GREENAIR NEWSLETTER 23 JUNE 2020
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Europe’s first power-to-liquid demo plant in Norway plans renewable aviation fuel production in 2023
Tue 23 June 2020 – An industrial consortium is planning Europe’s first power-to-liquid (PtL) plant that will produce hydrogen-based renewable aviation fuel in Norway. The Norsk e-Fuel consortium is initially looking to build a demonstration plant at the Herøya Industry Park in Porsgrunn, near Oslo, capable of producing 10 million litres of fuel a year before scaling up the facility to commercially produce 100 million litres by 2026. The output of the full-scale plant would save an estimated 250,000 tonnes of CO2 emissions annually and fuel the five most frequently serviced domestic routes in Norway with a 50% blend. The renewable fuel would be generated from CO2 and water using 100 per cent renewable electricity. Planning of the €90 million ($100m) demo plant is said to be well underway, with other locations identified for a nationwide rollout.
The consortium has four main partners: German PtL technology provider Sunfire, Swiss-based CO2 air capture technology specialist Climeworks, Luxembourg-headquartered international engineering company Paul Worth SMS Group and Valinor, a Norwegian family-owned green investment company.
“Together, we combine the necessary corporate strength with the most advanced and efficient technologies to convert Norway’s extensive resources of wind and hydro power into renewable fuels,” said Norsk e-Fuel Managing Director Karl Hauptmeier.
Using a single-step co-electrolysis process, Sunfire and Climeworks technologies convert renewable electricity, water and CO2 captured from ambient air and unavoidable CO2 sources into syngas, which is then converted through the established Fischer-Tropsch process into renewable fuels.
“Chemical reactions are reversible so if you can burn a fuel to generate CO2 then you can also take CO2 to generate a fuel,” explained Hauptmeier in a webinar. “Obviously, it’s not as easy as that – you require a few steps. Firstly, we need to get the CO2 out of the air and this we can do using direct air capture technology that sequesters the CO2 to make it available to us. Then we use the CO2, combine it with water and bring it into one of our electrolysers, which allows us to split those molecules using renewable electricity to create the building blocks for the third step of the process, the synthesis.
“We take those building blocks, the syngas – the combination of hydrogen and carbon monoxide, we recombine them to create the renewable crude oil substitute. We will partner with a refinery to take the feedstock to generate the final fuels, which can be used in shipping and aviation. When used, the fuel burns and the CO2 is re-emitted but we can recapture it again and this closes the cycle. What we are doing in effect is imitating nature, it’s exactly what plants are doing, just industrialised and more efficiently.”
Norsk e-Fuels is bringing together all the necessary competencies to make this possible, said Hauptmeier. “We are a project developer and a technology provider and our strategy includes the building and commissioning of a series of renewable fuel plants in Norway. It’s not just a simple demonstration plant – we’re building a whole new economic sector to produce renewable fuels for Norway and Europe.”
The Herøya site has excellent resources and the capability for further scaling, he said. For a commercial-scale plant to produce 100 million litres of jet fuel annually would require a renewable electricity demand of roughly 200 megawatts.
Although the drop-in fuel would be certified for use in blends up to 50%, Hauptmeier envisaged initially the company would start with a far lower blend. A German estimate, he said, quotes a flight between Berlin and Beijing using a 10% PtL blend would increase the ticket cost by around 50 euros ($55). “I believe this is a price worth paying to help save our climate.”
To fulfil a quarter of European aviation’s annual demand for jet fuel by 2040 from renewable sources would require round 20 billion litres, he estimates. “This market cannot be covered by sustainable biogenic solutions alone, so the potential for renewable fuels is enormous.”
Pål Selboe Valseth, CEO of Valinor, said clean, renewable electricity was abundant in Norway and the consortium was looking at locations with large, underused energy capacities.
Subject to financing, first groundwork on the Herøya site is due to start between the middle and end of 2021. Carl Berninghausen, CEO of Sunfire, said long-term financing would be structured from equity, standard bank loans and insurance-based bonds. Investment support would also be needed from the Norwegian government, he said. Total investment for the demo and full-scale plant would be in the region of NOK 5.5 billion (€500m), said Valseth, with around 60% coming from Norwegian sources.
Offtake demand for the fuel from the first plant was already bigger than could be satisfied and the consortium would be entering into strategic partnerships with those wanting to buy the fuel, said Berninghausen. In March, sustainable aviation fuel provider Neste acquired a minority stake in Sunfire. Those willing to pay the premium for the first fuels to be produced would get a ‘first come’ advantage when subsequent supplies came online, he promised. “We certainly expect the demand for our renewable fuel to be higher than the available supply.”
Being realistic, added Hauptmeier, prices for the PtL fuel from the demo plant will be higher initially than for biofuel alternatives. “But in the long run, having industrialised plants with cheaper electricity resources will enable us to push production prices down to between €1 and €1.50 per litre, depending mainly on electricity prices,” he said.
“We will not only be cost-competitive with advanced biofuels coming from, for example, forest residues but we have the advantage of having unlimited supply. Biofuels are very much dependent on their feedstock availability and price. We have a solution that can be applied anywhere in the world where renewable electricity is or can be made available. However, we’re not saying we are competing with them as we will need both solutions.”
ACI Asia-Pacific recognises airport water management innovation in its annual green airports programme
Wed 17 June 2020 – Airports in Asia-Pacific and the Middle East have been recognised for their innovative approaches to water management in the annual Green Airports Recognition (GAR) programme run by airport industry body ACI Asia-Pacific. The objective of GAR is to promote best practices to minimise aviation’s impact on the environment and this year’s theme showcases projects fostering water conservation and prevention of water pollution. A survey by ACI Asia-Pacific last year showed water management continues to be one of the top three environmental priorities for airports. Submissions this year included projects covering wastewater treatment, water harvesting, water recycling and water reduction. Airports receiving the highest Platinum recognition were Chinese Taipei’s Taoyuan International and Kaohsiung International and India’s Rajiv Gandhi International. Meanwhile, Istanbul Airport’s terminal building has become the world’s largest LEED Gold certified building in the world.
Data from the World Resources Institute in 2019 warned that almost a quarter of the world’s population, many living in Asia-Pacific and the Middle East, will be facing serious shortages in fresh water supply. The substantial growth of aviation in the region has led to a significant increase in water usage by airports. Airports also generate large volumes of wastewater that may include contaminants.
Directions on how airports should protect scarce water resources are provided in the ACI Policy Handbook. Measures such as reducing the flow setting of taps, water meters and leak detection systems have been implemented by many airports in the region, says the trade body.
This year’s GAR submissions included projects covering wastewater treatment, water harvesting, water recycling and water reduction.
Taoyuan’s Platinum award in the larger airport category was in respect of an initiative to deploy intelligent management of the airport’s water supply and drainage and sewage facilities. The airport has established a task force to plan and promote a ‘smart water resources management Internet of Things installation project’.
The Platinum award in the mid-size airport went to Hyderabad’s Rajiv Gandhi International for practices implemented under its Reduction, Recycling, Reuse and Replenishment (4R) water policy. It has resulted in a 31% improvement in water use efficiency in 2018-19 over 2015-16, with around half of total airport water demand met from internal resources such as treated wastewater and surface water.
In the smaller airport category, Kaohsiung was awarded Platinum for an efficiency project launched in 2015 that has resulted in average water consumption being reduced from 72 litres per passenger to 58 litres.
Summaries of all the submissions from entries in this year’s GAR have been included in one publication by ACI Asia-Pacific to help promote and share best water management practice with all airports in the region.
“Asia-Pacific’s new strategic direction is to work with our 114 airport members towards a new societal value for the communities they serve. This includes promoting a culture of environmental consciousness,” said Stefano Baronci, Director General of ACI Asia-Pacific. “We thank all participating airports for their ongoing commitment and contribution to environmental protection. The Green Airports Recognition programme fits perfectly into this context by encouraging airport operators across the region and globally to share environmental best practices.”
Meanwhile, the US Green Building Council has registered Istanbul Airport’s terminal building as the largest LEED Gold certified building worldwide. The LEED (Leadership in Energy and Environmental Design) certification process evaluates buildings in a number of categories such as sustainable land, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, innovation in design, and regional priority credits. Projects pursuing certification earn points to reach one of four LEED rating levels: Certified, Silver, Gold or Platinum.
The airport says it is making significant savings in terms of water and energy efficiency. In the construction phase of the terminal most of the waste generated was sent for recycling and reuse, reducing waste sent to landfill by 93% as part of its ‘zero waste’ mission.
“We consider compliance with sustainability principles as the most important component of our corporate culture. Based on this mindset, we have set the ‘zero waste’ approach as a key success factor and have put sustainability to the core of all activities that are being carried out at Istanbul Airport,” said Kadri Samsunlu, Director General at İGA Airport Operation, the operator of Istanbul Airport.
Jet Zero Council announced by UK government to develop greener air travel and awards Velocys SAF grant
Mon 15 June 2020 – Following calls from the aviation industry, the UK government has created a Jet Zero Council to help develop greener air travel towards a net-zero target by 2050. The new body will be made up of representatives from the aviation sector, environmental groups and government officials. The industry’s coalition group Sustainable Aviation recently called for UK aviation “to be at the heart” of the government’s economic and green recovery strategy. It urged the government to support the emerging sustainable aviation fuels sector by committing £500 million ($600m) to early-stage projects. The government has responded by announcing a £500,000 of grant funding for the Velocys Altalto waste-to-fuels project under its Future Fuels for Flight and Freight Competition. Meanwhile, UK trade unions have called for retraining of laid-off aviation workers in low-carbon sectors with better long-term prospects.
Speaking at a Downing Street daily Covid-19 briefing on Friday (June 12), Transport Secretary Grant Shapps said: “There’s a real determination within the industry to have a greener restart so we’re bringing together leaders from aviation, environmental groups and government to form the Jet Zero Council. This group will be charged with making net-zero emissions possible for future flights.
“Our goal within a generation will be to demonstrate flight across the Atlantic without harming the environment.”
The move was welcomed by trade body Airlines UK, which represents carriers such as British Airways, easyJet and Virgin Atlantic.
“It’s an excellent initiative and the Transport Secretary should be applauded for demonstrating such a willingness to work with the aviation industry to achieve our commitment to net zero emissions by 2050,” commented Chief Executive Tim Alderslade. “There are huge opportunities for the UK to be a world-leader in sustainable aviation fuels production and electric aviation, creating thousands of high-skilled jobs and major export opportunities in the process. It’s a win-win for all of our regions who will stand to gain from this and for the UK’s decarbonisation efforts, and we’re looking forward to taking part.”
A spokesperson for Virgin Atlantic added: “We welcome the government’s announcement that it plans to establish a Jet Zero Council for aviation and we share their vision to see zero impact transatlantic flights in a generation. The airline sector has a long and successful track record of cross-industry collaboration, including on safety and sustainability.”
In addition to supporting sustainable aviation fuels (SAF), a letter from the Sustainable Aviation group earlier this month also called for the government to work with the industry to develop aircraft and engine technology R&D capabilities on hybrid and electric aircraft, accelerate UK airspace modernisation and progress “robust” carbon offset measures and carbon removal technologies.
“In February this year, UK aviation committed to net-zero emissions by 2050 and laid out a plan to achieve this through investing in cleaner aircraft and engine technology, smarter flight operations, sustainable aviation fuels and high-quality carbon offsets and removals,” said Adam Morton, current Chair of Sustainable Aviation and Head of Environmental Technology at Rolls-Royce. “Three months on, these actions all remain essential to delivering sector-wide decarbonisation, particularly given the role UK aviation can play as an engine for rebuilding the economy.”
The £500 million in government investment called for by Sustainable Aviation would be matched, it said, by industry and would support commercial SAF plants across the UK, as well as a ‘centre of excellence’ for SAF development. The group also recommended a cross-government body with appropriate governance structure and resources to progress SAF development and commercial deployment.
The £500,000 grant funding for the Altalto project from the UK Department for Transport was awarded following the shortlisting of Velocys in Stage Two of DfT’s Future Fuels for Flight and Freight Competition (F4C). The company had previously been awarded £400,000 in Stage One of the competition in 2018 (see article).
“The Altalto project is a key step towards a substantial supply of sustainable aviation fuel in the UK, which is essential for meeting net zero carbon targets. This grant, particularly at the present time, underlines the importance of our project to the government’s plans for a green recovery,” said Henrik Wareborn, Velocys CEO. The company was recently granted planning permission to build its Immingham plant in north-east England, in collaboration with British Airways and Shell, and is seeking further finance for the project (see article).
A proposed SAF from waste-based ethanol project submitted by LanzaTech has also been shortlisted for a Stage Two grant, which remains under consideration, according to the DfT. “We will continue to provide updates on the project as it progresses,” said a DfT spokesperson.
One environmental group that would be expected to be included in the Jet Zero Council is the Aviation Environment Federation, which responded to the announcement in an open letter to the Transport Secretary. In conjunction with other NGOs that included Friends of the Earth, Greenpeace and Transport & Environment, AEF has issued a briefing paper on how the UK government could create a more sustainable and resilient aviation industry in a post-Covid recovery.
The paper says the sector needs to be fully accounted for in the economy-wide drive to achieve net-zero emissions; be equitably taxed to help fund the green recovery and to reduce demand for flying; and use technology to mitigate remaining emissions.
The NGOs call for international aviation (and shipping) to be included – as is the case with domestic aviation – in carbon budgets under the UK’s Climate Change Act and that the government should set a policy framework through which the aviation industry is held to account for its own promises to achieve net-zero emissions by 2050. They also urge higher taxes on flights from the UK through a combination of a frequent flier or air miles levy, VAT on plane tickets, introducing excise duty on aviation kerosene and raising air passenger duty.
On technology solutions, the NGOs say they should be funded by the aviation industry alone, with government setting the policy framework. Carbon offsetting is not a solution and electric or hybrid planes are likely to make only a marginal contribution until after the 2050 net-zero target date, they argue. On the other hand, they recommend SAF, particularly electrofuels, can provide an opportunity, along with a small but growing mandate on the sector to use an increasing share of such fuels.
Meanwhile, the Trades Union Congress, which represents 5.5 million UK workers across 48 member unions has called on the UK government to convert its existing coronavirus job retention scheme into guaranteed retraining for laid-off aviation sector workers in low-carbon sectors. They quote analysis showing UK aviation is facing job losses on the scale of the coal-mining industry in the 1980s and that employment in the sector is unlikely to ever return to pre-crisis levels.
The report by the New Economics Foundation (NEF), a social, economic and environmental justice think-tank, finds that at least 70,000 jobs are at risk in the aviation industry and its supply chains over the next two to three months, with 39,000 from aviation. At least 17,000 workers will need to permanently transition out of employment in aviation, it estimates. The study shows that in 2014, seven years on from the previous financial crisis, passenger numbers had returned to their pre-crisis levels but job numbers remained 17% lower.
“We cannot consign these workers to the despair of unemployment,” commented Frances O’Grady, General Secretary of the Trades Union Congress.
“Aviation is a critical part of our economic infrastructure and it supports tens of thousands of good jobs. The sector has already been hit hard by the Covid-19 pandemic and the implementation of the quarantine period is a further blow.”
The proposed plan by the unions calls for a workers’ bailout for the aviation industry that uses the already established government job retention scheme to support those in roles that are vulnerable and ensure any bailouts given to airlines would support workers transitioning out of the sector, while reducing aviation emissions in line with the UK’s climate commitments.
“Aviation needs immediate support – and not just to protect the incomes of billionaire airline owners,” added O’Grady. “Government must act now to protect workers’ jobs and livelihoods, to support the longer-term viability of the sector and facilitate a just transition to lower-carbon operations.”
Alex Chapman, Researcher at NEF, said: “There are rock solid social and economic reasons for preventing the spike in unemployment which is being threatened by aviation bosses, and instead investing heavily in retraining and upskilling aviation workers to prepare them for a new normal, and the rapid decarbonisation of the UK economy.”
UK government sets out details for including aviation in its own emissions trading scheme from next year
Thu 11 June 2020 – The UK government has released details on how it intends to incorporate aviation into a UK Emissions Trading System (UK ETS) and link with those of the EU and Switzerland, as well as the global CORSIA offsetting scheme. Following the withdrawal of the UK from the EU and the transition period due to finish by the end of this year, the first 10-year phase of the UK ETS would start in 2021, with a review after three years. In the light of the UK’s commitment to reaching net-zero emissions by 2050, the government promises the scheme will show greater climate ambition than the EU ETS from the start by setting a lower cap on emissions. Proposed aviation routes to be covered include UK domestic flights, flights between the UK and Gibraltar, and flights from the UK to EEA states and to Switzerland if an agreement is reached. The government says it will begin a review on how a UK ETS could interact with CORSIA.
Following a public consultation, the UK government, along with the devolved administrations of Scotland, Wales and Northern Ireland, have set out the framework for a standalone UK ETS, due to launch in January 2021, in a policy document ‘The future of UK carbon pricing’.
Although the basic functions of a UK ETS are likely to be in line with the EU ETS, which enters Phase IV from next year, the government is keen for its scheme to be aligned with the UK’s net-zero ambition at an early stage. As such, the cap will initially be set 5% below the UK’s notional share of the EU ETS cap for Phase IV. Following advice from its Committee on Climate Change on a net-zero trajectory that is expected later in the year, the cap could be adjusted in 2023. The initial cap will be reduced annually, as is the case under Phase IV.
Auctioning will continue to be the primary means of introducing allowances into the market and the government plans to introduce a transitional Auction Reserve Price of £15 ($19) to ensure a minimum level of ambition and price continuity during the scheme’s initial years. This is intended to reduce the severity or possibility of a large difference between the EU ETS price and the price in a standalone UK ETS. A proportion of allowances will be allocated for free in an approach similar to the free allocation in Phase IV in order to ensure a smooth transition for participants in the 2021 launch.
Should a linking agreement be reached with the EU, the UK foresees mutual recognition of allowances, enabling use in either system. Allowances from the aviation and stationary sectors are proposed to be interchangeable, as is the case in Phase IV.
“International credits will not be permitted in a UK ETS at this time,” stresses the government. “This is without prejudice to ongoing reviews on how best to implement the UN global offsetting scheme, CORSIA, alongside a UK ETS.”
Given that the scope of the aviation component of the UK ETS is defined on a route basis rather than operator basis, the government says there is uncertainty over the number of aircraft operators that would fall within scope of the scheme. Currently there are around 140 UK regulated aircraft operators with verified emissions above zero in the EU ETS, it reports.
“However, in the UK ETS we expect the number of aircraft operators within scope to be greater than this depending on the number of EEA and third country (i.e. countries outside of the EEA) operators that perform flights in scope of the UK ETS,” it says.
The thresholds set in the EU ETS that exempt smaller aircraft operators from obligations would be mirrored in the UK ETS. If classed as a small emitter, an aircraft operator can use a simplified monitoring and reporting approach and would be eligible to use Eurocontrol’s Small Emitters Tool.
The government says it will ensure the UK ETS and EU ETS monitoring, reporting and verification (MRV) requirements are compatible, with verifiers being able to operate across both schemes “a preferred outcome”. The document notes that there are still some technical inconsistencies between the MRV rules of the EU ETS and CORSIA.
“We have raised these concerns with the EU and expect the Commission to address these inconsistencies with CORSIA, including the MRV rules for small emitters, as part of a 2020 review,” it says. “We have begun work to address these inconsistencies in the UK ETS and provide a full legislative basis for CORSIA MRV in 2021.
“In particular, we aim to include all five monitoring methods in UK ETS MRV (currently only two out of five methods are approved for use by both schemes) and also expand the MRV scope of a UK ETS to make flight reporting mandatory on all domestic and international flight routes for UK operators, enabling CORSIA compliance.”
To bring compliance cycles in line with CORSIA, the government considered whether to postpone the first UK ETS surrendering deadline for aircraft operators until 2025, “to make it clear that operators do not need to pay twice for the same tonne of CO2, while the rules of CORSIA-ETS interaction are still being agreed.” However, it has decided there would be no beneficial impact and will maintain an annual compliance cycle.
The government intends to keep current EU ETS arrangements on enforcement and penalties in the event of non-compliance by operators and will mirror proposed compliance changes in EU ETS Phase IV. The document details the establishment of a UK registry and how the rules may differ from the EU ETS registry regulations.
The 10-year aviation Phase I will be split into two sub-phases, with Phase I(a) running from 2021 to 2023, to mirror CORSIA’s pilot phase, and Phase I(b) from 2024 to 2030. The split phase structure will also mirror EU ETS aviation review periods.
“As the rules for CORSIA have now been set, we will make the necessary changes for a UK ETS to accommodate CORSIA by the end of Phase I(a) at the latest,” pledges the government. “We will ensure that by the start of Phase I(b) at the latest, participating aircraft operators will have clarity over the interaction of both carbon pricing scenarios.”
The overall UK ETS will be reviewed in 2028, with changes to be implemented in time for Phase II (2031-2040).
While committed to fully implementing CORSIA, the government says the UK has higher climate change ambitions than those set by ICAO. “We intend to go beyond participation in CORSIA by targeting further emissions reductions through the inclusion of aviation in a UK ETS,” it promises.
The government has begun a review on how a UK ETS could interact with CORSIA, which will examine how the UK can meet its national and international obligations “while ensuring aircraft operators will not have to submit both UK ETS allowances and offset credits for the same tonne of CO2 emissions.”
EU and US to back CORSIA baseline change proposal despite warnings of unintended consequences
Wed 10 June 2020 – EU Member States have adopted a proposal from the European Commission to back a fundamental change to CORSIA that would remove international aviation CO2 emissions in 2020 from the global aviation carbon offsetting scheme’s baseline. The dramatic fall in air traffic due to the Covid-19 pandemic could otherwise significantly increase the airline sector’s future offsetting costs. A 2019-only baseline would likely lead to no offsetting requirements from airlines during the initial three-year pilot phase starting in 2021. However, the Commission believes the change is necessary not only to support the crisis-hit industry but also to preserve support for CORSIA from other countries. The UK, the US and Latin American countries also favour the change, which is to be discussed by the ICAO Council during its current session. The ICAO Secretariat, meanwhile, cautions of the unintended consequences resulting from a quick decision.
Adopted in a written procedure on behalf of Member States, the decision by the EU Council to change the baseline period technically amends a corresponding Council decision from 2016 and the text will now be published in the EU Official Journal.
“The EU fully supports CORSIA as the multilateral mechanism for offsetting international aviation emissions and tackling global warming,” said Oleg Butković, Croatia’s transport minister, whose country currently holds the Council presidency. “Adapting the baseline is crucial to maintaining a similar level of ambition for the scheme and the commitment of ICAO states to the CORSIA pilot phase while taking into account the extremely difficult circumstances created by the pandemic for international air traffic.”
The Commission proposed another CORSIA rule change in the event of a 2019-only baseline being adopted by the ICAO Council during its current session, which runs until June 26. It called for the removal of an option States participating in the pilot phase can select for calculating aeroplane operators’ offsetting requirement. Although it acknowledged a higher 2019 emissions baseline is likely to lead to no or minimal offsetting requirements during the pilot phase, the Commission said the issue of the baseline, the extent to which international air traffic rebounds and the level of CORSIA’s ambition could be re-examined at the scheme’s first review in 2022.
With countries required to inform ICAO by the end of this month as to whether they intend joining CORSIA from the start, the EU is concerned that the additional financial burden of a lower baseline on aeroplane operators could lead to a lowering of support for the scheme.
The Commission’s proposal also noted that some countries have indicated they might try to use the opportunity of a possible baseline change to call for having different baselines for different countries, depending on their level of development, year of joining CORSIA or other criteria.
Eight European countries are represented on the current 36-member ICAO Council, including the UK, which has indicated its position on the baseline change is consistent with that of the EU’s.
“Tackling climate change is one of the most urgent and pressing challenges we face, which is why the government has set a bold 2050 net zero target for the UK,” said a Department for Transport spokesperson. “By supporting the proposal for the CORSIA baseline to be calculated using 2019 emissions, we are safeguarding the integrity of the scheme while also appropriately recognising the impacts of Covid-19 on the aviation industry.”
According to a Reuters report, the United States told a virtual ICAO meeting last Friday (June 5) that it too recommended the change and the Latin American Civil Aviation Commission had written to ICAO to add its support.
“The Latin American Civil Aviation Commission supports the change in the CORSIA baseline emissions calculation method,” a LACAC spokesperson told GreenAir. “The letter sent to the President of the ICAO Council specifies the preference for a solution that does not consider the 2020 emissions in the CORSIA baseline calculation method.”
The letter from LACAC, which represents 22 States, also urged the Council to change the deadlines specified in the CORSIA regulations for the submission of 2019 emissions to ICAO. Aeroplane operators were to submit their 2019 verified emissions report to their relevant State body by 31 May 2020 and States are to submit aggregated emissions through the CORSIA Central Registry by 31 August 2020.
In a recent post on the ICAO website, the ICAO Secretariat addresses the deadline issue and says any adjustment to CORSIA’s design features “requires careful consideration by the relevant ICAO bodies”.
The Council session is due to consider an analysis by ICAO’s environment committee, CAEP, of the Covid-19 impact on the design features. A change to the baseline, points out ICAO, also has implications for the ‘sectoral growth factor’ and the threshold for new entrant operators to the scheme.
“In addition to the impact assessment, the Council will also consider the legal and reputational aspects related to the various options, as well as the importance of maintaining the originally-agreed balance between the scheme’s economic impacts and environmental benefits together with its simplicity and practicality, whilst responding to this unprecedented crisis,” says the website.
In a paper presented to the Council, the Secretariat said considerations on the need and timing to change the CORSIA baseline and other design features needed to be based on the proper technical data and assessment.
“It is of paramount importance that any decision that may result in a change in the CORSIA design feature(s) should assure that CORSIA remains faithful to its original objectives as a practical, cost-effective scheme that produces environmental benefits to reach carbon neutral growth for international aviation from 2020, in a clear and transparent manner, without introducing a negative public perception or undermining ICAO’s leadership and reputation on CORSIA as the only global market-based measure applying to CO2 emissions from international aviation,” it said.
“It should also be noted that there may be unintended consequences of taking an early decision based on high uncertain levels of emissions recovery scenarios from 2021 onwards.”
The option of not taking a decision on the baseline change during the current session would provide more time to observe the evolution of Covid-19, collect more data and undertake more analyses “to facilitate a well-informed decision by the Council,” added the Secretariat. However, it acknowledged that by putting off the decision, the industry and carbon markets could lack the necessary certainty to take, respectively, proactive action in purchasing CORSIA emissions units and developing new emissions reduction projects.
US NGO Environmental Defense Fund (EDF) said the effect of changing the baseline would be to postpone the start of CORSIA by eliminating, in practice, its pilot phase, as under most post-Covid growth scenarios offsetting obligations would be removed for three to five years. It also raised concerns over whether the Council had the legal authority to change rules adopted by ICAO’s Member States at their Assembly.
“Countries at ICAO’s Council meeting this month should not make a hasty change to CORSIA’s fundamental structure,” argued EDF’s Annie Petsonk. “Instead, they should ensure the integrity of ICAO’s climate programme by leaving the baseline as the average of 2019-2020 emissions. They should emphasise to participating countries the availability of CORSIA’s pilot phase flexibility mechanism, and work with the other ICAO Member States to evaluate whether, at their next Assembly in 2022, changes to CORSIA are needed.”
Speaking during a webinar hosted by the International Emission Trading Association earlier today, Rene Velasquez, Head of Global Carbon at CBL Markets, said changing the baseline was a pragmatic and logical approach to the impact of the Covid-19 crisis on the airline sector.
“It is paramount we support the airlines in the bad times as well as the good,” he said. “Although I understand the position of retaining the baseline as it currently stands, the reality is that initially CORSIA is voluntary and if it becomes too onerous a system we risk countries being lobbied by their airlines to opt out. If we do that we are effectively diluting the scheme’s overall ambition. Let’s support the industry during its recovery phase and look to ratchet up ambition over time.”
CBL Markets, part of XCHG, has begun working with IATA since January to set up the Airline Carbon Exchange, through which airlines can source both voluntary and CORSIA-eligible emissions units. Velasquez said 14 out of 30 of the largest airlines invited to join a pilot phase of the exchange had so far accepted, despite the pandemic’s impact. He noted airlines had already started making significant voluntary offsetting commitments against carbon net zero or neutrality targets.
According to IATA’s latest economic performance report, global passenger traffic will likely fall by 54.7% in 2020 from 8,680 billion RPKs in 2019 to 3,929 billion in 2020. However, IATA is anticipating a 55.2% rebound in RPKs in 2021 over 2020 to 6,099 billion.
In terms of global carbon emissions, IATA is expecting a 37.1% fall this year, from 914 million tonnes in 2019 to 574 million tonnes in 2020 and then a 30.3% increase to 748 million tonnes in 2021. It is forecasting industry fuel efficiency will improve by 1.1% in 2020 as older aircraft will be retired or put into storage.
IATA is forecasting airlines will lose $84.3 billion in 2020 as revenues fall by 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $14.8 billion as revenues rise to $598 billion.
“Financially, 2020 will go down as the worst year in the history of aviation,” commented IATA’s Director General, Alexandre de Juniac.
Danish large-scale project plans using offshore wind power to deliver sustainable aviation e-fuels by 2030
Fri 5 June 2020 – A partnership of Danish green energy and transport organisations, including Copenhagen Airports and SAS, has been formed to explore the potential for a ground-breaking hydrogen and e-fuel production facility as soon as 2023. When fully scaled by 2030, using renewable electricity, the Power-to-X project could deliver more than 250,000 tonnes of sustainable fuel for buses, trucks, maritime vessels and airplanes. Production would potentially be based on a total electrolyser capacity of 1.3 gigawatts, which would likely make it one of the world’s largest facilities of its kind. The requirement for a large-scale supply of renewable electricity could potentially come from offshore wind power produced at Rønne Bank off the island of Bornholm. The partners are seeking public co-funding to conduct a full feasibility study of the project.
As well as Copenhagen Airports and SAS, other partners include A.P. Moller – Maersk, DSV Panalpina, DFDS and green energy company Ørsted. COWI and BCG are acting as knowledge partners for the project, which would be located in the Greater Copenhagen area and is being supported by the Municipality of Copenhagen.
Although impacted by the Covid-19 pandemic, the partners said their long-term commitment to fighting climate change remained intact and the project would combine the dual objectives of accelerating the green transformation and providing economic stimulus to the Danish economy post-crisis.
“Whether we operate in road transport, shipping or aviation, we all have a major task to contribute to the sustainable transition in Denmark,” commented Thomas Woldbye, CEO of Copenhagen Airports. “The challenge of creating a future-proof and sustainable fuel is common to everyone in the transport sector, and the fact that we are now working together in a partnership is crucial for us to be able to produce sustainable fuel in the necessary quantities. It also supports the ambition to transition Danish aviation to become completely free of carbon emissions in 2050 and make Denmark a pioneer in the development of future climate-friendly fuels.”
The partners envision developing the project in three stages. The first stage, which could be operational by 2023, comprises a 10MW electrolyser to produce renewable hydrogen used directly to fuel buses and trucks.
Stage two comprises a 250MW electrolyser facility which could be operational by 2027 when the first offshore wind power from Bornholm could be delivered. This facility would combine the production of renewable hydrogen with sustainable carbon capture from point-sources in the Greater Copenhagen area to produce renewable methanol for maritime transport and renewable jet fuel for the aviation sector.
Stage three, which could be operational by 2030 when the offshore wind potential at Bornholm has been fully developed, would upgrade the project’s electrolyser capacity to 1.3GW and capture more sustainable CO2, enough to supply more than 250,000 tonnes of sustainable fuels to be used in buses, trucks, maritime vessels and airplanes. The project has the potential to displace 5% of fossil fuels at Copenhagen Airport by 2027 and 30% by 2030, claim the partners.
They pointed out the cost of offshore wind in north-west Europe had declined by around 70% since 2012 but sustainable fuels still came at a higher cost than fossil fuels. To be cost-competitive, they said, governments and industry would have to come together to create a framework that incentivised private investments in large-scale sustainable fuel production.
The partners will now engage with regulatory authorities on the framework and policies needed to support the development of sustainable fuels at scale in the Danish transport sector. If the feasibility study confirmed the viability of the project, they expect a final investment decision for the first stage could be taken as soon as 2021.
“With the right policy framework in place, this project could be a defining leap forward for the production of sustainable fuels in Denmark, which will further reinforce Denmark’s role as a global leader in technologies and business models for a sustainable future,” said Henrick Poulsen, CEO of Ørsted, which claims to have built more offshore wind farms than any other developer in the world.
Added Simon Pauck Hansen, EVP and COO of Airline Operations, SAS: “The infrastructure aviation enables has a significant contribution to the global society. SAS has very ambitious targets to reduce its climate-affecting emissions and one of the key drivers is to use sustainable aviation fuels. We support multiple initiatives and projects in our home market and hope that this project can commercialise and become an accelerator for the transition to decarbonised aviation.”
LanzaTech launches new LanzaJet venture following investment from Suncor and Mitsui to build new SAF demo facility
Fri 5 June 2020 – Alcohol-to-jet specialist LanzaTech has launched a new company, LanzaJet, to produce sustainable aviation fuel (SAF) and renewable diesel from sustainable ethanol sources. Investment in the venture totalling $25 million has been secured from Canadian integrated energy company Suncor Energy ($15m) and Mitsui ($10m). The funding will be used to build a demonstration plant expected to produce 10 million gallons per year starting in 2022. This initial investment, coupled with participation from All Nippon Airways (ANA), will complement an existing $14 million grant from the US Department of Energy to enable the construction at LanzaTech’s Freedom Pines site in Soperton, Georgia. In addition to its equity investment, Suncor has contracted to take a significant portion of the SAF and renewable diesel.
LanzaJet will be headed up by Jimmy Samartzis, who has joined as CEO and was formerly with United Airlines, Airlines for America and IATA.
“The launch of LanzaJet marks an historic milestone in the clean energy transition that is underway globally. I’ve been part of many renewable energy and sustainability firsts over the last decade, and this one is the most exciting,” he said. “The commercialisation of LanzaJet – built on the shoulders of LanzaTech, Suncor, Mitsui, ANA and with the support of the US Department of Energy – gives our world, and aviation in particular, an important solution in shaping a cleaner future.”
LanzaTech has been developing for some years a technology to convert industrial waste gases to ethanol, which can then be converted to sustainable jet fuel. However, to accelerate commercialisation and production of SAF, the biotech company has come up with a quicker route to market.
“Achieving our global climate goals requires scaling new, transformative technologies rapidly. This requires new methods of financing that enable scaling from lab to pilot to demo to commercial without stopping after each step to raise more cash,” explained Jennifer Holmgren, CEO of LanzaTech. “Suncor, Mitsui and ANA are stepping up to show that achieving meaningful scale will require new technologies, new business models and new approaches. I am delighted to see LanzaJet take off and to see Jimmy Samartzis lead the team as it brings this sustainable solution to market.”
The LanzaJet process can use any source of sustainable ethanol for jet fuel production, including, but not limited to, ethanol produced from LanzaTech’s proprietary carbon recycling platform. The US Energy Department’s Pacific Northwest National Laboratory (PNNL) has developed a unique catalytic process to upgrade ethanol to alcohol-to-jet synthetic paraffinic kerosene (ATJ-SPK), which LanzaTech has taken from laboratory to pilot scale.
“Our goal is that ATJ will allow a distributed feedstock solution, where a variety of locally available and sustainable sources of ethanol can be converted,” said a LanzaTech spokesperson. “In some cases, it may make sense to use ethanol from industrial waste gases, or other wastes and residues, processed using our technology and in other locations where there could be lots of second-generation sustainable ethanol available.”
LanzaTech’s first commercial plant in China has so far produced over 10 million gallons of ethanol from recycled steel mill emissions. Last year, Danish bio industrial investor Novo Holdings made a $72 million investment to grow LanzaTech’s sustainable fuels and chemicals business.
LanzaTech acquired the Freedom Pines biorefinery in 2012 and was where initial ATJ volumes were produced for flights undertaken by Virgin Atlantic and ANA. It is also being used to scale LanzaTech’s chemical platform. Construction of the ATJ commercial demonstration plant is expected to start in 2021 and be producing fuel by 2022. The site is around 250km from Atlanta but whether the SAF will be supplied to Atlanta Airport has yet to be defined. “We are working with Suncor and ANA to determine the best locations,” said the spokesperson.
Early last year, ANA signed an offtake agreement with LanzaTech to purchase its ATJ fuel. Following on from this agreement, ANA, Mitsui and JXTG Energy were selected by Japanese public R&D body NEDO to conduct a feasibility study on scaling the LanzaTech ATJ platform in Japan, with the aim of establishing a sustainable domestic supply chain for ATJ and long-term full commercial deployment. ANA and Mitsui launched the project by using SAF made from recycled carbon on a Boeing 777-300ER ferry flight from Seattle last October.
“We are pleased to launch LanzaJet along with excellent partners LanzaTech, Suncor and ANA,” said Toru Matsui, Managing Officer, COO of Mitsui & Co. “This partnership demonstrates our continuing commitment to improving the sustainability of the aviation industry and supports our ambition to be the first in Japan to produce SAF on a commercial scale. The SAF produced by LanzaJet will support the development of a global SAF supply chain, which has the potential to significantly reduce emissions from aviation and help to create a low carbon society.”
Added ANA EVP Akihiko Miura: “We believe that this partnership is a great step forward for carbon-neutral growth initiatives. ANA is happy to share in this innovative endeavour and to be a part of a carbon-free future in the aviation industry.”
Suncor and Mitsui are aiming to invest further in the construction of commercial production facilities after the demonstration meets all its technical and economic targets. The phased approach will see the initial investment followed by a capital call once all the demonstration milestones have been met, said LanzaTech.
“We believe this technology will provide a solid foundation for the commercial production of sustainable aviation fuel and renewable diesel,” said Suncor CEO Mark Little. “These products are very complementary to our existing product mix and we see growth potential in both North American and international markets.”
COMMENTARY: Going green and tackling the climate challenge remain top priorities for Europe’s regional airlines
Fri 18 June 2020 – Despite the challenges facing the industry today as a result of Covid-19, green issues remain at the top of the agenda for our members, writes Montserrat Barriga, Director General of the European Regions Airline Association (ERA). Hence, ERA conducted and has now published its first sustainability report, outlining our sector’s efforts in the fight against climate change, which represents one of the biggest threats to the existence of the air transport industry. With movements such as ‘flygskam’ (flight shame) having grown exponentially in 2019 and negatively impacting aviation demand, tackling the climate challenge has become a matter of survival for the aviation sector. The regional airline industry has been responding to this public and political pressure, and working to achieve efficiency improvements.
ERA’s Green and Sustainable Connectivity report – which was conducted prior to the Covid-19 pandemic – outlines these efforts, as well as ERA’s airline members’ emissions data and a technology review exploring the different decarbonisation technologies available for aviation, including benefits and barriers for implementation.
The aviation sector has long been concerned about its environmental footprint and in 2009 it became the first industry to set sector goals for CO2 emission reductions globally. These goals included to stabilise net CO2 emissions from 2020 through carbon-neutral growth and to reduce net CO2 to half of 2005 levels by 2050. As the report highlights, since setting these ambitious goals the industry has continued to improve its environmental efficiency by reducing average fuel burn by 24% between 2005 and 2017, and each new generation of aircraft is on average 20% more fuel efficient than the model it replaces.
With not only one solution to tackle the issue, the sector has turned to a four-pillar approach, allowing the different market segments within the industry to use the most appropriate and feasible solution available to them to address the climate challenge. These measures include market-based measures, technology improvement, infrastructure and operations improvement, and sustainable aviation fuels (SAF).
Through research conducted with ERA member ZeroAvia, a section of the report seeks to investigate the viability of decarbonisation technologies that target the propulsion systems of existing aircraft size categories. Until recently, SAF and efficiency improvements were the only supply side emission reduction levers viewed as realistic by the industry. The situation has evolved rapidly, however. The electric transport revolution that is burgeoning in road vehicles has now swept over to aviation. Improved power density of components, as well as improved energy density of energy storage mechanisms, have turned electrified aircraft from a utopian vision into a reality, with electric-powered planes taking to the skies.
Just as there are diverging technological approaches to the development of more sustainable jet fuel, there are different solutions to electrify, including hybrid electric (typically combining a conventional gas turbine with an electric system), battery-electric and hydrogen-electric. The report particularly looks at the most cost-efficient option for the regional sector by focusing on three different aircraft types: less than 20-seat turboprops, 50-80 seat turboprops and 100-120 seat small narrow-body jets.
Based on a survey carried out among ERA airline and manufacturer members, electrification of 100-seat aircraft is not expected to be introduced before 2035 and for 50-80 seats by 2030, but for 20-seat aircraft perhaps as early as 2025. Turboprop aircraft with less than 20 seats are therefore clearly the first expected to be electrified, with several prototypes already in the air.
Given the nature of regional aviation – characterised by short-haul flights – there is a significant opportunity for ERA airline members to decarbonise with new technology, and electric or zero-emissions aircraft have potential for lower costs. Our report emphasises that the regional sector lends itself to new, clean technologies and should therefore be the forerunner for testing and selecting the right technology needed to decarbonise the industry as a whole.
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