Global Aviation Market Growth Trends
Considerable growth in global aviation with a 6.5% increase in passengers in 2015 compared to 2014. The aviation market shows growth in all parts of the world, with emerging markets like India leading the way. Ticket sales are boosted by low oil prices and lower fares. The industry faces challenges in managing CO2 emissions due to the growth rate.
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Norwegian Ministry of Transport and Communications ICAO Market Based Measure for Int. Aviation Karl Koefoed N-ALM Helsinki 15-16 November 2016 Norwegian Ministry of Transport and Communications
Setting the scene the global aviation growth Considerable growth in global aviation + 6,5 % in passengers in 2015 compared to 2014 Highest growth rate since the financial crisis All parts of the world show growth Strongest growth in emerging markets (India + 20%) Growth relatively low in Africa, Europe, and North-America Ticket sales "fuelled" by low oil prices and lower fares Norwegian Ministry of Transport and Communications 15 March 2025 2
Air Transport Development World recession 7,000 7,000 7,000 7,000 200 200 200 200 SARS 9/11 terrorist attack 180 180 180 180 6,000 6,000 6,000 6,000 Revenue Passenger-Kilometres Revenue Passenger-Kilometres Revenue Passenger-Kilometres Revenue Passenger-Kilometres Asian crisis 160 160 160 160 Freight Tonne-Kilometres Freight Tonne-Kilometres 5,000 5,000 5,000 5,000 140 140 140 140 120 120 120 120 (billion) (billion) (billion) (billion) (billion) (billion) Gulf crisis 4,000 4,000 4,000 4,000 100 100 100 100 Iran-Iraq war 3,000 3,000 3,000 3,000 Oil crisis 80 80 80 80 60 60 60 60 2,000 2,000 2,000 2,000 +5.5% growth rate vs. 2012 40 40 40 40 5.8 trillion RPK 1,000 1,000 1,000 1,000 20 20 20 20 - - - - - - - - 1945 1945 1945 1945 1947 1947 1947 1947 1949 1949 1949 1949 1951 1951 1951 1951 1953 1953 1953 1953 1955 1955 1955 1955 1957 1957 1957 1957 1959 1959 1959 1959 1961 1961 1961 1961 1963 1963 1963 1963 1965 1965 1965 1965 1967 1967 1967 1967 1969 1969 1969 1969 1971 1971 1971 1971 1973 1973 1973 1973 1975 1975 1975 1975 1977 1977 1977 1977 1979 1979 1979 1979 1981 1981 1981 1981 1983 1983 1983 1983 1985 1985 1985 1985 1987 1987 1987 1987 1989 1989 1989 1989 1991 1991 1991 1991 1993 1993 1993 1993 1995 1995 1995 1995 1997 1997 1997 1997 1999 1999 1999 1999 2001 2001 2001 2001 2003 2003 2003 2003 2005 2005 2005 2005 2007 2007 2007 2007 2009 2009 2009 2009 2011 2011 2011 2011 2013 2013 2013 2013 Scheduled commercial traffic Total (international and domestic) services Source: ICAO Annual Reports of the Council (preliminary figures) Norwegian Ministry of Transport and Communications 3
Global aviation market: Increase in demand/traffic and falling fares Norwegian Ministry of Transport and Communications 15. mars 2025 4
Introduction global aviation and emissions Aviation accounts for about 2% of global CO2 emissions About 1,3 % if we only consider international aviation This figure may double by 2050 Cause: Growth rate and decarbonisation in other sectors Improvements technological/operational/alternative fuels Significant research and development projects Aviation particularly energy consuming activity More dependent on fossil fuels than many other sectors Norwegian Ministry of Transport and Communications 15 March 2025 5
Introduction ICAO and the MBM International aviation CO2 emissions ICAO since 1997 Aircraft moving assets = cross-border activity (cannot be attributed to a single State) ICAO taking measures "Basket of measures" A38 2013: A global MBM to be developed towards A39-2016 Global Market Based Measure foreseen as a "gap filler" until other measures take full effect to reach CBNG 2020 2015: Paris Agreement expression of strong political ambition 2015: Draft Resolution text for a MBM proposed by ICAO Norwegian Ministry of Transport and Communications 15 March 2025 6
Preparatory work leading up to the ICAO Assembly ICAO draft resolution text proposal subject to considerable difficult discusssions/negotiations/consultations in 2016 ICAO Council discussions ICAO "Global Aviation Dialogues" (GLADs) with stakeholders in the Regions An ICAO "High Level Group" consisting of selected states " ICAO High level meeting" and "ICAO friends of the president meeting" open to all states Bilateral/multilateral discussions outside of the ICAO context European Coordination "the ECAC Bratislava declaration" Norwegian Ministry of Transport and Communications 15 March 2025 7
CORSIA the ICAO market based measure Preference for non-MBM measures (gap filler) Goal is CBNG growth from 2020 Does not include domestic flights (international flights only) Airlines buy emission units and thereby offsett their emissions Emission units can be purchased from eligible mechanisms/projects/programmes (Ex: CDM Paris Agreement) Expected offsetting scenario 158 millions tonnes of Co2 to be offset in 2025 and 703 million tonnes of CO2 i 2040 (estimations by ICAO) Norwegian Ministry of Transport and Communications 15 March 2025 8
"Gap filler" Norwegian Ministry of Transport and Communications 15. mars 2025 9
CORSIA some important paragraphs Par. 2 Preference for non-MBM meaasures Par. 5 The goal of the MBM CBNG 2020 Par. 8 Special Circumstances Respective Capabilities (SCRC) Par. 9: Phased implementation who is in and when? Par. 10 Route-based approach all operators on same routes Par. 11 Calculation of growth in the system sectorial/individual Par. 15 Work on MRV, EUC, and Registries Par. 18 Regular review Par. 19 National/regional MBMs Norwegian Ministry of Transport and Communications 15 March 2025 10
A39 - First Assembly debate (Ex. Committee) First debate 29 sept - European strategy keep the text as is Very positive momentum in the first debate coming from all regions of the world supporting the text A solid majority in the room for the proposed text in the WP Small minority still wanting amendments (however also consisting of some bigger important States) Chair concluded the debate would consult with the minority to reach for a consensus acceptable to the solid majority A lot of negotiations in the backrooms following the first debate Norwegian Ministry of Transport and Communications 15 March 2025 11
A39 - Second Assembly debate (Ex Committee) Chair proposed new text version on 5 October Added a reference in the preamble to negotiations under the UNFCCC and in other international organizations Added compromise text reached by US and China on developed/developing States in Par. 9C Brazil wanted a stronger reference to consider emissions units generated under the UNFCCC and the Paris Agreement. Chair chose to consult again, but at the same time keep overwhelming majority for the new text Norwegian Ministry of Transport and Communications 15 March 2025 12
A39 Final adoption (Ex Committee and plenary) 6 October last day of the Assembly Modified text proposed Relations to the UNFCCC and the Paris Agreement The MBM was adopted as last point remaining on the Assembly agenda both in the Executive Committee and the plenary India and Russia made reservations Russia did not exclude eventual future participation Sweden supported on behalf of 44 EU/ECAC-states Egypt supported on behalf of 54 African States China and many others supported text Norwegian Ministry of Transport and Communications 15 March 2025 13
MBM More work to be done for ICAO and States ICAO Council and CAEP Development of SARPs /guidance Further development of MRV / EUC / and Registries Training and capacity building in the Member States National implementation of the MBM in the Member States EU: Discussions on the future of the EU ETS? EU: "EU ETS Stop the clock" comes to an end EU: COM to make proposal on ETS early in 2017 Norwegian Ministry of Transport and Communications 15 March 2025 14
ICAO MBM Conclusions An important first step and a skilfully drafted compromise First of its kind sector emissions agreement Would have preferred to see more ambition Review clause allows for increased ambition over time 66 States so far signed up for the voluntary phases ICAO standing up to challenge Responding to political pressure from the Paris agreement Difficult implementation remaining Norwegian Ministry of Transport and Communications 15 March 2025 15
