Herculean task: Decarbonization of aviation required
Investing over $5 trillion by 2050
Hamburg (ots) –
– Reducing the carbon footprint in aviation requires interaction
Technology, fuels, operations and politics – and high investments
– Transformation costs amount to around 5.1 trillion US dollars (~4.4
trillion euros) – “business as usual” would be even more expensive
– Scaling sustainable fuel production is the biggest lever – but not
sufficient
– Emissions trading is only a transitional instrument – Airlines should not take off
miss
– Passenger volume continues to rise – and with it demand
Net zero challenges
Aviation is faced with a herculean task: it is one of the industries in
which find it most difficult to achieve global climate neutrality targets by 2050
to reach. The requirements required by 2050 are correspondingly high
Investments. However, “business as usual” would result in even higher costs
tied together. This is the result of the world’s most recent aviation study
leading credit insurer Allianz Trade.
“Decarbonizing aviation will not be a cheap undertaking. Im
The opposite: According to our calculations, this will require investments of by 2050
about 5.1 trillion US dollars (~4.4 trillion euros)[1]”, says Maria Latorre,
Industry expert at Allianz Trade. “It’s heavy baggage. But it’s a persistence
The current status quo would mean an estimated eight for the companies
Trillion US dollars[2] even more expensive.”
In 2023, air traffic produced around one gigaton of carbon dioxide
(CO2) – this corresponds to about 2.5% of all man-made direct and
indirect CO2 emissions, including land use changes such as
Example through deforestation. If you also take into account non-CO2 impacts like
Contrails and nitrogen oxides, the sector’s share of global emissions is increasing
Warming to around 6%, underscoring the scale of the challenge.
No solo flight: Large footprint requires interaction from many areas
“This herculean task is not a solo flight. It takes many people to complete it
Gears interlock,” says Latorre. “The reduction of the currently large
Carbon footprint in aviation requires a comprehensive package of measures that
includes technology, fuels, operations and politics.”
An important pillar is the use of sustainable aviation fuels. With that you can
CO2 emissions can be reduced by 60 – 90%.
“The good news is: they are compatible with existing fleets,” says
Hazem Krichene, senior climate economist at Allianz Research. “The bad: Currently
they only cover a minimal proportion of global demand. And with one too
“Scaling up, sustainable fuels won’t solve the problem alone.”
Scaling Sustainable Aviation Fuels (SAFs)
requires significant investment in renewable energy, diversified
Raw materials and large-scale production facilities, supported by clear and
stable political guidelines.
Emissions trading is only a transitional instrument – airlines should not take off
miss
Emission certificates, as market-based mechanisms, can also contribute to
to close the emissions gap. Currently the costs are to get one
to compensate for the increasing share of international emissions (still)
comparatively low. However, this could happen in the coming years
increase significantly, which will lead to greater burdens on airlines
should.
“Emission certificates are currently still cheaper than that
Introduction of sustainable fuels,” says Latorre. “So that’s where it bites
Cat still in the tail. An increase in cumulative costs with impact
on the operating margins of the airlines or ticket prices is likely here
but create greater pressure to act.”
Overall, such market-based mechanisms serve as transitional instruments. She
allow airlines to offset unavoidable emissions
and at the same time provide incentives for long-term investments in sustainable
To create fuels and low-emission technologies that both
Compliance with the requirements as well as the sustainable growth of the sector
supports.
“The companies should accelerate slowly and take off on time
not to be left behind in the end,” says Krichene.
High investments necessary – especially in renewables and fuel production
Overall, the aviation industry will have investments of around 5.1 by 2050
Trillion US dollars (~4.4 trillion euros), mostly renewable
Energy (40%) for synthetic fuel production and supply
future hydrogen or electric aircraft. Another 38% need to increase
used in SAF production, while 16% goes to CO2 capture and
Electrolysers and the remaining 6% on next generation aircraft
omitted.
The decarbonization of aviation also depends on the acceleration of
Modernization of aircraft and next generation innovations. This
is lagging behind due to enormous delivery backlogs. The average age of the
As a result, aircraft and waiting times have reached a record 15 years
now total almost six years.
Retrofitting older jets offers short-term efficiency gains. With the
Current technology could increase fuel consumption and emissions
be reduced by around 20% in 2050. For meaningful decarbonization and that
However, achieving net zero targets requires new aircraft.
Joy and sorrow at the same time: passenger volumes continue to rise
The continued increase in demand also plays an important role
of decarbonization.
“The increasing demand is both joy and sorrow for the industry,” says
Latorre. “On the one hand, increasing demand is good for the sector,
on the other hand, this poses an even greater challenge for the
Net zero goals. This would be particularly true on shorter domestic routes
Modernization and expansion of high-speed rail networks is a real one
Alternative and sensible addition.”
Global demand for flights is expected to increase significantly and
Passenger numbers are expected to reach 12.4 billion by 2050. In
Growth in Europe will be more moderate – 1.19 billion
passengers in 2023 to 1.81 billion in 2050. But even this
Increase of 52% poses a challenge to net zero targets.
There is considerable potential for savings, especially on short journeys: the planned one
Expansion of the European high-speed rail network as well as the very fast ones
Almost 50,000 kilometers of railway lines by 2050 – a need for investment
of over 890 billion euros – could partially replace domestic and European flights and
thereby significantly reducing emissions.
The full study can be found attached or here:
https://bit.ly/48GpYRv
Allianz Trade is the global market leader in credit insurance and
Recognized specialist for sureties and guarantees, debt collection and protection
against fraud or political risks. Allianz Trade has more than 100
years of experience and offers its customers comprehensive financial services,
to support you in liquidity and receivables management.
Tracked and analyzed via the company’s own monitoring system
Allianz Trade Group reports daily insolvency developments of more than 83 million
small, medium and multinational companies. In total they include
Expert analyzes markets accounting for 92% of global gross domestic product (GDP)
omitted.
With this expertise, the Allianz Trade Group makes global trade safer and more secure
gives over 70,000 customers worldwide the confidence they need in their business
and their payment. As a subsidiary of Allianz and with an AA rating
Standard & Poor’s is the holding company of Allianz Trade based in Paris
In the event of damage, the financially strong partner is at the side of its customers.
The company is present in over 40 countries and employs more than 5,800
Employees worldwide. In 2024, the Allianz Trade Group generated one
consolidated sales of EUR 3.8 billion and insured worldwide
Business transactions worth EUR 1,400 billion.
Further information at http://www.allianz-trade.de
[1] The estimate (cumulative investments) includes the decarbonization of the
entire industry, including all parts of the value chain, e.g. b.
SAF production, renewable electricity, carbon capture and new
Drive systems.
[2] The amount of $8 trillion represents the cumulative cost of
the pricing of CO2 emissions caused by the aviation sector
“Business-as-usual” scenario would have to be borne if there were no climate protection measures
would be implemented. It is not related to penalties for the offense
certain goals. Rather, it reflects the amount the industry spends
their predicted CO2 emissions between now and 2050 in the form of
would have to pay CO2 taxes or CO2 pricing systems. The calculation is based
on the expected emission quantities for this period and one
average CO2 price of $176 per ton.
Note Regarding Forward-Looking Statements
The information contained in this release may be forward-looking statements
Expectations and other forward-looking statements contain current statements
Estimates and assumptions of the management are based, and known and
contain unknown risks and uncertainties due to which the
actual results, developments or events differ from those stated herein
Statements may differ significantly. In addition to forward-looking statements in
respective context reflects the use of words such as “can”, “will”,
“should”, “expects”, “plans”, “intends”, “believes”, “estimates”,
“predicted”, “potential” or “continue” are also one
forward-looking statement. The actual results, developments
or events may differ from such due to various factors
forward-looking statements may differ materially. Such factors include
inter alia: (i) the general economic situation including the
Industry-specific situation for the core business or core markets
Allianz Group, (ii) the development of the Financial markets including the
“Emerging Markets” including market volatility, liquidity and
Credit events, (iii) the frequency and extent of those insured
Loss events including those resulting from natural disasters
result; In addition, the development of damage costs, (iv) cancellation rates, (v) extent
loan defaults, (vi) interest rates, (vii) exchange rate developments
including the EUR-USD exchange rate, (viii) development of the
Intensity of competition, (ix) legal and regulatory changes
including those relating to monetary convergence and the European
Monetary union, (x) changes to the monetary policy the central banks or
foreign governments, (xi) impact of acquisitions, including
the associated integration issues, (xii) restructuring measures,
and (xiii) general competitive factors in each local,
regional, national or international framework. The
The likelihood of many of these factors occurring can be caused by terrorist attacks
and whose consequences continue to increase. The company does not cover any
Obligation to update forward-looking statements.
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