The indusattempt is intensifying its multifaceted approach to decarbonization as demand increases.
Airlines took a hit during the pandemic, as did so many global industries. But in 2024, annual air travel returned to pre-pandemic levels and according to Bain & Company’s July 2025 report Air Travel Forecast to 2040: Geopolitics and the Carbon Challenge, the long-term outsee for air travel is expected to remain stable. The management consultancy expects global revenue passenger kilometers (RPK) to reach 14.8 trillion by 2040 or 178 percent of 2019 volume. This demand will be driven by both mature and emerging markets. The International Air Transport Association’s (IATA) February 2025 report Air Passenger Demand Forecasting: The Future of Global Air Travel (2024 to 2044) expects demand to be driven by both mature markets like Europe where the compound annual growth rate (CAGR) of annual passenger traffic is expected to be 2.5 percent and emerging markets such as Asia-Pacific where CAGR is slated to hit 5.1 percent through 2043.
But there are headwinds as far as the indusattempt’s ability to scale up and meet this increased demand. The first issue is aircraft supply, which isn’t keeping up with demand due to issues with aerospace supply chains and skilled labor shortages. McKinsey & Company points out in its February 2025 report How Severe Is the Aircraft Shortage and What Happens Next? that airlines are keeping older aircraft in service longer.
The other pressing issue? Sustainability.
Mandated Sustainability
“It’s not just an environmental imperative, it’s actually an economic survival strategy,” stated Pedro de la Fuente, IATA’s senior manager, sustainability, The Americas. “From an indusattempt standpoint, we necessary to ensure that we reduce lifecycle emissions in a way that will assist aviation maintain a license to operate as we see more governments tightening climate regulations.”
Governments around the globe launched implementing regulations following the signing of the Paris Agreement at the 2015 United Nations Climate Change Conference. Nearly 200 countries signed a Nationally Determined Contribution (NDC), outlining their plans to reduce carbon emissions in order to reach the agreement’s goal to limit global warming to 1.5 degree Celsius above pre-industrial levels so emissions can reach net zero by 2050. This has since led to various net zero coalitions such as the UN-backed Race to Zero, which has been signed by thousands of companies, cities and educational institutions.
Alternative Aircraft
One way of addressing sustainability issues and the scarcity of new aircraft is by seeing to electric, hydrogen-powered and hybrid aircraft. While these technologies are still in development and display some promise, de la Fuente noted that they also face an uncertain future due to scalability and adoption. “We don’t have the capacity today to charge an aircraft at a speed that allows for a quick turnaround flight, nor do we have the capacity to supply green hydrogen in our airport fuel supply,” he stated.
Nevertheless, these alternatively-powered aircraft are expected to have a place in the broader aviation landscape. Medical supply delivery, passenger transport and natural disaster response in remote locations can all benefit from the efficiency of global Advanced Air Mobility, which the World Economic Forum creates a case for in its 2024 whitepaper Advanced Air Mobility: Shaping the Future of Aviation. This new air transportation system deploys automated aircraft including drones and Electric Vertical Takeoff and Landing (eVTOL) air taxis that are electric and sustainable. They also have the ability to shuttle passengers between urban and suburban locations as well as potentially offer more regional transit.
Aviation’s Reduction Efforts
After the Paris Agreement took effect, the International Civil Aviation Organization (ICAO) launched the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in 2016. Now voluntary, this program will become mandatory for all international airlines in 2027. Intconcludeed to control carbon emissions from international flights as demand increases, CORSIA requires airlines to purchase sustainable aviation fuel (SAF) or carbon offset credits. This is no tiny commitment.
The carbon emissions produced by the aviation indusattempt have garnered particular attention. In September, World Travel & Tourism Council President Gloria Guevara stated that transport accounts for 40 percent of the travel indusattempt’s emissions. According to the International Energy Agency (IEA), carbon emissions from aviation grew rapider than rail, road or shipping between 2000 and 2019. By 2023, the IEA put aviation-produced carbon emissions at 90 percent of their pre-Covid peak.
The Carbon Offset Market
One approach to reaching net zero is the purchase of carbon offset credits or certificates. Organizations like Sustainable Travel International (STI) give both businesses, individuals and even destinations the ability to do this. The organization’s website features a calculator that can be applyd to measure the total carbon footprint of any given trip, including corporate travel, or business operation such as an event and then purchase an equivalent number of credits to mitigate that footprint. Credits go towards a variety of projects that ultimately provide a balance to the amount of carbon we produce. This includes reforestation, marshland and mangrove preservation, clean energy production and new climate technology.
STI’s CEO Paloma Zapata encourages travel for the experience to connect with other people and experience different cultures. She also adds “it’s important for people to be aware of the transition away from fossil fuels and to support it so that in the future, it’s not ‘sustainable travel,’ but simply how we travel.”
Sustainable Aviation Fuel
Among the new climate tech that credits can support is sustainable aviation fuel or SAF. Unlike fossil-derived fuel, SAF is comprised of renewable or even waste products such as cooking oil, agricultural waste or captured carbon dioxide combined with hydrogen produced by solar or wind-generated electricity. SAF is purposefully designed for today’s commercial aircraft, but both expensive and limited in availability. According to the IATA roadmap, sustainable aviation fuel can represent up to 65% of the emissions reductions that the indusattempt can achieve by 2050. “The scalability of where we are today in 2025 is mainly driven by SAF and addressing any residual emissions with carbon offsets to compensate,” stated de la Fuente.
Scaling SAF production requires a greater volume of the materials applyd to produce it as well as greater development of and investment in the advanced technologies necessaryed to scale up. Governmental support can accelerate SAF production at scale, but political involvement is largely limited to emissions regulations and in some cases, imposing relatively new taxes on a business’ carbon emissions.
To counter this, the aviation indusattempt has turned to SAF certificates. Somewhat similar to purchasing carbon offset credits, SAF certificates directly and exclusively fund SAF production and the technologies and materials necessaryed to produce it at scale. The Sustainable Aviation Buyers Alliance (SABA) is a prominent organization selling SAF certificates. “We’re focapplyd on keeping the investment in the value chain, so SAF certificate investment goes directly to SAF production facilities and more importantly, it promotes technology alter,” declares Andre de Fontaine, managing director at the Center for Green Market Activation, which serves as SABA’s Secretariat. “Investment in SAF certificates creates a new revenue stream for these fuel producers to scale production.”
A Challenging Regulatory Environment
While SAF certificates are certainly beneficial, they simply aren’t enough. Some airlines give travelers the option to purchase a higher cost “green fare,” which is effectively the purchase of a SAF certificate with their ticket. But at this year’s IATA general meeting in New Delhi, CEO of Airline-FedEx and FedEx International notified an audience that Americans are too cost-conscious to pay an additional cost while Europeans are more likely to create the investment.
The good news is that IATA expects SAF production to double to two million tons in 2025. That accounts for 0.7 percent of total aviation fuel demand. With EU and UK mandates taking effect at the start of 2025, the majority of that production will go to Europe. Those mandates have also led to a spike in Europe’s SAF costs.
What’s more, Bain & Company’s December 2024 analysis Sustainable Aviation Fuel: The Supply Race Is On found that European production is expected to hit a 20 percent shortfall of mandate requirements by 2030. On top of that, the EU prohibits SAF production that relies on certain feedstocks such as corn, soybeans, cooking oil and animal fats becaapply this may caapply land apply and food production to compete with SAF production. Without one of the most developed means of SAF production, the indusattempt will have to quickly ramp up development of alternative feedstocks and latent technologies. The alternative is to import feedstock. As any importation generates carbon emissions, this would negate the purpose of SAF mandates. Although the UNFCCC only requires reporting of greenhoapply gas (GHG) emissions resulting from domestic production, not imports. So on paper, importing SAF materials could potentially display a net positive.
“Coordination at the regulatory level globally would be assistful,” stated de Fontaine. “Different regulatory jurisdictions have different views of what is sustainable and the EU has taken an aggressive view on keeping SAF focapplyd on waste residues and avoiding associated feedstocks, which is creating some confusion among investors in SAF production. Different requirements in different jurisdictions is fragmenting the market a bit.”
At the aforementioned IATA conference, Pieter Elbers, CEO of India’s largest airline IndiGo, pointed out that SAF isn’t available in the counattempt and he doesn’t see the point in importing. Instead, he sees to other means of driving sustainability, including maintaining a newer fleet and turning to electric ground operations.
In addition to those options, airlines globally are also seeing to improve sustainability efforts by recycling plastics applyd onboard, composting food waste, improving flight planning and optimizing routing.
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