Lately I've been thinking a lot about the role of the ecosystem in the sustainable aviation. Most of the times when we talk about the sustainable aviation, we talk about sustainable aviation fuels and electric flying. The viewpoint is in the airlines and how they can transform their source of energy into something that reduces the CO2 emissions. The approach from the ecosystem perspective is often forgotten.
In the shipping industry the concept of Green Corridors has created interesting developments towards the sustainable ecosystem (McKinsey, 2022). Green corridor means an environmentally sustainable transportation route. According to McKinsey, building a green corridor in the shipping industry requires four points: the supply chain that can provide alternative fuel for the vessels, the port infrastructure that can handle, transport and store those fuels, the investment to vessels that can use those fuels and finally the interest of cargo owners and end customers. How could this ideology be transferred into the aviation industry?
All the above mentioned points are practiced in the aviation industry. There are sustainable aviation fuel producers that can get a fueling truck to a whatever landing area where the airline wants it to be delivered. The airports have already well functioning fuel farms where the aviation fuel can be stored. Enhancing the capacity at those farms is probably doable, if the fueling company and the airport get into an agreement about the land usage. Aircraft manufacturers are developing more sustainable aircraft types and the airlines are indicating their willingness use them. The cargo shippers and the passengers are in many cases already willing to compensate their shipments. So where is the catch?
When we are talking about a green transformation, we typically have technical, economic and regulatory challenges. If we think for example electric flying, we definitely have technical problems. There are interesting cases of electric engine developments for the aviation industry, but taking that into a commercially viable solution that could actually make profits to an airline might still be yet to come. Or, if we think about the price of the sustainable aviation fuel (SAF) for an airline, it is about 2-4 times more expensive than the traditional kerosine. That's definitely an economic issue to an airline. Or, if we look at the SAF again, it can be used only in 50% mixtures with kerosine. This is a regulative issue. Whether it would be technically feasible or not to raise the percentage of the SAF, 50% mixture still has 50% of the traditional aviation fuel. The other side of the regulation is, that it would increase the usage of SAF if it would be made obligatory at some level.
Let's take the same examples but from the ecosystem perspective. If there would be an increasing number of electric aircrafts in a commercial use, how would the charging be arranged? Who would invest in the charging facilities? The airport? How would they know which technology to select or which kind of appliances would be suitable? We are talking about big investments: how about the payback time? Looking at the price issue of the SAF it would be hard to find stakeholders who would love to pay for the higher costs. Increases in costs tend to end up into the passenger ticket or air cargo prices. The competition in the industry now especially after the pandemia makes everybody to be very careful with the end user prices. And even though the SAF mixture can be up to 50%, most of the airlines that are using SAF at some of their operations, they use the mixtures of less than 10%. The increased usage of SAF could be ensured with a regulation, but if the usage grows, is there enough raw material or the production capacity?
Building a green corridor in aviation would need a seamless cooperation and trust between the stakeholders and the customers. There would have to be a well functioning supply chain for the sustainable aviation fuel. This is something that the fueling company can arrange. There would have to be enough storage or other suitable capacity at the airport for the sustainable aviation fuel. This can be done in cooperation between the fueling company and the airport. Current aircrafts are technically feasible for using the sustainable aviation fuel in a way that has been defined in the regulation. But are the passengers and the air cargo shippers ready to pay for the escalated prices for the transportation services?
Already now the end users (passengers and the air cargo shippers) can compensate their footprint. Problem is that the amount of money is nowhere near to the amount of money that would be needed to make that particular flight to operate with a feasible amount of SAF. The mixture of 50% would be allowed, 100% would be needed if the regulation and the tested feasibility would allow, but typically less than 10% is used. Also, the airlines don't use that mixture at every flight, so if you are compensating, you might be supporting the purchase of SAF to some other flights besides yours. The compensations can go also to some totally other purpose. Purchasing a green corridor with compensations doesn't sound like a sustainable solution to me.
Before a green corridor in aviation can be built with a seamless cooperation and trust, it needs help from the legislation. There should be binding laws that force the airlines to use the sustainable aviation fuels much more extensively in all of their routes. This would help the airports and the fueling companies to invest in more advanced fueling systems. This would also help the fueling companies to produce more SAF and thus help with reducing the unit costs and the price. And the end-users would just pay for the escalated prices for the services. Are we ready for this kind of regulation? I think that's the price for the green corridors in aviation. I don't think there is an easy way towards a truly sustainable aviation.