US aerospace industry proposes 'cash for carbon' programme to help fund NextGen technology upgrade
Wed 22 Sept 2010 – Implementation of the US NextGen air traffic management system is expected to not only bring substantial cost and time savings to airlines but also environmental benefits in terms of reductions in emissions and noise. The Federal Aviation Administration (FAA) estimates full implementation could realize potential reductions in greenhouse gas emissions of up to 12 percent by 2025. However, NextGen comes at a sizeable cost and operators across the US will be required to spend billions of dollars to equip aircraft with advanced technology (‘equipage’). The question is who should pay for it? A new report published by the Aerospace Industries Association (AIA) recommends the setting up of a ‘cash for carbon’ programme in which operators commit to achieving carbon neutral growth targets in return for government grant money and loans.
The report, ‘Civil aviation growth in the 21st century: meeting capacity and environmental challenges’, identifies the safe expansion of airspace capacity and addressing growing environmental and energy concerns as the two most significant challenges facing civil aviation today, and for the foreseeable future. However, says the AIA, to meet the challenge, government and industry cooperation, collaborative strategies and pragmatic policies will be required.
“Civil aviation is a keystone of the US and global economies,” commented AIA President & CEO Marion Blakey, who announced the release of the study at a Senate Aerospace luncheon in Washington last week. “The global economic slowdown has masked the limitations of our national airspace system. Even so, full economic recovery requires a strong civil aviation sector. If we’re to meet the rising demand for civil air transportation in an environmentally responsible way, we’re going to need strong public investment in sustainable aviation infrastructure.”
The report says that traffic delays are down in the US and aviation CO2 emissions are 10% lower than five years ago. “However, as the global economy recovers, these limitations [in the national aviation system] will resurface and overwhelm our national aviation infrastructure unless significant improvements are made,” it states.
“The United States’ ability to safely and efficiently handle more aircraft of all types will not be achieved through incremental modernization but by a significant transformation of the system. The FAA’s Next Generation Air Transportation System (NextGen) is the programme to achieve that transformation.”
NextGen will move the US from an ageing, radar-based system of air traffic control to a satellite-based system of air traffic management, leveraging Global Positioning System (GPS) technology. A fundamental enabling technology of NextGen is Automatic Dependent Surveillance-Broadcast (ADS-B), which uses GPS to pinpoint an aircraft’s precise location and constantly broadcast that information and other critical data to nearby aircraft and air traffic controllers in real-time.
ADS-B is undergoing a phased implementation. Installation of 794 ADS-B ground-based transmitters – largely achieving US continental coverage – has a contracted completion date of 2013. The system is currently being deployed on a limited basis and aircraft operators in these regions are reporting significant reductions in delays and therefore fuel costs and emissions. However, for the full benefits of ADS-B to be realized, a critical mass of operators must be equipped with the capability.
“Not surprisingly, the timing and financing of the equipage of aircraft with ADS-B capability is a core concern of both the FAA and aircraft operators, including airlines and the general aviation community, as well as equipment manufacturers,” says the report.
The FAA estimates its own costs associated with full implementation of ADS-B and broader NextGen architecture by 2025 will total between $15 billion and $22 billion, with an additional $14-20bn likely to be incurred by airlines and other users of the national airspace system who will be required to retrofit their aircraft to make them NextGen compatible. Industry experts and manufacturers believe the cost will be considerably lower, perhaps $12 billion or less.
“Whether the final price to equip is under $12bn or over $20bn, it is clearly a sizeable investment for an airline industry that continues to struggle to return to profitability and for a general aviation community that counts individual aircraft owner-operators who fly recreationally among its core constituency,” argues the report.
Although equipage remains largely voluntary in the near term, the FAA issued a final rule in March that mandates installation of ADS-B ‘Out’ equipment by 2020 for all aircraft flying in Class A, B and C airspace, which effectively covers all large commercial transports, business jets and turboprops.
Not surprisingly, manufacturers of the technology and most aircraft operators have been campaigning for federal funding for equipage. However, the report acknowledges that a fiscally constrained climate requires a more pragmatic consensus between government and the private sector over funding for transportation infrastructure.
“Clearly, the equipage funding issue needs more creative approaches that balance the concerns and constraints of government and industry,” it says.
Because of the significant environmental benefits associated with NextGen, AIA has proposed a ‘cash for carbon’ concept as one such innovative approach. It describes it as “a contract between government and industry, with both parties held accountable to measurable commitments.”
Under the contract, in return for funding from government grants, government-backed loans and simple loans, operators would have to commit to reduce CO2 emissions, whereas the FAA would be required to achieve agreed metrics for improved system performance, or the completion of certain milestones such as specific airspace redesigns. The Obama administration’s recently announced Transportation Infrastructure Bank proposal would, says AIA, be an excellent and ideal source for funding the initiative.
In order to receive grants or loans from the Bank, operators would have to sign on to the aviation industry’s commitment to carbon-neutral growth from 2020. Those operators failing to meet their targets would be required to repay grant money, pay higher interest rates on loans and/or purchase carbon offsets.
It suggests the FAA would use a portion of the programme to fund cutting-edge R&D in quieter, more environmentally-friendly engines, airframe designs and alternative fuels, further enhancing the FAA’s CLEEN initiative.
According to AIA, initial reaction to the ‘cash for carbon’ proposal from key groups representing the US civil aviation – including aircraft equipment manufacturers and most operators – has been generally positive.
The report also addresses a number of other important issues such as the challenge of harmonizing NextGen with other air traffic management systems around the world, in particular Europe’s own SESAR modernization programme. It also looks at other technology developments to reduce the sector’s environmental impact, the promise of sustainable biofuels and the effectiveness of market-based measures, such as the EU Emissions Trading Scheme and other regional solutions.