunities due to outdated and old technological constraints to the airspace. Our Airspace is critical national infrastructure that is essentially running on 1950s technology. Creating more streamlined and efficient airspace benefits airlines and airports by providing for a larger capacity of traffic, and through reducing fuel costs. A modernised airspace also benefits passengers and airport communities through reduced emissions and noise.

This programme is expected to account for around 5% of the SA decarbonisation pathway commitment, which adds up to 3.1 Mt CO2 saving per annum from better air traffic management and operating procedures by 2050.

However, the impact of the Covid-19 pandemic on UK aviation, particularly the financial impact across the sector, puts the future of UK airspace modernisation at risk. In March, Government announced up to £5.5 million investment[6] to aid the industry’s work to modernise UK airspace. With this recent support, airspace modernisation can continue to move forward and help to deliver better environmental performance. Nonetheless, along with industry partners and SA, we are concerned about the risks for delivering the UK airspace modernisation programme if this Government support is not sustained and built upon in the next few years.

How close are zero carbon fuels to commercialisation for aviation / shipping? How effective will the Jet Zero Council be in catalysing zero emissions technologies? What role should transitional fuels such as alternative hydrocarbon fuels play?

Sustainable Aviation Fuels (SAF) should not be seen as purely a transitional, or a temporary solution. As is demonstrated in the SA diagram below, the potential for electric and hydrogen turbine technology in commercial aircraft by 2040 is up to around 7000km - significant for short-haul commercial flights. However, most of the UK’s aviation carbon emissions are from long-haul routes. With current and upcoming technology, there are currently no realistic options that will be able to deliver low or zero carbon flight for long haul other than through use of SAF.

Additionally, should a commercial medium-range hydrogen powered aircraft become available in 2035, for example, it is unlikely that all global fleets would immediately transition into that model. Therefore, SAFs will play a critical role for some time and indefinitely for long haul flight.

Figure 2- Sustainable Aviation Fuel technology potential by 2040, from Sustainable Aviation

SAFs are ‘today’s technology’. With current SAF technology, the global aviation industry has certified 7 ways for use of up to a 50% blend and is pursuing the capability for 100% Synthetic fuel flight. Over the last decade, SA has been engaged with the global industry and has produced the first Sustainable Aviation Fuel Road-maps[7] that set out the considerable opportunity for these low carbon fuels to decarbonise UK aviation.

With the right Government support over the next few years the UK can build a world leading SAF industry, with up to 14 UK-based SAF plants by 2035 bringing tens of thousands of jobs and £billions in GVA to former industrial regions of the country in seven clusters. SA has set out these job opportunities, below:

Figure 3 - Jobs in the Sustainable Aviation Fuel industry, from SA

However, today UK SAF industry development remains too slow, and will need significant acceleration to achieve its aims - currently SAF usage in the UK is less than 1% of demand. The Government has begun to implement positive incentives for UK SAF development and production, but these are significantly lower than, for example, US equivalents.

UK aviation is urging Government to set out a comprehensive policy framework for commercialising sustainable aviation fuels, alongside finance mechanisms that will be critical to delivering first-of-a-kind UK SAF plants and secure ourselves as world-leaders in this important and emergent industry – these are covered in more detail in the next question.

What new technologies are there to reduce emissions from aircraft / shipping vessels and how close to commercialisation are they?

Industry has highlighted two key emerging propulsion technologies for aircraft - Hydrogen and Electric. As explained in the previous answer, these will be able to operate on short and medium length routes with SAFs being used to replace fossil fuels on long-haul flights.

How should the Government’s net zero aviation strategy support UK industry in the development and uptake of technologies, fuels and infrastructure to deliver net zero shipping and aviation?

Airspace modernisation: It is vital that airspace modernisation remains a priority and any potential restrictions or delays are quickly identified and resolved. Government must ensure it continues its financial commitment to this programme – especially at a time when industry has been so badly affected by the Covid-19 pandemic.

Sustainable Aviation Fuels: With the correct Government support the UK can grow a world-leading sustainable SAF industry, with up to 14 UK-based SAF plants by 2035 bringing tens of thousands of jobs and £billions in GVA to former industrial regions of the country in seven clusters.

However, this is time critical as the EU and US are already providing more support to their sectors, so it is imperative that the Government sets out a comprehensive policy framework for commercialising sustainable aviation fuels as soon as possible. This may include finance mechanisms such as loan guarantees or Green Bonds that will be critical to attractive the private investment needed for delivery of the first generation of UK SAF plants, which can each cost several hundred million pounds.

Moreover, any SAF mandate (currently being consulted on by the Department for Transport) will not in and of itself fix the ‘price gap’ that currently sees SAF cost around five times as much as ‘fossil’ jet fuel. Proving price certainty and, critically, a competitive SAF markets for the end-user – i.e., airlines – will be critical to commercialising SAF and increasing uptake.

Aerospace Technology: Technologies such as hybrid aircraft and longer-term technologies using electric and hydrogen propulsion give the prospect of exciting opportunities to decarbonise aviation. Ensuring the UK makes the most of this opportunity and maintains our historic world-leading place in the sector, will involve sustaining the public funding on innovation projects in this area.

This is currently enabled through the Aerospace Technology Institute (ATI), including their exciting ‘Fly Zero’ project. Increased investment in the ATI is now needed to enable the technological innovations that will make net zero flight a reality.

Hydrogen power has the potential to make huge strides towards decarbonising regional and medium-range commercial flights, but this will require the UK to have a robust hydrogen policy and strategy that enables the production of green hydrogen in the volumes required by the industry alongside other sectors such as domestic heating.

The ATI programme is currently running to March 2026, and budgetary commitments are already being made out to this point. An extension and expansion of funding will be vita if the ATI is to continue to fulfil its remit and support clean growth and the UK’s aerospace sector.

What is the most equitable way to reduce aircraft passenger numbers (e.g., reforming air passenger duty and taxes, frequent flyer levies, bans on domestic flights where trains are available, restrictions on airport capacity)? Are there any policy mechanisms that could reduce our reliance on shipping?

Fundamentally, we do not believe that aircraft passenger numbers need to be reduced in order to meet sustainability goals – and nor is this a pathway set out within the Government’s current Jet Zero Strategy consultation. SA has assessed that UK aviation can grow by around 60-65% in 2050 compared to 2019 whilst still meeting the commitment to net zero by 2050 and with emissions assumed by Government and by the Committee on Climate Change.

As highlighted earlier in this response, UK aviation delivers considerable economic and societal benefits to the UK. The appropriate route is to enable aviation to continue to contribute to the UK and to continue to grow, with demand suppressing measures only applied if the sector is unable to decarbonise within a ‘carbon ceiling’ determined by the requirements of the science and by the UK’s overall net zero carbon trajectory.

Any attempts to reduce aviation’s carbon footprint here in the UK must also recognise that aviation is by its nature a global industry - emissions from global aviation are 17 times those of the UK. Therefore, the best course to deliver our local and global decarbonisation goals is to invest in the solutions that will enable delivery of net zero aviation and international cooperation, rather than undermine the UK’s competitiveness without impacting on the wider picture and aviation emission levels across the world.

The two charts below show how SA’s gross and net emission pathways compare to the DfT high ambition gross scenario and the UK Committee on Climate Change’s (CCC) sixth carbon budget[8]. Balanced Pathway scenario:

Figure 4 - CCC, SA and DfT central scenario gross emissions trajectories, from SA

And then the DfT lower and higher net emission trajectories as well as the CCC net emission pathway using greenhouse gas removals.

The CCC’s recent specific aviation policy recommendations now show much closer agreement with Sustainable Aviation’s own analysis, in particular by recognising a much bigger role for SAF in reducing emissions by 2050. The new SA forecast for both gross emissions (actual aircraft emissions) and net emissions (aviation emissions after greenhouse gas removal and carbon trading schemes such as UK ETS, EU ETS and CORSIA are taken into account) are similar or lower than that assumed by the CCC in their 6th carbon budget analysis to around 2030.

SA is encouraging the Government to stay focussed on enabling technology solutions and implementing international policies that reduce aviation emissions as a priority and only if these solutions do not result in UK aviation meeting the net zero emissions trajectory should alternative interventions be considered. Mitigation action – i.e., demand management through unilateral UK taxes or levies - should only be required if the industry performance goes above the upper trajectory line.

For example, taxation should be seen as a measure of last resort to address carbon emissions. This is because aviation takes place in a global marketplace, so any UK specific tax measures risk putting UK aviation companies at a disadvantage to non-UK companies. Since its inception, SA has cautioned against the role of unilateral aviation taxes as an appropriate or cost-effective means to deliver or drive aviation decarbonisation, compared to alternatives that seek to deliver genuine in-sector reductions through the delivery of innovative new technologies, working alongside carbon pricing and effective carbon market-based measures (MBMs) like the new UK ETS and global CORSIA scheme.

Ultimately, investment in new lower emission technologies, use of sustainable fuels and airspace modernisation will have a larger impact at reducing aviation emissions globally, not just in the UK. Further taxation for flights leaving the UK risks problems such as carbon leakage, where people choose to buy cheaper flights outside the UK, that avoid UK taxes, but in doing so support flights over longer distances than direct flights from the UK, thus creating more carbon.

SA continues to encourage the Government to work with the industry, through the Jet Zero Council to support a green recovery of the UK and aviation that nurtures a leadership position and accelerates progress at a global level to decarbonise aviation.

What further action is needed by the International Civil Aviation Organization and International Maritime Organization to drive emissions reductions? What can the UK Government do to drive international action on emissions?

The Committee on Climate Change[9] recognises aviation is a difficult sector to decarbonise and should be eligible to address residual emissions once all efforts have been made to minimise emissions through access to carbon removal solutions. High-quality offsetting will have a role if we are to reach net zero aviation. The CCC say 60-110 Mt of removals will be needed for the UK’s emissions per year by 2050.

As previously mentioned, due to the international nature of aviation, decarbonising requires international cooperation and solutions, and UK leadership is vital to this effort. The UK must lead on finding a clear, long term CO2 target for global aviation to be agreed at the 2022 ICAO Aviation General Assembly.

Through CORSIA UK airlines will pay billions of dollars to fund carbon reduction through high-quality, independently verified carbon offsets, whilst also being incentivised to reduce emissions ‘at source’ through the effective functioning of the carbon market. We should use our hosting of COP26 as an opportunity to drive support for global action and investment in aviation decarbonisation, through both supporting technological solutions, but also through CORSIA.

How effective will the global offsetting scheme for international airlines (ICAO’s CORSIA) and the UK and EU ETS be at stimulating technology improvement and/ or behaviour change to reduce emissions from aviation / shipping?

UK leadership within the international community will be necessary in pursuit of a clear long-term CO2 target for global aviation. An international agreement can be highly effective at helping to reduce aviation emissions, alongside current schemes including the EU and UK Emissions Trading Schemes, which must be coordinated and avoid undue complexity.

UK airlines, along with SA, industry, governments, and climate science, have consistently advocated for carbon pricing and effective market-based measures as an essential lever to drive a reduction of emissions in the sector instead of specific taxes targeted only at air transport in individual countries. Mandatory regulation that harnesses the power of markets will seek emission reductions where they can be made most cost-effectively and applied equitably in air transport markets to avoid competitive distortion and carbon leakage.

To achieve the first requirement - environmentally and cost-effective emissions reduction – policies measure must allow access to a range of abatement options in multiple sectors and countries. This market-based approach means that the cost of emissions reductions is established by projects that are most able to generate them. This means that airlines and their customers pay no more than necessary for meaningfully achieving carbon targets. Over time, as global structures to support carbon pricing mature, the cost of carbon can be expected to increase.

The second requirement – equity – is achieved by carefully designing the scope and rules of the policy measure with the objective that all airlines face equal treatment. Market distortion will occur where the cost per tonne of CO2 of a policy measure is different between different airlines, leading to carbon leakage and potential increase in net emissions. In air transport markets this can affect simple point-to-point markets as well as indirect transfer markets.

The global CORSIA and EU Emissions Trading System (ETS) policy measures both achieve these requirements to a large degree, which is why they are preferred over unilateral national taxes targeted only at air transport and introduced in individual countries. It should be noted that progressively applying a carbon price through market-based measures to UK aviation emissions, that rises to around £220 a tonne of CO2 by 2050, is estimated to reduce demand for flying, reducing CO2 emissions in 2050 to around 67 million tonnes. This has been built into our UK aviation demand baseline.

How should the UK define its ownership of international aviation and shipping emissions (i.e., arrivals, departures or both) in order to include them in legislative targets?

The scope of the SA Road-Map includes airborne and ground based CO2 emissions from domestic flights within the UK and gate-to-gate emissions from international departures (i.e., from UK airport to non-UK destination airport) and excluding overflights. This approach is consistent with previous Road-Maps and the convention of CO2 emissions reporting to the UNFCCC.