ISLAMABAD: The aviation sector is at a critical juncture, with updated state action plans for decarbonisation due to be submitted to the International Civil Aviation Organisation (ICAO), the World Economic Forum (WEF) says in a new report.
The report, produced by ‘Airports of Tomorrow’, a WEF initiative bringing together leaders from across the aviation industry, says industry stakeholders are increasingly looking to advance aviation decarbonisation activity in tandem with boosting growth post-Covid-19, posing challenges to progress on sustainability.
The actions that industry and governments across the world take this year will be vital to ensure the aviation sector remains on the right flight path to meet internationally agreed targets, including reducing the carbon intensity of jet fuel by 5 per cent by 2030 and attaining net-zero international aviation by 2050, according to the report.
Alignment of SAF policies across regions and longevity of subsidies are crucial for encouraging investment and ensuring consistent SAF adoption across regions. In 2024, Asia Pacific emerged as a key market: several countries introduced supportive policies, while China is expected to unveil detailed SAF policies this year.
In Pakistan, the International Finance Corporation of the World Bank group is providing up to $35 million in equity and debt financing to SAFCO Venture Holdings Ltd (SAFCO Ventures) to help establish Pakistan’s first greenfield sustainable aviation fuel (SAF) facility, which will convert thousands of tonnes of used cooking oil and other waste oils into aviation fuel, helping to reduce global emissions.
The WEF report says the availability and cost of SAF are the biggest challenges for aviation decarbonisation in 2025. Airlines need to commit to long-term SAF offtake agreements, but de-risking mechanisms are vital as the risks of advanced SAF production technologies and varying regional policies pose significant hurdles.
More corporate involvement and favourable policies are essential to attract capital and support SAF projects globally.
Geopolitics is the top non-sustainability challenge affecting progress on decarbonising aviation. The withdrawal of the US from the Paris Agreement in early 2025 and the “America First” trade policy are being closely monitored by the aviation community, as increasing protectionism and tariffs pose significant risks.
Geopolitical tensions are destabilising feedstock exports and fuelling domestic energy security concerns. International scrutiny on fairness and competitiveness adds to the complex dynamics at play, report fears.
As aviation’s reliance on SAF increases, scrutiny of the sustainability credentials of feedstocks will intensify.
Concerns around land-use change, deforestation, poor agricultural practices, food security and biodiversity impacts have led to regulatory restrictions and bans on certain biofuels.
Improved transparency, research, and consistent sustainability standards are essential to address these risks and support the development of alternative SAF production pathways.
The report says despite easing inflationary pressures and encouraging profitability figures, the global economic outlook remains a concern for aviation executives, particularly in emerging markets. Rising costs in labour, supply chain bottlenecks and regulatory uncertainty are impacting profitability and affecting the sector’s focus on the net-zero agenda.
Published in Dawn, March 16th, 2025
