Executive Summary

Aviation remains a cornerstone of our globalized economy, shrinking distances and accelerating the movement of people and goods, thereby enabling tourism and trade. But it is also one of the hardest sectors to align with global climate-neutrality goals by 2050. In 2023, aviation produced roughly 1 gigatonne of CO₂ – accounting for about 2.5% of all human-made CO₂ emissions, including land-use change. When accounting for non-CO₂ impacts such as contrails and nitrogen oxides, the sector’s share of global warming rises to approximately 6%, underscoring the magnitude of the challenge. 

Mitigating emissions requires a comprehensive set of measures spanning technology, fuels, operations and policy. A key pillar is the deployment of Sustainable Aviation Fuels (SAFs), which can lower CO₂ emissions by 60–90% and are compatible with existing fleets. Yet current deployment is far below what climate targets require: SAFs supplied only 0.3% of global jet-fuel demand in 2024, constrained by limited sustainable feedstocks, high production costs and slow infrastructure expansion. Scaling SAFs will require major investment in renewable electricity, diversified feedstocks and large-scale production facilities, supported by clear and stable policy mandates. However, scientific evidence also shows that SAFs alone cannot deliver full climate neutrality as non-CO₂ effects – contrails, NOₓ and water vapor – continue to drive warming. SAFs remain essential, but must be complemented by broader technological, operational and regulatory measures. Efficiency improvements, such as retiring older aircraft, adopting more aerodynamic and fuel-efficient models, reducing cabin weight and introducing electric taxiing, further cut fuel burn. In parallel, novel propulsion technologies – hydrogen, battery-electric and hybrid-electric aircraft – offer long-term transformative potential, though they require major advances in infrastructure and energy systems.  

Market-based mechanisms (carbon credits) can also help bridge the carbon gap. On one side, CORSIA allows airlines to offset a growing share of international emissions, with costs rising from negligible levels during the pilot phase (USD7–20/ton CO₂) to potentially USD100/ton by 2027, representing a financial burden of up to USD9.5bn (26% of the sector’s net profits) as participation expands and obligations tighten. On the other side, the EU ETS imposes stricter, Europe-focused obligations, requiring airlines to purchase allowances, with projected needs of 70mn allowances by 2030 at EUR80–150/ton, translating to EUR5.6–10bn in costs. While carbon credits remain less expensive than the adoption of SAF, their cumulative cost is expected to rise, influencing operating margins or ticket pricing. Overall, these market-based mechanisms act as transitional tools, enabling airlines to offset unavoidable emissions while incentivizing long-term investment in SAF and low-emission technologies, supporting both compliance and the sector’s sustainable growth. 

These efforts will require around USD5.1trn in investment by 2050. This is largely for renewable electricity (40%) to power synthetic fuels and future hydrogen or electric aircraft. Another 38% must support scaling SAF production, while CO₂ capture and electrolysers account for 16% and next-generation aircraft for the remaining 6%. Despite the magnitude, the transition is economically favorable. Without mitigation, the sector would face nearly USD8trn in cumulative carbon costs under rising carbon prices. A transition pathway lowers this to USD2.6trn, eliminating carbon-price exposure after 2045 and strengthening long-term competitiveness and regulatory resilience. 

Decarbonizing aviation also hinges on accelerating aircraft modernization and next-generation innovation. With global fleet retirement at just 1.7% in 2024 and the renewal rate at 3.7%, the average aircraft age has reached a record 15 years, while delivery backlogs hit 17,000 units, extending wait times from two to three years to nearly six. Retrofitting older jets – through cabin upgrades, avionics, engines and aerodynamic improvements like winglets (which have reduced CO₂ by over 100mn tons since 2000) – offers short-term efficiency gains, but meaningful decarbonization requires new aircraft. Current technology could cut fuel burn and emissions by ~20% by 2050, but only if manufacturers accelerate production, diversify suppliers, streamline certification and secure supportive government policies. Leading OEMs are investing heavily in R&D for SAF-compatible platforms, hybrid-electric and hydrogen propulsion and advanced aerodynamics. Yet, the CAPEX-to-revenue ratio remains low at 3–5% despite increases of +8% over the past decade and +67% since pandemic lows. To achieve step-change efficiency and align with net-zero targets, materially higher investments are essential to bring next-generation, energy-efficient aircraft into service at the scale and pace the industry – and the planet – require. 

Demand-side measures also matter. Air travel has expanded from 0.4bn passengers in 1970 to almost 5bn in 2025, and global demand is projected to reach 12.4bn by 2050. Europe will grow more moderately – from 1.19bn passengers in 2023 to 1.81bn in 2050 – but even this +52% rise challenges net-zero pathways. Over 50% of EU passengers fly domestically or within the EU-27, and short flights present the clearest mitigation opportunity: routes under 300 km account for 19% of national travel, while routes below 500 km account for 45%. Rail is well placed to substitute these distances, but requires major upgrades. Europe plans to expand high- and very-high-speed rail from 12,000 km today to nearly 49,400 km by 2050, demanding over EUR890bn in investment by 2050. Complementary measures, such as aviation ticket taxes reducing intra-EEA demand by around 9%, can further accelerate a fair and effective modal shift.