Indian Aviation Industry Needs More Efficient Measures to Achieve Sustainability Goals

India IPO

Updated Jun 26, 2024

India's CO2 emissions are set to ratchet up in the coming years as it will experience the most significant increase in energy demand through 2040. The government with the aviation industry and entrepreneurs need to collaborate closely to achieve its sustainable goals

Indian Aviation Industry Needs More Efficient Measures to Achieve Sustainability Goals

Aviation contributes 2.5% of global emissions and 12% of transportation emissions. In India, the aviation sector accounts for 1% of CO2 emissions but is expected to grow rapidly, increasing its carbon footprint in the coming years.

As India's energy demand is projected to rise significantly by 2040, the aviation industry's expansion will be closely linked to the country's growth as the fifth-largest economy.

By 2030, a billion people are expected to join India's middle class and likely start flying, pushing the travel industry towards sustainability to meet the nation's goal of carbon neutrality by 2070 and generating 500GW of power from non-fossil fuel sources by 2030.

Rising Carbon Footprint of Air Travel

A CEEW report indicates that by 2050, domestic air travel will dominate India's CO2 emissions due to its high emission intensity, while the electrified road transport sector is expected to reach a 75% market share with zero direct emissions. The International Civil Aviation Organisation (ICAO) has outlined four areas to promote sustainable aviation growth and combat climate change:

1. Technology: Develop advanced airframes and engines to reduce energy use.
2. Air Traffic Management and Operations: Implement greener options like direct routing and gliding to land.
3. Market-Based Measures: Use carbon offsetting and reduction schemes.
4. Sustainable Aviation Fuels (SAFs): These could reduce CO2 emissions by up to 80%.

Exploring Alternative Energy Sources

Over the next three decades, the aviation industry has the potential to integrate alternative energy sources. Options like Sustainable Aviation Fuels (SAFs), LH2 Direct Combustion, H2 Fuel Cells, and Battery Electric power small aircraft for regional and short-haul flights.

SAFs represent the most immediate solution, requiring no technical modifications for use in Boeing airplanes. SAF production has a smaller carbon footprint than traditional jet fuel and supports broader sustainability as its feedstock does not interfere with food production, water use, land clearing, soil fertility, or biodiversity.

India's Role in SAF Feedstock

India has the potential to be a significant SAF feedstock hub. Experts at the WEF’s Clean Skies for Tomorrow initiative estimate that 166 million tons of feedstock could produce over 22 million tons of SAF annually. By providing lower-cost, abundant feedstock for SAF, India could address a major global challenge.

Although SAF is currently 200-500% more expensive than traditional fuel, achieving the goal of flying 100 million passengers on at least 10% SAF by 2030 would incur a cost difference of $335 million. Collaboration between the government, aviation industry, and entrepreneurs is crucial to reaching this goal.

Cost Per Seat May Not Be High

The International Air Transport Association estimates that the cost of SAF per seat is comparable to a soda or snack for a domestic flight and a meal for a long-haul flight. This suggests that the per-seat cost of sustainability may not be as high as perceived.

Globally, airlines representing 34% of passengers and 40% of RPKs have committed to a significant proportion of SAF by 2030. Accelerating this transition requires supportive government policies, feedstock diversity, thorough R&D for cost competitiveness, supply growth, capital access for new production, and market-based incentives to make SAF price competitive.