Industry Goals and Measures to Address COCO22 Emissions From

Aviation

ICAO GIACC/3ICAO GIACC/316-19 February 2009, Montreal16-19 February 2009, Montreal

Paul SteeleOn behalf of ACI, CANSO, IATA and ICCAIA

22 2

Summary Analysis

Based on most recent ICAO FESG forecasts CO2 efficiency potentials relative to 2005

15% by 2012 32% by 2020 At least 50% by 2050

Key findings Three key drivers of aviation emissions reductions

Ongoing fleet renewal ATM modernization and operational improvements Availability of biofuels

33 3

Summary

Enabling government policy implications

Support R&D investments

Commit to ATM modernization and reorganization

Implement positive legal/fiscal framework for biofuels

Avoid multi-layering of charges and taxes

44 4

Introduction Industry is committed to

Make a significant contribution to global CO2 reductions

Continue to underpin global socio-economic development

The four-pillar strategy guides our approach Invest in Technology (Including alternative fuels) Fly planes effectively Build efficient infrastructure Use positive economic measures

Our scope: CO2 emissions from a ‘gate to gate’ perspective,

including APU use Ground service equipment, terminal and ground

transport not included

55 5

Projected relative growth 2006 - 2050

0%100%200%300%400%500%600%700%800%900%1000%

2000 2010 2020 2030 2040 2050

RTK incl Freighterfleet

RTK pax fleet only

RPK

FlightsFleet

Average size

66 6

- 10,000

20,000 30,000

40,000 50,000

60,000 70,000

80,000 90,000

2010 2020 2030 2040 2050

Year

Numb

er of

aircra

ftRemaining 2006 pax fleet Replaced post 2006 deliveriesNew pax fleet Remaining FreightersConverted Freighters New Freighters

Fleet forecast 2006 - 2050

77 7

Measures

Potential measures identified in five areas Technology development & implementation Improved ATM and infrastructure use More efficient operations Economic/market-based measures Regulatory measures

When considering measures Reduction potentials not necessarily additive Full stakeholder alignment required to achieve

maximum potential Crucial government role in enabling and facilitating

implementation of measures

88 8

1. Technology

Newly certified aircraft provide at least 15% fuel burn reduction relative to products they replace

Specific technology examples Blended winglets & raked wingtips Advanced fly-by-wire control systems Composites & advanced metal alloys Advanced turbofan engines

No attempt to predict future aircraft designs for 2050 Used ICCAIA high technology scenario to extrapolate

fuel efficiency improvements 1.16% pa

99 9

1. Technology

Relative improvement of new aircraft

40%

50%

60%

70%

80%

90%

100%

110%

2000 2010 2020 2030 2040 2050

21-50 51-100 101 -150 151-210 211 -300

301-400 401 -500 501 -600 601-650

Seat categories

Re

lati

ve

Fu

el

Bu

rn

1010 10

2. Operations

Analysis based on approximately 100 airline visits carried out by IATA Green Teams

Full implementation of identified opportunities would lead to an average 5% saving on the overall CO2 budget

1111 11

Since IPCC (1999) ATM has delivered up to 4% improvement

Unrecoverable 3-4% inefficiency foreseen due to

interdependencies

CANSO goal to recover remaining 3-4% by 2050, while traffic

quadruples

ATM6-12%

Other6-?%

Airframe, engine and fuel82%

Updated & Recovered 1999-2005 = 4%

IPCC (1999)

Aviation Emissions

CANSO (2008)ATM

Goals

Recoverable 2005-20503 - 4%

6 – 12 %

Interdependencies3 - 4%

3. Infrastructure: ATM

1212 12

3. Infrastructure: ATM Airspace efficiency & air traffic growth

86

88

90

92

94

96

98

100

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

Year

AT

M E

ffic

ien

cy (

%)

“Business as usual” ATM efficiency will

decay as traffic congestion increases

(conceptual)

Ne

t A

TM

eff

icie

nc

y g

ain

s

Aspirational goals with ATM improvement

4%

To deliver 4% airspace efficiency, ATM has to deliver much higher efficiency gains

96%

1313 13

4. Infrastructure: airports

13

Total potential CO2 saving from APU use is

~ 4.2 Mt in 2007 ACI estimates Projected fuel saving from FEGP/PCA is 0.6% of

total industry fuel burn

1414 14

Fuel efficiency goals

Year Traffic growth

(RTK) a) Fuel efficiency

improvement goals b)

CO2 savings potential (Mt/yr) c)

2012 40% 15% 170 2020 130% 29% 485 2050 750% 50% 3,590

a)

Based on ICAO FESG traffic forecast 2008, expressed in revenue tonne-kilometres (RTKs). b)

Fuel efficiency is expressed in litres of fuel used per RTK. c)

This includes estimated annual savings from fleet renewal, ATM and operational improvements, and reduced auxiliary power unit (APU) use, expressed in millions of metric tonnes per year (Mt/yr) . It does not include estimated CO2 reductions from biofuel use.

1515 15

Total relative fuel use

0%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1000%

2000 2010 2020 2030 2040 2050

Relativchange %

Year

RTK development Fuel Used development

Operational optimization APU Fuel savings

ATM efficiency improvements

0%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1000%

2000 2010 2020 2030 2040 2050

Relativchange %

Year

RTK development Fuel Used development

Operational optimization APU Fuel savings

ATM efficiency improvements

Key Drivers of Emissions Reductions

Ongoing Fleet Renewal / Technology Development

Ongoing Fleet Renewal / Technology Development

ATM Investments / Improvements

ATM Investments / Improvements

Low Carbon FuelsLow Carbon Fuels

Forecasted Emissions Growth w/o Reduction Measures

Forecasted Emissions Growth w/o Reduction Measures

BaselineBaseline

CO

CO

22 E

mis

sio

ns

Em

issi

on

s

20502050Carbon Neutral TimelineCarbon Neutral Timeline

1717 17

Alternative fuels

Fuel

Engine

CO2

Biomass

1818 18

Alternative fuels (1) Crucial to reducing aviation’s carbon footprint,

Potential use of less carbon-intensive aviation fuels Jatropha, camelina, halophytes, algae, etc. Must meet strict sustainability criteria Regional differences / solutions

Very promising and fast developing area Successful tests in recent months Next milestone is certification ICAO Workshop highlighted significant progress

Biofuels will also contribute to New revenue streams for developing countries Energy security for local/national economies

1919 19

Alternative fuels (2)

Analyzed two scenarios for the commercialization of bio-jet – one optimistic and one pessimistic

Elements of the analysis Yield efficiency Capital costs Refinery construction time

Market viability defined as: threshold at which annual biojet usage reaches 1% of

total fleet fuel usage ~ 700 m US gallons or 2.65 Bn litres

2020 20

Alternative fuels (3)

Optimistic vs pessimistic scenario Market viability will be reached in 2015. Pessimistic scenario in 2021 Due to uncertainties, no attempt to project biofuel

availability beyond 2021

Assumed Carbon recovery rate of 80% on a full carbon life-cycle basis

Biofuels are not a significant contributor to CO2 savings in the 2012 timeframe

2121 21

Alternative fuels (4)

By 2020, biofuels benefits are small but significant I.e. an additional CO2 saving of 3% (34 Mt CO2)

Indicative volumes required for carbon-neutral growth at 2020 levels By 2029, a biojet supply of 223 bn litres By 2030, 238 bn litres By 2035, 391 bn litres By 2050, 1,051 bn litres

Beyond 2050, biofuels could drive emissions well below today’s levels

2222 22

CO2 intensity goals

Includes potential CO2 benefits from future biofuel use in aviation

Year Traffic growth

(RTK) a) Fuel efficiency

improvement goals b)

CO2 intensity reduction goals c)

CO2 savings potential (Mt/yr) d)

2012 40% 15% 15% 170 2020 130% 29% 32% 485 2050 750% 50% n/a 3,590

a)

Based on ICAO FESG traffic forecast 2008, expressed in revenue tonne-kilometres (RTKs). b)

Fuel efficiency is expressed in litres of fuel used per RTK. c)

CO2 intensity is expressed in kilogrammes of CO2 emitted per RTK. This includes CO2 benefits from biofuel use. d)

This includes estimated annual savings from fleet renewal, ATM and operational improvements, and reduced auxiliary power unit (APU) use, expressed in millions of metric tonnes per year (Mt/yr). It does not include estimated CO2 reductions from biofuel use.

2323 23

Required Investment

Identified aspirational goals require Estimated total investment in excess of USD 7

trillion would be required by 2050

This amount includes investment in New, more efficient aircraft ATM modernization programmes Biofuel production & distribution

2424 24

Roles of stakeholders Manufacturers

Develop and deliver more fuel efficient equipment

ANSPs Implement improved ATM procedures and

modernization programmes Influence State airspace design

Airports Provide sufficient infrastructure capacity

Airlines Invest in fleet renewal while satisfying demand Realize improvement potentials offered by product

and system providers

2525 25

Roles of stakeholders

Governments Implement fiscal and legal policies that enable

accelerated introduction of appropriate CO2 reduction measures

Support R&D funding

Ensure necessary airport capacity

Ensure airspace efficiency through: Proper institutional arrangements Improved civil/military coordination Improved ANSP governance Performance-based regulations

2626 26

Policy measuresWe need positive measures that:

Support industry in reducing its net carbon emissions

Stimulate private and public investments

Support clean technologies Including alternative fuels

Minimize compliance costs and competitive distortions

Recognize socio-economic benefits

2727 27

Implementation considerations

We need global solutions to a global problem Sector-specific approach Based on common vision

Key principles Consensus based Avoid competitive distortions Recognize global investment

requirements Strong ICAO leadership needed

ICAO GIACC/316-19 February 2009, Montreal

Industry is committed to work Industry is committed to work with ICAO/GIACC to forge a with ICAO/GIACC to forge a global framework to reduce global framework to reduce

aviation COaviation CO22 emissions emissions

ICAO GIACC/316-19 February 2009, Montreal

Q & AQ & A