How should we understand the sustainable fuels agreements brokered at ICAO’s CAAF/3 conference? Listen in to hear from Haldane Dodd, executive director of the cross-industry Air Transport Action Group, who has been championing the need for this framework.

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Rush Transcript

Victoria Moores:

Hello everyone and thank you for joining us for Window Seat, our Aviation Week Air Transport podcast. I'm Air Transport World Europe and Africa Bureau Chief Victoria Moores. Welcome on board. This week I'm joined by Haldane Dodd, who is the executive director of the Air Transport Action Group, which is basically a cross-industry body representing lots of different companies and organizations across the aviation industry, acting on behalf of aviation sustainability. So welcome to the program, Haldane. It's great to have you here with us.

Haldane Dodd:

Thanks very much, Victoria. Good to see you again.

Victoria Moores:

So today Haldane and I are going to be discussing some sustainable aviation fuel developments, which have come out of a recent ICAO meeting in Dubai and as a quick recap, ICAO is the United Nations Agency for Aviation and they have just held their third conference on aviation and alternative fuels, which is called CAAF/3 and that was held in Dubai. Now these events only happen once every six years and I think it's quite important to notice that in ICAO language, a conference is quite a specific term. So it's a gathering of country-level diplomats who have decision-making power and the aim of this event was to create a global framework for sustainable aviation fuels or SAF. So Haldane, you've been there at the meeting in Dubai and, I'm curious, what was it like to be there and what were the outcomes that have been decided through this meeting?

Haldane Dodd:

Yeah, so I think for those of us who've worked in the business side of aviation, let's say the real operations and also just at an airline or an airport or so forth, sometimes things that happen at ICAO can be a little bit remote, a little bit outside of what we normally deal with. That's why you have bodies like my organization and other groups like ACI and IATA and CANSO and so forth, all of whom have the representation role of the industry at ICAO. So these events are negotiations. They're 193 states gathering together, trying to make standards and recommended practices or long-term objectives for how aviation can work together as an entire system to meet long-term objectives, and that's what this meeting was about. So every three years, ICAO has an assembly. It's the official and formal highest level body within ICAO and that brings together all the governments at a very senior level to try and deal with issues that are coming up, not only in the next three years, but in decades ahead.

Last year at the ICAO Assembly, we managed to get through the agreement of net-zero 2050 - being a global goal for the air transport sector. The industry itself, a year earlier, had already agreed for net-zero as a goal. We pushed that through, made sure that our governments were also on board with that and gave them a bit of responsibility in that process as well. So that's really important to make sure that we understand that it's not just the industry that is doing this. But it's industry and governments working together along with other stakeholder groups.

You need to figure out how you make that operationalized, after you've got a very overarching goal like that, and so one of the really important elements actually to get to net-zero in 2050 is going to be moving to sustainable aviation fuels, in particular, but other forms of cleaner energy as well and this conference, the CAAF/3, was really an attempt to try and fill in the details of how we're going to get there, because I think when you look at some of the other decarbonization pathways, things like moving to new types of technology aircraft, improving the technology of the aircraft that we have already, the new operational practices that we want to put in to make our flying more efficient, all of that stuff is more or less within the control of the industry and governments as well, but working together to make that happen. When it comes to SAF, we're going to need to have input from the finance sector. We're going to need to have input from the energy sector as well, so it's reaching outside of just the aviation ecosystem and bringing them and making them part of the story. And so having a goal in the long term for SAF deployment is a really important part of that process.

So what are the outcomes of CAF-III and what did we want to see out the meeting? Well, there are two main outcomes. The first is what's called the global framework for action and this is really a number of the enabling factors that sit behind any kind of goal. It's things like capacity building. It's things like technology transfer. It's the financing of developments in SAF around the world and that's really important because we want to make sure that this is not just something that is happening in North America or Europe or other developed economies, but that it's able to take place in developing countries and all over the world as well and, of course, ICAO as a UN body, has a really important role to play in that sense, because they can provide the capacity building, the knowledge transfer and so forth to those developing economies to make sure that they are equipped with what needs to take place when it comes to developing a SAF industry. One of the key parts of that is policy and I'm sure we'll get onto that later on. So that's the global framework, and then sitting within that is the ICAO vision, if you like, which is the goal in other words - it's a goal for SAF deployment.

Going into the meeting industry, as a collective, really wanted to have a 2050 goal in place. There was a lot of discussion around 2030 goal, as well, to really make sure that you have early action incentive, to really push development as fast as possible, and the outcome in that discussion was that we were going to have a goal of 5% reduction in the carbon intensity of the fuel that we use on average across the entire world by 2030, compared to straight fossil fuel by itself. So that's a little bit of a complex goal. I'm sure you’ll want to know exactly what that means in real terms. So if you look at the carbon intensity of the fuel that we use today, 99% of which is fossil fuel, it's around 89 grams of CO2 per megajoule used.

By 2030, the global average should be 5% lower than that and we can do that through the use of sustainable aviation fuel, through the use of lower-carbon aviation fuels to help bring down that average and of course, all the analysis has shown from the industry, from ICAO as well, that to get to net-zero by 2050, we're going to need to reduce that by around about 80% in order to almost completely replace our fuel supply with SAF. But for 2030, as an initial step, it's a -5% reduction and it gets us on the path and of course that's a global average, so it means that some countries, the United States, the UK, Europe, will be able to move faster in this area to deliver more of that global average. Other parts of the world need a bit more time to build up the capacity and so they will be at lower levels. But this is a global average. The most important thing is that it's not attributable to each individual state so that each state can take its own pathway to get there, because obviously some parts of the world need more help than others.

Victoria Moores:

Thanks for that overview of what was discussed at the meeting, Haldane. I know that this is an incredibly complex and nuanced topic and when we are dealing with aviation policy around things like sustainable aviation fuel, it gets complicated quite quickly. So what I'm taking from that is that we've got two components coming out of the ICAO agreement. So we've got this framework, which to me sounds like it's best practice guidance for states to really ramp up their sustainable aviation fuel industries and then separate from that, we've got this goal, this target, for 5% lower carbon intensity. I'm wondering in amongst that, as a representative of a whole load of industry groups, is there anything disappointing in terms of those outcomes that came out of the meeting?

Haldane Dodd:

Well, listen, I think the global framework is probably the most important part, because it helps to build SAF availability everywhere, and so that was to be expected to a certain extent, but it's really fantastic that we got all these countries on board with that. The fact that we got a 2030 goal, our 5%, is really impressive and important and I think the slight disappointment, if you like, is that the industry really wanted to try and have a 2050 goal as well to set that long-term trajectory. That wasn't possible at this stage, but actually one of the things that we did ask for that has been included is that we have regular reviews of these goals, regular reviews of the path forward, as well, so that we can keep looking at it, see what we need to do to adjust as we move towards 2030, 2040, 2050, and make sure that we are taking into account the latest analysis, the latest trends and so forth, and so that is included. You mentioned right at the start that the CAF meetings take place every six years. That's not necessarily written in stone and so we asked for the next CAF meeting to take place before the assembly after next, which will be in 2028, and that's been built into the discussions as well. So we're likely to have CAAF/4 take place in 2026 or 2027. So we'll be able to check in there, increase the ambition for later years. But obviously now it really sends a very strong signal to the finance community and the energy industry for 2030 that you're going to need to really get your house in order to make sure that we can start delivering significant quantities of SAF already by then.

Victoria Moores:

One of the other components of this alongside the SAF is the lower intensity traditional fossil fuels. So that's the LCAF, lower carbon aviation fuel. What's the industry's view on that because that is distinct from SAF, from sustainable aviation fuel?

Haldane Dodd:

Yeah, absolutely and we have been very clear to make sure that when you are talking about these things, you are talking distinctly - that LCAF is not seen as SAF - because LCAF is, yes, lower carbon aviation fuel. It is fuel, fossil fuel, that is produced with production techniques that can reduce the overall life cycle CO2 emissions of that fuel. So it might be reducing methane flaring during the production process, using renewable electricity to power refineries and various other things, taking CO2 out of the production process. But it is still fossil fuel. So it's not sustainable in the long term. But it does reduce CO2 emissions. So that is a good thing and whatever can be done to reduce CO2 emissions as fast as possible is to be encouraged. There are certain parts of the world, certain countries in the world that are very keen on lower carbon aviation fuel or LCAF being part of this discussion, obviously those countries that have significant oil industries at the moment. It should be part of the discussion and certainly as part of the outcome of CAF-III. But it is seen as just a transitional tool. So it's something that we can use in the next 10, 15 years before SAF production comes in real large quantities, and obviously by the time we get to 2050, we're going to need to shift more and more to SAF. LCAF, by the way, has on average around a 10% reduction in the CO2 emissions compared to straight fossil fuel, if you like, at the moment and so there is a reduction there. It is good. 10% is better than nothing. But it doesn't meet the 80% or 90% that we need to actually decarbonize the industry.

Victoria Moores:

But I guess it fits into that conversation about lower carbon intensity, which is what the objective is about that's just been agreed and how significant do you see these two decisions as being in the wider landscape of aviation sustainability, that transition to SAF?

Haldane Dodd:

Well, I think one of the key challenges that we have at the moment is building up supply of SAF. If you look at the amount of SAF that was produced and used last year, it was about 200,000 tons of SAF, which is better than nothing. But if we're going to get on the ramp up towards potentially 23 or 24 million tons of SAF in the next six years, there's a lot of capacity that needs to be built into that process. We need financing to make that happen. In fact, analysis that we've done shows that we're going to need about one and a half trillion dollars in terms of capital investment in SAF production between now and 2050 to get where we need to get to. So these are big numbers. They're actually relatively normal numbers when you look at the traditional oil and gas capital expenditure. The amount that they spend on capital expenditure every year dwarfs anything that we are asking for. But that's just normal fossil fuels obviously.

So we need to get the financing side of things on side and we also need to get the energy industry on side, the traditional energy industry, the big oil companies that we all know the logos of, and governments to help make the policy happen as well. What this does, by having this goal in place, by having the framework in place that was agreed last week, this sends a signal to that finance community that this is an area that you will be having to move towards. So you're going to need to start pulling out the checkbook and starting to finance these things. But it also sends a signal to governments as well. So we have seen policy actions in certain countries, but we're going to need to see policy come in around the world to help support SAF deployment, and so having this global ICAO goal doesn't by itself trigger that. But having that goal sends the signal to countries all over the world that they need to start putting in place the right policies, as well, to help meet that global goal.

Victoria Moores:

I guess the golden question is, do you think that the countries and the companies are going to listen to and respond to that signal?

Haldane Dodd:

Well, that’s an interesting thing. We've been going around for the last year as ATAG, going and talking to finance companies, to big banks because coming off the back of the net-zero agreement last year, we knew that we were going to need a lot of financing. The key thing that they want to see is policy action. They want to see de-risking of investments. But they also want to see certainty that the products that they're putting money into will be used and so this helps with that process and certainly sends a signal to the markets. From a government side, we're actually seeing some really interesting developments there. A lot of countries are understanding the opportunities that exist with SAF around the world. It's not just a burden. It's actually a real opportunity for them to develop green energy industries of their own, particularly a lot of developing countries that might have some really amazing feedstock resources when it comes to waste resources that can be used, for example, to produce SAF. They're looking at the opportunities that exist.

We did another study which looked at the fact that potentially 40 million jobs could be created or sustained by shifting to SAF, and these are jobs that are currently fossil fuel jobs, that if the entire global economy shifts away from fossil fuels, will need to find something to do. There's an infrastructure there if it exists already and at the moment, 90% of our energy as an industry comes from 22 countries. So if we can democratize that and bring those energy jobs to countries all over the world, that's a real opportunity for development as well.

Victoria Moores:

Excellent. So what we've got here is basically guidance for the countries that are looking to explore where they go next with this. It's coming from ICAO level and it's going to be a clear communication of where to next, creating that filling in the dots part between here and 2030 and in terms of making it actionable as well. That's all that we've got time for today. Haldane, thank you so much for coming and joining us. I know that it's an intense season for you in terms of conference participation, so appreciate you joining us and also thank you to our producer, Corrie Hit. Thank you finally to our listeners and make sure that you don't miss us each week by subscribing to the Window Seat podcast on Apple Podcasts or wherever you listen. Until next week, this is Victoria Moores disembarking from Window Seat.