IATA Technology Pillar Analysis

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Introduction

In 2008 the International Air Transport Association (IATA) instituted four industry pillars aimed at achieving significant sustainable improvements in the aviation sector. These four pillars are in the areas of technology, improved operational services, infrastructure and positive economic measures. The current paper will examine the technology pillar in terms of its goals of achieving certain carbon neutral growth targets by 2020. This paper will examine the implementation of alternative fuels technology as a means to accomplish the IATA's mid-term objectives. Moreover, it will evaluate significant progress and obstacles in achieving these stated goals.

As part of this analysis, the following three elements will be covered. First, will be a summary highlighting the significance of the four pillars and recommendations on what needs to be in place for the emissions related targets to be achieved. Second, is an analysis of what has been achieved so far and upcoming projects. Third, will be how the alternative fuels target is going to be measured and an evaluation of whether its goals can be met by the mid-term implementation deadline. Some aspects of a PESTEL analysis may be included as part of this discussion. This analysis will focus on governmental and economic factors. This paper will have five sections. Sections three through five will examine each of the three elements enumerated above.

Overview

One of the major drivers of air pollution in the aviation industry, originates with the airplanes. Carbon emissions for jet fuel are reportedly the one source of global warming and that is growing the fastest. Unfortunately, such fuel also possess the fewest viable cleaner alternative options, at least in the near term. The range of options is limited because jet transportation has immense energy requirements (Waldheim 122). The use of jet fuel compounds the problem of climate change because its emissions are deposited directly into the Earth's atmosphere.

This problem is further complicated by the fact that the use of air transportation continues to rise in this increasingly globalized economy. The affordability of air travel has also increased as inflation adjusted fares are at the lowest levels they have ever been (Waldheim 122). These factors indicate that the adverse environmental impacts caused by the use of commercial jet transportation will not be alleviated anytime soon.

This problem is further compounded by the fact that most industrialized countries have historically overlooked the contribution of air travel to global climate change. In this context, there is growing opposition in the environmental movement to the use of any air transportation at all (Waldheim 123). In recent years, protests against the aviation industry have also extended to other negative effects of air travel such as contamination of the groundwater, further depletion of non-renewable resources, and increased noise pollution. With this said, this paper will focus on the quest for safe alternative fuels technology as a means to reduce carbon emissions.

ISSUE 1: FOUR PILLARS SUMMARY AND RECOMMENDATION

The IATA represents the commercial aviation industry. In 2009, this organisation adopted a goal of placing a cap of net carbon emissions from 2020 and further cutting overall net carbon emissions as measured in 2005 in half by 2050 ("A Global Framework" 9). This goal is based on a more short-term objective of fuel efficiency gains averaging 1.5 percent per year each year until 2020 ("International Air" 9; A Global Approach 3). The accumulation of these gains will aggregate into a 17 percent improvement during the period 2010-2020 ("Aviation and Environment" 7). It has been noted that these gains will be insufficient to achieve the longer-term targets set for 2050.

During 2007, IATA's commercial membership agreed to implement a four pillars strategy to address issues of climate change as impacted by the operations of the aviation industry. In June 2009, the organisation agreed to implement these climate change mitigation goals using short-term, mid-term, and long-term target schedules. To review, the four pillars are identified in the literature as operational improvements, infrastructure improvements, technological improvements, and economic measures (ATAG). These pillars inform the IATA's multi-layered pursuit of a carbon neutral future.

The expression carbon neutral growth could stand some clarification. Since the middle of the 20th century, compound air travel increases of 5 percent per annum, outpaced compound emissions increases, which were estimated at 3 percent per annum ("Fact sheet"). Moreover, during the two-year period ending in 2010, passengers carried grew by 7.3 percent. Over the same period, carbon emissions increased at the slower pace of 4.5 percent ("International Air" 28). Thus, carbon emission growth trailed air travel growth, although there was an increase in the absolute amount of carbon emitted.

The aviation industry's commitment to carbon neutral growth involves setting in place an absolute limit on net emissions. This must occur in spite of any anticipated expansions in passenger traffic. As a result, this involves disassociating historic growth trends in emissions and air traffic. The overall goal would be stalling future growth in carbon emissions at a pre-set level without any negative impacts on meeting the anticipated expansion in passenger traffic ("UNFCCC" 3). This will be a challenging undertaking.

Moreover, when the expression 'emissions growth' is used, its meant to indicate net growth in carbon emissions. This would mean that some part of the reduction in carbon could be accomplished by industry activities. An example of such activities would include decarbonising measures. At the same time, another part of the reduction could be achieved by non-aviation industry actors, such as stakeholders in other industry sectors. An important element of this, is that carbon reductions occurring outside of the aviation sector could still be financed by the industry. Were this to occur, then the resulting carbon emissions would still be included in the carbon offsets of what would be the equivalent in air travel-related carbon emissions. This procedure is sometimes referred to as an open Emissions Trading System ("Fact sheet").

Crucial analytical models for planning a program for accelerated aviation industry decarbonisation are provided for by McKinsey for IATA ("Aviation and Environment"; Pearce). Under this model, the four-part climate change schema can be translated into measureable mitigation goals. If no action were taken at all on reducing carbon emissions, then carbon pollution can be expected to increase from 515 MtCO2/per year to approximately 2,000 MtCO2/ per year during the period 2005-2050. The IATA 2050 target for net emissions calls for a 50 percent decrease from the 2005 emissions benchmark quantity.

Some researchers describe the IATA plan as one with a peak in emissions in 2020, followed by a plateau for a period of two decades, and then a decline to the 50 percent level from the 2005 benchmark. These objectives are projected to be accomplished despite the aforementioned growth in air passenger traffic over the same period ("Beginner’s Guide" 23). What's more pertinent for this paper, is the 1.5 percent per year improvement in fuel efficiency by 2020. As the aviation sector is a notable long-term industry, it's possible to accurately project the composition of the air fleet by 2050 ("Aviation and Environment" 10). Thus, projections made during currently may hold some reliability for the future.

Three areas are already either being implemented or are in various phases of development. The industry is beginning IATA plan implementation by focusing on areas in the infrastructure, operations and technology pillars that can provide guaranteed gains in fuel-efficiency and carbon emissions reductions by 2020.

The IATA model has selected two areas of focus in improved load factors and fleet renewal. When combined, these two areas are expected to provide over 60 percent of the required 2020 emissions cutbacks ("Aviation and Environment" 14). The reductive efficacy of these areas will be optimized by 2020, but beyond that year, will not be sufficient to provide carbon neutral growth without additional inputs. This paper is not focused on post-2020 related issues, yet it's worthwhile to bear in mind the limitations of even the most successful pre-2020 carbon reduction efforts.

The three noted areas are critical to the carbon reduction program and will require support from official economic policy-makers. Applicable policy can be facilitating the process through carbon offsetting by way of market-based measures (MBMs) using carbon trading. Emissions trading would be used by the IATA as a temporary measure and estimates that the cost to offset 90 MtCO2 would be $7 billion by 2025.

ISSUE 2: CURRENT ACHIEVEMENTS AND UPCOMING PROJECTS

As noted above, this paper will focus on the development and deployment of alternative fuel technology to assist in the abatement of carbon emissions by 2020. There are three main types of alternative fuels under serious consideration and all are currently deployed to some degree ("Why We" 12). The first are traditional jet fuels based on burning fossil fuels and derived from such sources as crude oil, tar sands or shale oil, and condensates of natural gas.

The second type are Fischer Tropsch synthetic fuels. These fuels are produced by means of a group of processes that alters a carbon monoxide-hydrogen blend into a hydrocarbon liquid. The process was developed by two German scientists during the 1920s (("Why We" 12). Examples of such kinds of fuels are liquefied coal, liquefied natural gas, and liquefied biomass.

The third and final type of fuel are the biomass-based bio-fuels. Examples of bio-fuel sources include first generation food crops, natural waste of a secondary type, and specially cultivated biomass such as jatropha, algae, and camelina. This type of fuel source is highly sought after by industry advocates for its indicated efficacy to substantially reduce carbon emissions.

The alternative fuel options with the lowest carbon emissions relative to jet fuel include liquid hydrogen sourced from water and nuclear power plants and biofuels. The remaining options all have relative carbon emissions that are significantly higher than the existing option, such as methanol from natural gas, jet fuel produced from coal with carbon dioxide sequestration, jet fuel produced from coal, methane liquid produced from coal, and hydrogen fuel produced from coal ("Why We" 14). Only one other option has carbon emission lower than jet fuel, liquid methane produced from natural gas. However, the level of reduction is not significantly lower and has a weaker emissions reduction impact than biofuels.

Thus upcoming projects in fuel technology center around the further development of biofuels. These fuels have certain advantages ("Why We" 15). Biofuels can be cultivated using wastewater or even polluted water, they can be cultivated in soils with low viability, and they can achieve a high yield of energy. As a result, biofuels meet certain IATA sustainability requirements for use in aviation. These requirements include providing substantial net carbon reductions over their use lifecycle, not competing with other stakeholders for freshwater use, not competing with food producers for necessary resource inputs, and not causing widespread damage to the ecosystem.

Biofuels have so far been implemented by a number of commercial airlines in their jet aircraft. Steele ("Why We" 17) and Steele ("Aviation and Environment" 28) have produced schedules showing the implementation of biofuel blends between 2008 and 2011. Airlines that have begun implementation of these fuels include Virgin Atlantic, Air New Zealand, Continental Airlines, KLM, Qatar Airways, United Airlines and Interjet. The types of aircraft biofuels have been deployed in includes B747-400, B737-800, B747-300, and Airbus A319 and A320. Most of the airlines have blended biofuels up to 50 percent of their fuels. However, in some case these carriers used biofuels blended at ranges of 20 percent to 40 percent. The types of biofuel-based sources include coconut and babassu, jatropha, camelina and camelina- jatropha-algae blends. Future projects include more widespread implementation of such fuels in the aviation industry to the level of 100 percent of fuel use in all air carriers.

ISSUE 3: ALTERNATIVE FUELS TARGET MEASURES AND EVALUATION

To review, alternative fuel target measures center on the development of 1.5 percent per year fuel efficiency and progress made towards carbon neutral growth by 2020. There are a number of political, economic and commercial challenges to the more widespread implementation of biofuels technology. These challenges include how soon biofuels can receive government certification ("Aviation and Environment"). The target for the viable commercial implementation of such fuels is 2015 at the earliest. Although, the most pessimistic implementation target would be 2021, which is somewhat later than IATA guidelines. Then there are two uncertainties to widespread use of such fuel technology. The first is the cost to produce and deploy such fuels commercially. The second is the influence that changes in oil price may have on the pricing of carbon

Political considerations center around support for governments to fast track aviation industry certification of alternative fuels. Also, the cost of research and development into biofuels could be mitigated with additional government funding support to explore further avenues of biofuel exploitation ("Aviation and Environment" 20). Then there are legal issues and fiscal models that could help or hinder expanded biofuels development and implementation. These issues include incentives provided by governments to invest in biofuel development. Biofuel development could be further facilitated by the institution of more favorable tax policies. Finally, would be the recognition of biofuels as a low carbon emission product under the ETS regime.

Governments are also hindering further development and implementation of such fuels due to the uncoordinated nature in which carbon emissions policy is being approached. For instance, a number of countries, such as the UK, Belgium and Ireland, are promoting carbon reductions through green taxation policy ("Aviation and Environment" 20). However, other countries, such as South Korea, Ukraine, and Japan are pursuing emissions trading. Each policy has its relative merits and detractors. A green or carbon tax is be a tax on pollution sourced from the consumption of fossil fuels. Therefore, the tax institutes a price to pollute and acts as powerful incentive to reduce emissions. However, those who oppose the use of tax policy prefer emissions trading. The carbon trading mandates the polluting firms that don't certain meet emissions targets to purchase unused carbon from outside firms. Those who support the latter policy typically prefer less government regulation in the emissions reduction process.

The environmental impact of biofuels is, as noted above, relatively minor. Indeed, the widespread implementation of such fuels can be undertaken in a manner that is in accord with sustainable principles and not in competition with small scale farmers. Also, as presented in this paper, the production process and exploitation of such fuels do not cause widespread harm to the ecosystem.

Works Cited

Air Transport Action Group (ATAG). UNFCCC Climate Talks: The Right Flightpath To Reduce Aviation Emissions. A position paper presented by the global aviation industry, 2010. Web. Retrieved from www.atag.org/component/downloads/downloads/72.html. March 14, 2014.

Air Transport Action Group (ATAG). Beginner’s Guide to Aviation Efficiency, June 2010. Geneva, Air Transport Action Group. Web. Retrieved from http://www.enviro.aero/Content/Upload/File/ATAG_BeginnersGuidetoAviationEfficiency_MIDRESO(1).pdf. March 14, 2014.

Air Transport Action Group (ATAG). Aviation: Benefits Beyond Borders, 2012. Web. Retrieved from http://www.aviationbenefitsbeyondborders.org. March 14, 2014.

International Air Transport Association (IATA). 2009. A Global Approach to Reducing Aviation Emissions, 2009. Web. Retrieved from http://www.iata.org/SiteCollectionDocuments/Documents/Global_Approach_Reducing_Emissions_251109web.pdf. March 14, 2014.

International Air Transport Association (IATA). A Global Framework for Addressing

Aviation CO2 Emissions: Frequently asked questions, 2010. Background paper prepared for the ICAO 37th General Assembly, 16-18 June, Montreal, Canada.

International Air Transport Association (IATA). Fact sheet: Carbon-Neutral Growth, June 2010. Web. Retrieved from http://www.iata.org/pressroom/facts figures/fact sheets/ pages/carbon-neutral.asp. March 14, 2014.

International Air Transport Association (IATA). International Air Transport Association Annual Report 2011. Web. Retrieved from http://20ebooks.com/read-online/annual-report-2011-tinternationalt-air-transport-113921d2c6f. March 14, 2014.

Pearce, B. Analysis behind the Air Transport Industry’s Global Sector Agreement on Climate Change, (2010): 6-7. Geneva, Switzerland: IATA.

Steele, Paul. Aviation and Environment. PowerPoint presentation prepared for IATA’s Post-COP16 (UNFCCC 16th Conference of the Parties, Cancun, Mexico) media briefing, June 2011. Web. Retrieved from http://www.atn.aero/content/p1083.pdf. March 14, 2014.

Steele, Paul. Why We Need Alternative Fuels. ICAO Alternative Fuels Workshop, Feb. 10, 2009. Web. http://www.icao.int/Meetings/EnvironmentalWorkshops/Documents/WAAF-2009/3_Steele.pdf. March 14, 2014.

Waldheim, C. "Airport Landscape," Log, 8, (Summer 2006): 120-130.