1. A Global Framework For Addressing Aviation CO2 Emissions
Paul Steele
Director Aviation Environment
IATA

2. Aviation is a key driver of socio-economic development
2.2 Billion passengers
32 Million jobs
8% of global GDP (US$ 3.5 trillion)
2% of global man-made CO2 emissions
Major driver of tourism and trade

3. Aviation faces emissions challenge……
1600
Pre-recession
1400
ICAO forecast
CO2 emissions from the global fuel
burn of commercial airlines
Post-recession
1200
IATA forecast
1000
Million tonnes CO2
800
600
628 Mt
(2010F)
400
200
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
2026
2029
Source: IATA 3

4. …..but our track record is strong30 35 40 45 50 55 60 65 70
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
Fuel efficiency, litres/100 TKP
400
500
600
700
800
900
1000
1100
1200 CO 2
million tonnes
Fuel efficiency
Emissions at
frozen 1990
technology
Actual Emissions
3.3 Billion tonnes of
CO2 saved

5. Industry Commitment on Climate Change
2008

6. Our four-pillar strategy:
Invest in new technology
Fly more efficiently
Build and use efficient infrastructure
Use effective economic measures
The IATA Four Pillar Strategy Guides will continue to guide our efforts
Investment in technology
Better operations
Improved infrastructure
Economic measures
This was endorsed by ICAO at the 2007 Triennial Assembly 6

7. Global industry targets
2010
2020
2050
1.5% p/a fuel efficiency
Working towards CNG
CNG from 2020
Implementation of global sectoral approach
50% reduction in net CO2 emissions over 2005 levels 7

8. CO2 Abatement cost curve in 20205 50 55 60 80 75 70 90
Optimizing cost index 85 65
USD/tCO 2 -
200
800
600
1,000
MtCO2
400 45 40 35 30 25 20
150 15
145
140
135
130
125
120
110
105
100 10 Re
engining No
tankering
Reduced speed operation with current fleet
Engine retrofit/upgrades
Early retirement
115
Biofuels
Cabin weight reductions
Wingtips
Use of ground power
Takeoff and Landing Procedures
Center of Gravity
Pilot Technique
Fuel Management 95
RVSM Russia
Taxiing with some engines shut down
Drag reduction
Next Gen
Flexible Usage of Military airspace
PRD
Flexible tracks North Pacific
Airspace China redesign
Gulf region
European ATM Improvements
Carbon price
US$/tCO
Jet fuel price;
100 $/barrel CO
Marginal Abatement Cost Curve in 2020
for global commercial airline fuel burn
Source: IATA Carbon Model

9. Emissions reduction roadmap
No action
CO2
emissions
“Frozen technology” emissions
Gross emissions trajectory
CNG 2020
-50% by 2050
(schematic)
2005
2010
2020
2030
2040
2050

10. Emissions reduction roadmap
“Frozen technology” emissions
Known technology, operations and infrastructure measures
Carbon-neutral growth 2020
Gross emissions trajectory
No action
CO2
emissions
Tech
Ops
Infra
CNG 2020
-50% by 2050
(schematic)
2005
2010
2020
2030
2040
2050

11. Emissions reduction roadmap
“Frozen technology” emissions
Known technology, operations and infrastructure measures
Biofuels and additional technology
Carbon-neutral growth 2020
Gross emissions trajectory
Economic measures
No action
CO2
emissions
Tech
Ops
Infra
Biofuels + add. Tech
CNG 2020
-50% by 2050
(schematic)
2005
2010
2020
2030
2040
2050 11

12. 2010 2020 2050 2010 to 2020 1.5% p/a fuel efficiency
Working towards CNG
CNG from 2020
Implementation of global sectoral approach
50% reduction in net CO2 emissions over 2005 levels 12

13. 150 million tonnes of cuts needed in 2020
CO2 from commercial
airline fuel burn
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
400
500
600
700
800
900
1000
1100 CO 2
million tonnes
Frozen technology
at 2010 fuel efficiency
2010–2020: +1.5% p.a. fuel efficiency
150 million tonnes of cuts needed in 2020
728 million tonnes of additional cuts required by 2020 to make + 1.5% pa efficiency target
Source: IATA Carbon Model 13

14. Industry driven measures % Emissions reduction potential to 2020
Analysis: Key conclusions 13
Govt. support needed
Key emissions reduction drivers to 2020
Fleet renewal
Infrastructure
Operations
Biofuels
Industry can deliver on fleet/ load factor and operations
Governments need to support infrastructure and biofuels
Alternative Fuels
Infrastructure
Retrofits
Operations
Load Factor
Fleet Renewal 12 1 11 16
Industry driven measures 47
% Emissions reduction potential to 2020
Source: IATA Carbon Model

15. How can governments help?
Invest in ATM improvements – e.g. NextGen and SESAR
Invest in R&D funding for new technology
Promote scaling up and of sustainable biofuel production

16. Our biggest opportunity is sustainable biofuels
Second & third generation biofuels - e.g. camelina, algae
With the potential to reduce our carbon footprint by up to 80%
Full certification by Q1 2011
Next step: scaling up and commercialisation 16

17. Biofuels could completely replace Jet A-1
Source: E4tech 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Proportion of jet demand
High
Central (high)
Central (low)
Low
Very low

18. Promotion of aviation biofuels Governments have their part to play too
R&D funding
Pilot projects
Fiscal & investment incentives
Transport & energy policy 18

19. Emissions reduction roadmap
“Frozen technology” emissions
Known technology, operations and infrastructure measures
Biofuels and additional technology
Carbon-neutral growth 2020
Gross emissions trajectory
Economic measures
No action
CO2
emissions
Tech
Ops
Infra
Biofuels + add. Tech
CNG 2020
-50% by 2050
(schematic)
2005
2010
2020
2030
2040
2050 19

20. Market-based measures
Industry recognises that MBMs will be needed to “close the gap”
But we need positive not punitive measures
Fiscal/financial/policy measures to:
Accelerate R&D
Incentivize technical/operational improvements
Promote alternative fuels
Emissions trading can play a role but must be global
Industry offset mechanisms should also be recognized

21. How can governments help?
By agreeing
A coordinated policy approach
A global framework under ICAO
By avoiding
A fragmented policy approach
Unilateral use of national/regional measures

22. Uncoordinated patchwork
“Green” taxes
$3.5bn
$1.2bn
$0.2bn
$ ?
$25bn?
$100m
Emissions trading
$ 1-13 bn
$ 4 mn
$ ?
$ ?
$ ?
$ ?

23. Concerns with Environment Taxes
“Green” taxes do nothing for the environment
Money goes into central treasury funds
Netherlands tax repealed after 18% shift in traffic across borders
Distance banding causes market distortions
UK APD distortions because based on capital cities
Cheaper to fly to Hawaii than Bermuda
Taxes hurt developing country trade and tourism
Usually distant from tourism source and trade target markets

24. The ICAO 37th Assembly was a unique opportunity for governments
to agree on a global
framework… 24

25. ICAO 37th Assembly Resolution
Positives:
First ever global sectoral agreement to reduce carbon emissions
Reflects aspirational industry goal of carbon- neutral growth from 2020
Lists 15 principles for MBMs, in line with industry priorities, e.g.
Transparency and simplicity
No duplication
Minimize leakage and distortion
Appropriate access to all carbon markets

26. Aviation’s economic impact
If aviation were a country, it would rank 21st in terms of GDP –same size as Switzerland
35% of goods transported worldwide – by value – are sent by air, but only 5% by volume
40% of international tourists travel by air
Air travel supports 1.3% of total employment in Africa, contributing $10 billion to GDP and is 4 times as productive as the economy as a whole
In Latin America, 1.8 million jobs are supported by aviation, contributing $22 billion to the GDP

27. The food miles debate High-value, perishable foods
Supporting emerging economies
Air-freighted fresh produce to the UK alone supports 1.5 million jobs in Africa
‘Food miles’ argument doesn’t stand up – Oxfam report
You must look at the full lifecycle and most produce grown in Europe requires large amounts of energy
Lincoln University study showed 1kg of New Zealand lamb shipped to the UK had a smaller carbon footprint than 1kg of British lamb

28. Useful Reports

29. IATA carbon offset program
17 Airlines – 6% of global traffic
TAP Air Portugal won UNESCO “Planet Earth Award” in 2010.
Large credible offset provider sources high quality carbon credits.
Carbon credits are compliance grade CERs (under CDM/Kyoto Protocol)
Offering passengers a portfolio of offset projects
large geographical coverage
social and economic benefits for local communities.
IATA Carbon Calculator
ICAO methodology
enhanced with real airline data.
Government approved offset program (DECC-UK QA)
Phase II of the program has started – corporate travel/online agents.

30. Carbon labelling Flybe first airline to label planes New CO2 standard
Noise
Fuel Consumption
CO2 emissions
New CO2 standard
Being developed by ICAO and industry
Standard for new aircraft types
Ready in 2013

31. A global framework for addressing aviation CO2 emissions
Q & A?