The report outlines actions investors, aviation companies, and the sector need to take to achieve net-zero emissions by 2050, aligning with the IEA’s 1.5°C decarbonisation pathway. Aviation contributes 2.5% of global CO2 emissions, which could double by 2050 without intervention. Additional climate impacts from flying at altitude, such as contrail and cirrus cloud formation, increase aviation’s overall climate impact to approximately three times its CO2 emissions alone.

Actions for investors

Investors should engage with aviation companies, fuel suppliers, and policymakers to scale up Sustainable Aviation Fuels (SAF). Specific actions include setting short-, medium-, and long-term SAF targets, working in partnership with stakeholders, and ensuring the sustainability of SAF by avoiding biofuels from conventional, crop-based feedstocks. Additionally, investors should advocate for policy measures that support SAF scale-up, such as SAF incentives, fuel mandates, and carbon pricing.

Investors should also drive investment in SAF and new technologies, including alternative propulsion technologies (electric battery and hydrogen) and technologies that improve fuel efficiency. They should ensure aviation companies commit to aligning capital expenditures with long-term greenhouse gas reduction targets and the Paris Agreement’s 1.5°C objective. This includes reforming lobbying practices and engaging with policymakers to support decarbonisation policies.

Sustainable aviation fuels (SAF)

SAFs are essential for achieving the 1.5°C pathway, requiring a massive scale-up from current supply levels. Airlines need to set clear interim targets for SAF adoption and outline their plans for achieving them. Investment in SAF is crucial, with estimates indicating US$1-1.4 trillion needed by 2050. Policymakers must establish clear strategies to support this investment, including de-risking early-stage investments and providing long-term policy certainty.

Investment in SAF and new technologies

Significant investment is needed to develop new technologies such as synthetic fuels, electric aircraft, and hydrogen. Only 8% of aviation emissions reductions by 2050 will come from currently available technologies, necessitating investment in emerging technologies. Long-term offtake agreements can secure SAF supply and de-risk production investments. Government policies must support private investment through measures like co-funding, loan guarantees, and subsidies.

Demand management and behavioural changes

Demand management is critical for the 1.5°C pathway, requiring policy interventions and actions by aviation companies and investors. Key measures include keeping business travel at 2019 levels, capping long-haul leisure flights, and shifting demand to high-speed rail. These measures could avoid 225Mt of emissions by 2050, though without effective demand management, SAF adoption would need to be significantly higher.

Avoiding carbon offsets

Aviation companies should focus on actual emissions reductions rather than relying on offsets. This aligns with the IEA’s approach, which allocates negative emissions to the sector where they occur. Investors should push companies to set climate targets that phase out offsets and ensure any used offsets are high-quality. Companies should work towards decarbonisation without offsets or CCS to align with the 1.5°C pathway.

Complementing absolute emissions reductions with carbon emissions intensity metrics

In addition to absolute emissions targets, aviation companies should set interim and long-term carbon intensity targets aligned with the 1.5°C pathway. This allows investors to assess the adequacy of company targets and compare performance across different sizes. Standardised carbon reporting, particularly around intensity metrics, is necessary for rigorous and comparable assessments.

Recommendations

Investors should:

• Engage with companies to scale up SAF and invest in new technologies.
• Advocate for supportive policy measures.
• Focus on actual emissions reductions over offsets.
• Encourage transparency in capital expenditures and climate-related lobbying.
• Support demand management measures to limit air traffic growth.

Aviation companies should:

• Set and disclose ambitious SAF targets.
• Align capital expenditures with climate goals.
• Reform lobbying practices to support decarbonisation.
• Focus on actual emissions reductions, avoiding reliance on offsets.
• Adopt carbon intensity metrics for performance assessment.

Policymakers should:

• Establish clear, long-term strategies to support aviation decarbonisation.
• Implement policies to de-risk private investment in new technologies.
• Promote demand management through comprehensive transportation strategies and policy measures.