Will 2021 see the rise of sustainable aviation? Since 2020 has seen an unprecedented drop of air traffic, airlines must shift to greener solutions.
Since the European Union signed in December 2019 a pledge to cut gas emissions to zero by 2050, airline companies seem to have no choice but to switch to a completely new strategy.
Several countries seem to be ahead, such as the United Kingdom, where the company Essar Oil plans to invest £600 million in a waste-to-fuel facility in Ellesmere Port.
In America, United Airlines have announced that they have ordered 200 electric car taxis in order to facilitate short commutes, highlighting the low carbon footprint.
The rise of “sustainable aviation”
Coronavirus has brought aviation back to the last century. According to the CAPA Fleet Database, “the number of passenger jet aircraft in service with the world’s airlines at the end of 2020 was back to 2008 levels”.
Axios reportedly confirmed that U.S. domestic flights had almost 59% less passengers from 2019, while international flights dropped by 70.4%.
April 2020 was the worst month of the year with a historical drop of 96.1%. Things seemed to improve by the end of the year, with a year-to-year 61.5% decrease in December.
As a result, many airline companies have decided to switch to sustainable aviation”, such as United Airlines, who has ordered 200 electric cars. “In 2020, we pledged to become 100% green by reducing our greenhouse gas emissions by 100% by 2050—without relying on traditional carbon offsets”, added the company in a statement.
Within a few weeks, United share jumped from $24 in March 2020 to $49.70 in February 2021.
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Air France has a “green duty”
On the other hand, the Old Continent is handling the situation quite differently.
With a law signed by the European Union leaders earlier in December 2019, Europe-based airlines will have no choice but to reduce their emissions to zero by 2050.
In order to help companies, the EU has announced a €100 billion ($111 billion) in funding for companies.
Congratulations to Dutch airline KLM, who say that they operated their first flight with synthetic kerosene. 👏 This is an impressive and exciting step towards a #SustainableAviation industry: https://t.co/G2Nowwx7cR
— Deutsche Aircraft (@Deu_Aircraft) February 19, 2021
Some countries seem stricter than others, such as France that has demanded Air France-KLM to reduce by half its CO2 emissions by 2024.
“The French government is also calling on Air France to renew its fleet with more efficient aircraft, and to commit to sourcing 2% of its fuel requirements from sustainable sources by 2025.” , adds Cirion.
Air France shares have already doubled since the start of Covid, going from $3 to $6.
England focuses on green fuel facilities
In the meantime, new initiatives are springing in England, where alternative fuel facilities are bringing hope for the future of air transportation.
The biggest plant is estimated to cost £600 million, about $845 million.
In the North West of England, “after Essar Oil signed a deal with Fulcrum BioEnergy to build an innovative facility that would convert non-recyclable household waste into jet fuel”, confirmed BusinessGreen.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.
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