“Aviation is not similar to other industries where you can, quite frankly, get to net zero a little bit more easily. This one is going to take a little bit more time.” They are not the words of an airline chief executive nor an engineer designing next-generation aero engines, but of Cathal Foley, a senior executive at Pace, part of Kilorglin-based investment and finance firm Fexco.
Fexco has been a high flyer in the world of currency exchange, investments, and finance for more than 40 years. Now it is branching into aviation emissions. Pace stands for Platform for Analysing Carbon Emissions, and it is a potentially important tool in helping to lower aviation industry emissions.
That’s important from a specifically Irish perspective. “More than 50 per cent of all aircraft in the world are leased out of Ireland,” Foley says. “You add to that the fact that we are a small country on the western edge of Europe and these days we are dependent on air travel. I think Ireland is at the very centre of all that is happening in that aviation space, as we get towards our net-zero goals.”
Getting the carbon out of aviation is going to be far harder than doing the same job with road transport. The technology to decarbonise cars, vans, buses and trucks is mature and well understood. Batteries and hydrogen are hardly new tech so the gap between where we stand now and where we need to get to is basically one of roll-out logistics. Put enough financial, political and organisational muscle behind the issue and it’ll get done.
Putting zero-carbon (or at least carbon-neutral) planes in the air is far from being so simple. Mostly it’s down to weight. Weight is the enemy of an airplane, any aircraft. Every extra kilogram of weight carried on board — whether passengers, luggage or airframe — requires extra litres of fuel. It’s the infernal equation of the rocket engineer: weight needs more fuel which is itself more weight which needs more fuel ...
There have been some interesting developments in electric aviation of late — notably Rolls-Royce putting its single-seat Spirit Of Innovation aircraft into the air
Batteries dramatically complicate that equation, because a battery — no matter how efficient — is far less “energy dense” than an equivalent amount of liquid fuel. For comparison, a kilogram of petrol contains about 47.5-megajoules of potential energy and a kilogram of fuel is roughly equivalent to a litre of fuel.
Even given that jet turbofan engines are between 70-80 per cent efficient (in other words, they waste between 20 and 30 per cent of that energy as waste heat) that still means they’re squeezing between 33 and 38 megajoules out of each litre or kilogram of fuel. A battery can’t compete. The lithium-ion batteries available have, at best, 0.7 megajoules per kilogram.
While there have been some interesting developments in electric aviation of late — notably Rolls-Royce putting its single-seat Spirit Of Innovation aircraft into the air or the maiden test flight of Eviation’s nine-seater electric commuter aircraft, batteries and aeroplanes don’t mix too well, not least because if you unexpectedly run out of charge you can’t hang around and wait for the AA.
So airlines will have to turn to carbon-neutral e-fuels — fuels made by combining airborne carbon dioxide with “green” hydrogen to create a simple hydrocarbon fuel. The technology is relatively well understood but huge financial investment will be required alongside a massive scaling up of industrial capacity if enough e-fuel is to be made to fill the tanks of the world’s aircraft.
Even then, it might not be enough, Foley says.
“Previously, if an investment bank was being asked for emissions data for aircraft that it had invested in, the bank would have had to ring up every airline and ask for individual data on every aircraft,” says Foley. “That’s arduous, lengthy work and the data coming back might be accurate, or it might be inaccurate. You might have 60 different airlines and operators, so that’s a minimum 60 phone calls you have to make.
“Now, through Pace, an investor can see all of the data all of the flight cycles, the Scope 3 emissions data, the available seats per kilometre data. They can see which airline is performing well in an emissions sense and which ones are not.”
Pace draws its emissions data based on the International Civil Aviation Organisation’s formula for fuel burn on each individual flight. While that doesn’t automatically take into account unexpected items such as a go-around landing, or a headwind, Fexco reckons the data is accurate to within 2 per cent, and it may even be slightly better than that in the coming months as the software and data sets improve.
The Pace software also allows investors to extrapolate that data, and to see what works best when it comes to bringing down carbon dioxide levels. With a few clicks, you can see how big a change making improvements to the existing aircraft fleet might make, or buying in new, more efficient aircraft.
There’s a tab for e-fuel usage too but ultimately there’s a big gap in the graph, assuming that you’re entering realistic values for how much each scenario delivers in terms of emissions reductions. That gap is going to have to be fed, in the short to medium term, by carbon offsets which is a controversial area, at best.
It’s part of a growing trend, and something of a massive change in investor-investment relations, that the climate efficacy of an investment is seen as being as important as the hard cash return
The whole point of the Pace software is to help point investors towards solutions that minimise the need for offsetting. It’s part of a growing trend, and something of a massive change in investor-investment relations, that the climate efficacy of an investment is seen as being as important as the hard cash return, or close to it.
“There are two sides of the value chain that are creating pressure,” says Foley. “There are regulators at one end saying ‘you must do this’ but equally now, there are consumers and investors at the other end saying ‘I expect this of you’. We see a huge push from the consumer side. The expectation is for products that are greener in nature, and which are more sustainable in nature.
“So there is what we call a ‘green-ium’ effect, whereby investors are saying that companies can have money for less, for a lower return, if they can show that it’s going to be invested in a responsible way.”
It’s not just altruistic, of course. Pace, as well as showing investors what aircraft are putting out which emissions at any given time, can also give insights into the depreciation curve of each aircraft. That’s a critical calculation in any long-term investment into a depreciating asset, but one that is now fraught with extra climate-related difficulty.
Depending on legislation and the march of technology, an aircraft that is a perfectly reasonable investment with a predictable depreciation curve now might not be in the same financial ballpark in 10 years’ time. Any change in how aircraft are operated, designed and legislated for could trigger a sudden drop in the plane’s individual value. Software that nudges investors towards greener and greener investments could be as useful to the bottom line as it is to the planet as a whole.
