Will the United Nations' aviation organization back airlines’ call for a carbon net-zero goal by 2050? ATW Editor-in-Chief and Aviation Week Network Group Air Transport Editor-in-Chief Karen Walker and CAPA Senior Analyst Lori Ranson discuss.
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Rush transcript
Karen Walker:
Hello, everyone, and thank you for joining us for Window Seat: Aviation Week Air Transport Podcast. I'm Air Transport World and Group Air Transport Editor-in-Chief, Karen Walker. Welcome on board. And this week, I am joined by my colleague Lori Ranson, who's the Senior Analyst Americas at CAPA. Hi, Lori, and thank you so much, again, for joining me today. So as we speak today, the 41st General Assembly of the International Civil Aviation Organization, or ICAO, is in its second and final week of meetings at the ICAO's headquarters in Montreal, Canada. The ICAO Assembly is held every three years, and this is the first one since the pandemic outbreak. And it's a very interesting one. Why? Because some 2000 ministers and high ranking government officials from 167 states are joining this year's meetings to, of course, address key air transport issues. But on top of this list, without any question, is sustainability.
More specifically, can the assembly agree to a global aviation goal to achieve net zero carbon emissions by the year 2050? And that's exactly what the industry is now watching very closely. To be clear, the World's Airlines made a commitment to net zero by 2050, at the annual meeting of the International Air Transport Association, or IATA, in Boston last year. Now IATA represents almost 300 of the World's Airlines. So that was a historic and important statement of how strongly they feel about sustainability and cutting emissions. So the airlines have set the groundwork for ICAO, but the importance of an ICAO agreement is that this is where the world's governments come in. ICAO can't mandate national laws, but the decisions taken by the ministers and government officials at the assembly will have considerable influence on their country's policies. Now Lori, you and I have been tracking this sustainability and net zero goal issue for some time. And we both joined an IATA media call on the eve of the assembly, when Director General, Willie Walsh, set out his hopes for the outcome of this meeting. What was Willie's key message?
Lori Ranson:
His key message was, if ICAO does not reach a consensus, that it would be pretty much a failure. That was his language. And he also said it would be a huge disappointment. And his reasoning for why it would be a failure is, since ICAO has its assembly every three years, there's no time. We need to get started on meeting these targets now, and we can't wait another three years. So that was his reasoning. And I also think that getting ICAO to agree to this target now would help jumpstart financial support for the development of SAF. ICAO doesn't offer financing, but if you have the governments coming together and endorsing this, it sends a message that we're committed to this. We want to start to create the infrastructure necessary, create the technology necessary, to get to this goal of net zero by 2050. So he's really pushing the message, "We need this goal now so the industry can meet its aspirations, but also other countries can meet their aspirations as well."
Karen Walker:
So you just used the term "aspirations." And in fact, if you actually look at, because there was earlier meetings where they sort of proposed to ICAO what it was that they wanted achieved in the sustainability, and that was the key term. It's basically saying setting a long term aspirational goal to be net zero by 2050. What does that mean? Why are they using that term "aspirational?"
Lori Ranson:
I think they're using the term "aspirational," because some countries have different timeframes that they've submitted in their own climate action plans to achieve net zero. For example, China is 2060, Saudi Arabia is also 2060, I believe India is 2070. So I think they're inserting the term "aspirational" there, because some countries will achieve net zero faster than 2050. Some countries will achieve net zero at a slower pace. ICAO being a UN body, and it's a very diplomatic term, isn't it, to insert into that?
Karen Walker:
Exactly. That's right. So some people are already acknowledging that, by necessity, and as you say, because of diplomacy and because of different countries being at different stages, that there's, inevitably, even the best outcome here will be a compromise. The IART agreement was pretty straightforward, 2050. The Chinese airlines did raise, at that meeting last year, they did raise their concerns and said that they would prefer 2060, but in the end, the resolution that IATA went for was 2050. But they really need the governments behind them, behind that resolution, which is what they're seeking for from ICAO.
Let's just stop a little here and backtrack a little bit about ICAO and the assembly and how it works. I don't know how many of our audience is familiar with that. Like I say, it meets every three years at the Montreal headquarters. It is a very dry meeting. You've got lots of ministers and officials from all around the world, lots of protocols. So it's not one of those things where... This has been going on almost two weeks as we talk and you're not hearing announcements, you're not hearing news updates. But that's typical, isn't it, Lori?
Lori Ranson:
Yeah, it's very typical. And we were talking before that all of these organizations, all of these countries, they submit these working papers at the assembly. IATA alone submitted or sponsored 20 papers and IATA's just one organization that's attending. You've got the Airports Associations, that are attending and submitting their working papers. And the countries themselves, if they haven't submitted their climate action plans already, they're doing so during the event. So all of these things are taking place behind closed doors. ICAO members are going over these working papers, and it's all part of the process, I think, in terms of negotiations that are happening. So that's why you don't hear a lot coming from ICAO and why it may seem a bit mysterious, as to what's happening over the two week period that the assembly is happening.
Karen Walker:
Exactly. So it's not a surprise to already not be hearing, "Oh yes, big progress, big announcement." That's simply not how ICAO works. And so, it could be some time before, even if they get some sort of agreement, before we hear that and hear the details of it. But we have, of course, heard some opening statements from some of the key people there. One of them is the US Department of Transportation Secretary, Pete Buttigieg. What was he saying? It sounded to me like, in his opening statements, he was very much sort of pushing the fact that there will be a compromise, but a compromise on this scale, it would still be a very strong statement.
Lori Ranson:
So he really reiterated that we must together adopt this aspirational goal of net zero by 2050. And he alluded to, we understand that some countries are going to move at a different pace, but we must move forward in achieving this aspirational goal. And he used the term "aspirational" in his remarks, which was very diplomatic again. But he also actually touted the recent legislation that was passed in the US, that sort of incentivizes SAF production, the tax credits. He really pushed that in his opening statements as well. So he's also, I think, trying to shore up the US environmental policy, that was kind of diminished a bit in the previous administration. So that's why he's definitely pushing the climate agenda that the US has at ICAO and elsewhere.
Karen Walker:
And then, the ICAO Council President, Salvatore Sciacchitano, of course, he gave an opening statement too. Was that really, again, when it came to sustainability, was it the same message?
Lori Ranson:
It was interesting, because I'm looking at a quote from him here. And he says, "Mere aspirations are no longer sufficient where our climate and wellbeing of the planet and all of its species are concerned, urging all the countries to come together over the next 10 days to achieve that net zero target." So I guess that's pretty firm language from him. But again, I think the reality is, it's going to be a compromise, simply because these countries aren't going to change their own targets to achieve net zero. And the industry itself has to be diplomatic as well. Some industry officials have said, "Look, China has this goal of 2060. China's committed to it." Even Willie Walsh sort of alluded to that in his remark, saying, "We have no doubt that China will achieve its goals, its environmental goals, and they're really focused on it." So again, language has to be carefully chosen, in this regard, in terms of how the negotiations proceed.
Karen Walker:
Willie Walsh, in that briefing that he gave from Montreal, just before the assembly began, I actually asked him in that briefing, on a scale of one to five, with five being the most optimistic, how optimistic did he feel that there would be a 2050 agreement? And I know you were on that call too, and he answered four, four out of five. So that's pretty optimistic. But he also said, "But the issue itself is five, in terms of importance." So he wanted to underline that. But didn't he say something about essentially saying anything less than this even aspirational agreement would have to be considered a failure?
Lori Ranson:
Exactly. That was very strong. Anything less. And he also pointed out that, if ICAO fails to come to an agreement, it's not going to stop the industry in its path to net zero by 2050. Just reiterating the industry's commitment as well. So yeah, he was definitely sort of pushing for net zero. I was on a webinar, a couple of weeks ago, to talk about this as well. And there was a gentleman on there, and he said that he was more optimistic now than last summer, in terms of ICAO being able to come to a consensus. Because there is a "high level meeting," you can't see me, but I'm putting it in quotes. Because this is how ICAO works. There was a "high level meeting" during the summer, and this proposal of aspirational net zero by 2050 was sort of sent to the assembly as a recommendation. I think, industry is reasonably optimistic that this will happen, that ICAO will endorse this long term aspirational goal. Willie Walsh is right to, I think, put a four on it.
Karen Walker:
And so, let's go back to 2016, when another major... In 2016, when this came out, was considered very important for the industry. And that was the adoption of an agreement called CORSIA, which is a global carbon offsetting scheme for the World's Airlines. And that was very significant. And CORSIA, of course, is still it's being introduced in phases, but is happening. What's changed, as to why it's moved from that carbon offsetting focus to now net zero?
Lori Ranson:
Well, I think carbon offsetting is viewed by the industry as a temporary measure. It's the most immediate measure of or immediate sort of way that they can start achieving net zero. But the industry really wants to focus on SAF, which is the major driver, to achieve its environmental targets. And they want to push for the support of developing SAF. Offsets have also gotten sort of... Offsets also sort of get negative connotations, from a credibility perspective. A lot of people have questioned the credibility of offsets and if they are effective. And one thing that's been controversial about CORSIA, over the last year, is, what year do you use as a baseline? Because originally, it was going to be a blending of 2019, 2020 as the baseline, but obviously, 2020 traffic fell off a cliff.
And so, there's been some discussion about what year do you use as the baseline. And I believe that 2019 is going to emerge as the year that they use, in terms of going forward and how they implement CORSIA. So I think the industry is pushing for some strengthening of CORSIA again, because in the short term, offsets are the most immediate option to work towards achieving that sustainability goal. But CORSIA, obviously, gets a lot of criticism from the outside as well as not being effective enough.
Karen Walker:
So just to be clear, when we're talking offsetting, what people are talking about is, we're putting this much of carbon in the air when we operate, so we will take it out of the air somewhere else, which is things like new forestation projects and things like that. And as you say, from my understanding, the ICAO CORSIA criteria are very strong. So you do get good, what they call, good quality carbon offsetting. But we also know that, historically, there's been some pretty poor carbon offsetting schemes, that are not audited and et cetera, et cetera. And that's where that controversy has come out of.
But yeah, so they're talking about, in the assembly this year, of strengthening CORDIA. And so, strengthening the quality, et cetera, et cetera, and that certainly would be part of it. But the 2050 net zero goal is really dependent on other toolkits, isn't it? And you mentioned SAF, sustainable aviation fuel. That's the key, isn't it? How to get more SAF. And I think that's what they're trying to also get with the ICAO agreement is that governments go back therefore and work on their countries producing more SAF, getting much more of it, more affordable. Is that the right interpretation?
Lori Ranson:
Yeah. That's the way that I interpret it. So they can come back and say, "Well, we have this framework now. We can start the development of SAF." It's kind of a formal endorsement of SAF. And now we can go build the infrastructure, and ICAO can maybe sort of broker some relationships between countries and banks and financing. And so, it all comes back to having this agreement in place, because it sends a message to the larger global sphere that the industry and governments are very serious about this and they're willing to put in the effort to make this goal happen. And in order to do that, you need all the right tools in place to achieve that.
And obviously, from the industry perspective, SAF represents the bulk of the way that it's going to achieve its net zero goal. So SAF, I know, is playing a major role in the discussions occurring at ICAO right now. And one interesting point, to watch out in the future, is some people question, "Well, you have to make sure that the development of SAF is also environmentally friendly, that it does not contribute to climate change." And there are going to have to be some standards that are set, some harmonization that needs to happen, just to ensure that the whole process is credible.
Karen Walker:
Yep. That's also got a lot of scrutiny lately. And feed stocks, are they compete, are they taking away food supplies, et cetera. So there's a lot going on there. But it's interesting, the Biden administration in the US has made it a national goal to produce enough SAF to power all US aviation by 2050. And so, I think this is where countries are feeling, or the air transport industry, is feeling most hopeful that ICAO can get that push behind other countries to have similar goals with SAF. Let's just talk about some other discussion points and action points at this assembly.
Obviously, sustainability is the huge one, but it's not just about that. It's about across the board aviation and air transport issues, safety, security, everything else. There has already been one interesting development in this assembly, and that is that they've essentially ousted Russia from the General Council. So they took a vote, and because of what's been going on in Ukraine, they took that vote and Russia was not happy about it. But they maintained that vote. So Russia is no longer has that seat at the General Council. Was that a surprise, do you think, Lori?
Lori Ranson:
I don't think it was a huge surprise. I think there was some speculation going into the assembly that there would be some action taken with Russia. So this seems like a pretty sort of formal thing to do. I forget how many votes they needed, but they didn't get enough votes. Russia was quick to issue a statement through, I think, its formal press agency, that, although they're off this governing council, they still remain a member of ICAO and will adhere to ICAO's principles. So you can interpret that how you wish. But yeah, I don't think it was a big surprise, just given everything that's happened with the war in Ukraine. I don't think ICAO could ignore the Russia situation. And I think the countries voted, in terms of, not with their conscience, but voted in line with their principles, in line with their governments and how their governments view this situation.
Karen Walker:
And it was also some of the members did make the point that there are rules and compliances within the International Air Transport community, that so like airspace and respect for air fields and holding onto aircraft, holding onto lease aircraft, et cetera, et cetera, that are not in compliance. But I think the underlying, as you say, maybe not a surprise that they did it, but I think it just actually validates the importance of an organization like ICAO is that there is status there. And there is certain status to being on the higher level of an organization like that. And you risk that, if you don't comply. Well, Lori, thank you so much for your insights again today. And thank you to our listeners. Make sure you don't miss us each week, by subscribing to the Window Seat Podcast on Apple Podcasts or wherever you listen. And if you do listen on Apple Podcasts, remember that you can also rate us and provide feedback, which will help us select the topics you most want to hear about. So until next week, this is Karen Walker, disembarking from Window Seat.
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