Decarbonizing aviation: Clear for take-off

An industry perspective

Decarbonization has become a global imperative and a priority for governments, companies, and society at large. This report is the third in a series by Deloitte and Shell, exploring the decarbonization of harder-to-abate sectors. This research outlines the current state of the aviation sector, identifies the barriers to decarbonization readiness, and proposes solutions and a flight plan to accelerate decarbonization in the sector.

Decarbonization readiness: Where are we today?

Decarbonization readiness: Where are we today?

90% of research respondents prioritized the decarbonization of aviation but there are significant barriers. Sustainable aviation fuel (SAF) is up to two to eight times more expensive than traditional jet fuel, there is a lack of clarity and alignment across government and regulatory bodies regarding emission reduction targets, and many within the aviation industry are skeptical about the role of carbon offsets in helping mitigate emissions while SAF and other measures come to scale.

The research suggests clear strategies for overcoming these barriers. With collaboration across the industry, innovation and ambition, these strategies will significantly reduce aviation’s net emissions. Faster production, supply and use of SAF is crucial − hence, the need for incentives from Governments and regulators. Banks and other financial institutions should be encouraged to provide funding for SAF production and purchase as part of their environmental, social and governance commitments.

Report findings

Deloitte and Shell interviewed over 100 aviation executives and experts representing more than 60 organizations across the global aviation ecosystem to identify the key barriers to decarbonizing aviation and practical solutions to accelerate the industry’s transition towards net zero. Highlights from this research includes:

  • Aviation has often been considered a sector that will decarbonize later than others, because of the complexity involved and the view that aviation accounts for “just 3% of global emissions”. But there is a need to act now.
  • The sector is facing several barriers to decarbonization − reluctance of passengers to accept the cost of low-emission solutions, lack of regulatory support, prohibitively high cost of SAF, and concerns about quality, transparency, and communications.
  • Long-term customer demand, enabled by recognition mechanisms and differentiated propositions, will play a fundamental role in providing the funding and incentives for airlines to invest in lowering their emissions.
  • Country- and region-based policy incentives relating to supply and demand will accelerate the adoption of SAF and regulation at regional and global level.
  • Offsets can play an essential role in funding the early stages of decarbonization. But for this to happen, they must be made more transparent and verifiable. They need to be more emotionally appealing to passengers, and their impact should be clearer.
  • Choosing SAF as the primary means of decarbonization will have a disproportionate impact on lowering emissions, because there is no need to redesign aircraft. As a result, investments and R&D efforts can focus mainly on scaling production and lowering cost.
  • Collaboration with other sectors is essential to the successful deployment of SAF. It can drive down the cost of required technologies, such as hydrogen production, direct air capture and biomass conversion, and ensure effective use of scarce resources.
  • The pathway to decarbonisation needs to be more ambitious and investments need to start sooner to address societal expectations, reach sufficient SAF volumes and bring down cost to the levels required for large-scale adoption within 15 years.
  • Individual initiatives should be integrated into comprehensive plans representing all points along the value chain – from energy producers to end-customers. These plans should be systematically deployed in areas with favourable policies, market conditions, and access to SAF.

To learn more, download the report.

“Aviation is fundamental to the world economy and to connecting people. While the pathway to decarbonize the sector is clear, it should be more ambitious and efforts should be front-loaded. Collaboration between ecosystem players in the sector, and more importantly across sectors, is essential to scale up demand and production of Sustainable Aviation Fuel (SAF). Working with more than 100 executives and experts around the world we defined 15 recommendations for action, which when integrated, would systematically decarbonize the sector”

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Rajeev Chopra

Rajeev Chopra

Global Leader—Energy,
Resources & Industrials
Geoff Tuff

Geoff Tuff

Principal | Deloitte Consulting LLP
Peter Sanders

Peter Sanders

Partner, Consulting - Strategy
& Operations
Susan Cattozzo

Susan Cattozzo

Oil, Gas & Chemicals Principal