When it comes to flying, going green might cost more, and it is going to take a while for the strategy to take off.
Sustainability was a hot topic this week at the Paris Air Show, the world’s largest event for the aviation industry, which faces increasing pressure to reduce the climate-changing greenhouse gases that aircraft spew.
Even the massive orders at the show got an emissions-reduction spin: Airlines and manufacturers said the new planes would be more fuel-efficient than the ones they replace.
Photo: AP
However, most of those planes would burn conventional, kerosene-based jet fuel. Start-ups are working feverishly on electric-powered aircraft, but they would not catch on as quickly as electric vehicles.
“It’s a lot easier to pack a heavy battery into a vehicle if you don’t have to lift it off the ground,” said Gernot Wagner, a climate economist at New York University.
That means sustainable aviation fuel (SAF) has become the industry’s best hope to achieve its promise of net zero emissions by 2050. Aviation produces 2 to 3 percent of worldwide carbon emissions, but its share is expected to grow as travel increases and other industries become greener.
Sustainable fuel accounts for just 0.1 percent of all jet fuel. Made from sources like used cooking oil and plant waste, SAF can be blended with conventional jet fuel, but costs much more.
Suppliers are “going to be able to kind of set the price,” American Airlines Inc vice president Molly Wilkinson said at the air show. “And we fear that at that point, that price eventually is going to trickle down to the passenger in some form of a ticket price.”
With such a limited supply, critics say airlines are making overly ambitious promises and exaggerating how quickly they can ramp up the use of SAF.
The industry even has skeptics: Nearly one-third of aviation sustainability officers in a GE Aerospace survey said they doubt the industry would hit its net zero goal by 2050.
Delta Air Lines Inc is being sued in US federal court by critics who say the carrier falsely bills itself as the world’s first carbon-neutral airline, and that Delta’s claim rests on carbon offsets that are largely bogus.
The Atlanta, Georgia-based airline says the charges are “without legal merit.”
Across the Atlantic, the European Consumer Organisation (BEUC) filed a complaint this week with the EU’s executive arm, accusing 17 airlines of greenwashing.
The group says airlines are misleading consumers and contravening rules on unfair commercial practices by encouraging customers to pay extra to help finance development of SAF and offset future carbon emissions created by flying.
In one case, the group’s researchers found Air France charging up to 138 euros (US$150.33) for the green option.
“Sustainable aviation fuels, they are indeed the biggest technological potential to decarbonize the aviation sector, but the main problem ... is that they are not available,” BEUC senior policy officer Dimitri Vergne said.
“We know that before the end of the next decade — at least — they won’t be available in massive quantities,” and would not be the main source of fuel for planes, Vergne said.
Producers say SAF reduces greenhouse gas emissions by up to 80 percent, compared with regular jet fuel, over its life cycle.
Airlines have been talking about becoming greener for years. They were rattled by the rise of “flight shaming,” a movement that encourages people to find less-polluting forms of transportation — or reduce travel altogether.
The issue gained urgency this year when EU negotiators agreed on new rules requiring airlines to use more sustainable fuel starting in 2025 and rising sharply in later years.
The US is pushing incentives instead of mandates.
A law signed last year by US President Joe Biden would provide tax breaks for developing cleaner jet fuel, but one of the credits is to expire in just two years.
Wilkinson said that was too short to entice sustainable fuel producers and that the credit should be extended by 10 years or longer.
The International Air Transport Association, an airline trade group, said it estimates that SAF could contribute 65 percent of the emissions reductions needed for the industry to hit its 2050 net zero goal.
However, few flights are powered by SAF because of the limited supply and infrastructure.
Just before the Paris Air Show opened, French President Emmanuel Macron announced that France would contribute 200 million euros toward a 1 billion euro plant to make SAF.
Many airlines have touted investments in SAF producers such as World Energy, which has a plant in Paramount, California, and Finland’s Neste Oyj.
United Airlines Holdings Inc plans to triple its use of SAF this year, to 38 million liters — but it burned 13.6 billion liters of fuel last year.
Some see sustainable fuel as a bridge to cleaner technologies, including larger electric planes or aircraft powered by hydrogen, but packing enough power to run a large electric plane would require a fantastic leap in battery technology.
Hydrogen must be chilled and stored somewhere. It could not be carried in the wings of today’s planes, as jet fuel is.
“Hydrogen sounds like a good idea. The problem is the more you look into the details, the more you realize it’s an engineering challenge, but also an economics challenge,” Richard Aboulafia, managing director of aerospace consultancy AeroDynamic Advisory, said at the Paris Air Show. “It’s within the realm of possibility, [but] not for the next few decades.”
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing