How Aviation Can Cut Emissions By 2035 Using SAF And Existing Tech

By Jerome Bouchard and David Kaplan

^{Jerome is a partner and aerospace expert in Oliver Wyman’s Transportation and Services practice, while David is a principal in the consultancy’s Energy and Natural Resources practice.}

Aviation needs to address its greenhouse gas emissions problem, yet the conversation and investment around decarbonization too often focuses on the wrong technologies and the wrong date. The industry cannot wait until 2050 to get serious about cutting emissions, which is what will happen if it pins too many of its hopes on hydrogen-propelled and battery-powered aircraft. Neither will be approved for use on medium-haul and long-haul commercial airliners much before 2050 — and that delay matters because aircraft with 100 seats or more are responsible for 96% of aviation’s emissions. It will then take decades to replace the thousands of older conventional jets in the global fleet — an action constrained by production capacity as well as economics.

While these non-fossil fuel technologies will eventually play a substantial role in making aviation less carbon-intensive, they will do little until 2040 — the early stage of their incorporation into the global fleet of smaller aircraft and short-haul airliners. By then, assuming business as usual and using a trajectory projected by the International Air Transport Association (IATA) in 2021, aircraft would be responsible for roughly 1.4 gigatons of emissions per year — 40% more than the one gigaton it emits today.

The key to cutting emissions over the next two decades is investment in two existing technologies with the potential to shrink aviation’s carbon footprint by as early as 2040 — sustainable aviation fuel (SAF) and conventional kerosene-powered jet engines. By investing in the production capacity for low-carbon SAF and rethinking current jet engines, the industry could cut 80% of its emissions by 2050, moving the needle in the right direction in a substantive way.

The problem: insufficient investment and a lack of urgency. Oliver Wyman calculates that for SAF production alone, the investment will need to be well over $1 trillion through 2050 to scale up. Currently, the SAF investment is a tiny percentage of that with airlines using less than 1% in their fuel consumption.

Solutions for the next decade

So what can the industry do? First, aviation must begin to take decisive actions today to increase SAF consumption and production. A gallon of SAF emits between 50% and 80% less carbon dioxide than conventional jet fuel. To hold emissions at their 2019 level, enough SAF production capacity needs to be built by 2030 to allow airlines to replace at least 15% of total jet fuel consumption with SAF. Yet by our calculations, production capacity will be only one-fifth to one-third of the 16 billion gallons necessary to reach 15%. That’s even factoring in the generous subsidies provided by the United States in last year’s Inflation Reduction Act and other incentives from the European Union to build more SAF capacity.

But production capacity is only part of the dilemma. SAF is also expensive — about two to three times the cost of conventional Jet A-1 fuel — which is so far limiting airlines’ contractual commitments to SAF. Made predominantly from used cooking oils, waste animal fats, and other sustainable low-carbon feedstocks, SAF costs more to produce than kerosene-based jet fuel. The handful of SAF producers worldwide also must compete for feedstock with renewable diesel (RD) — a low-carbon fuel that can be used in trucks, ships, farm and construction equipment, and buses. RD is both slightly cheaper to produce and has a more mature global market.

Expansion of supply — perhaps in response to regulatory mandates or incentives like the IRA — would likely bring the price differential down, although it is not expected to reach parity with traditional jet fuel in the near term. While SAF adoption presents obstacles, they are surmountable with adequate investment — some of which will become necessary with the EU’s mandate requiring that all flights departing European airports use 2% SAF by 2025 and at least 5% by 2030. That percentage rises periodically until reaching 65% in 2050.

In June, the World Economic Forum, the Airports Council International World, and more than 50 chief executives from aviation-related companies kicked off the Airports of Tomorrow initiaive in which one of the key pillars is a call for the construction of 300 SAF plants by 2030.

A new era of jet engines

The second option for aviation is to do what the industry has done best for the past century — innovate. Over the past century, aviation has moved from crude propeller planes to jets, to supersonic aircraft, to rockets that travel beyond Earth’s atmosphere—with consistent efforts to improve fuel efficiency. According to IATA, each new generation of plane has reduced emissions 15% to 20%, with the overall fuel efficiency 80% better than 50 years ago. Still, that’s not enough, given the growth of emissions. For instance, while aviation managed to cut the amount of fuel burned per passenger by 24% between 2005 and 2017, there was simultaneously a much bigger percentage increase in air travel.

To realize new efficiencies, aerospace manufacturers need more dramatic overhauls of current technology. For instance, General Electric
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Aerospace and Safran Aircraft Engines through its joint venture CFM International are developing a new engine system called RISE, short for Revolutionary Innovation for Sustainable Engines. This is based on what’s called an open fan architecture that could reduce fuel consumption and CO2 emissions by more than 20% compared with today’s most efficient engines. CFM is hoping the engine will be ready by the mid 2030s. The Federal Aviation Administration also gives out grants through its Continuous Lower Energy, Emissions, and Noise (CLEEN) Program for similar research. Besides GE, other recipients of grants to reduce emissions included Pratt & Whitney, Honeywell Aerospace, and Boeing.
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Although the industry often looks to 2050, it will likely be the actions over the next decade that will determine success or failure for aviation in its quest for net zero. If that future doesn’t include a substantial supply of SAF and more research into improving current engines, the industry may either see emissions rise or a restrictive regulatory solution.