Middle East Insights: Opportunities and challenges in decarbonization of Gulf countries' aviation industry

Editor's note: Middle East Insights is a special feature series by China Media Group (CMG) Middle East station, offering a comprehensive analysis of pivotal regional issues spanning politics, economics, culture and other pertinent fields within the region.

The aviation industry has long been one of the most challenging and slowest sectors to decarbonize. Statistics show that in 2022, the aviation industry accounted for more than 2 percent of global carbon dioxide emissions, with its growth rate consistently outpacing that of rail, road and maritime transport over the past few decades. While aviation significantly contributes to global economic growth and social development, it also presents considerable environmental challenges.

Meanwhile, the aviation sector has seen rapid development in the Gulf Arab countries in recent years. Among the widely recognized "Gulf Big Three," Emirates Airlines posted a record profit of $4.7 billion for the 2023-2024 fiscal year. Qatar Airways achieved a profit of $1.026 billion in the first half of the same fiscal year, marking a 113.8 percent increase compared to the same period last year. Etihad Airways' total revenue for 2023 also saw an 11 percent year-on-year increase. These impressive financial results are driven by the addition of new routes and a significant rise in passenger numbers.

On June 4, the 80th Annual General Meeting of the International Air Transport Association (IATA) concluded in Dubai, United Arab Emirates. At the 77th IATA Annual General Meeting held in Boston, U.S.‌, in 2021, the industry first committed to achieving net-zero carbon emissions by 2050. Three years later, the question of how to fulfill this commitment remains one of the most critical agenda items at IATA meetings. During this year's event, China Media Group (CMG) correspondents conducted in-depth interviews with dozens of industry experts, who highlighted the proactive efforts and substantial challenges faced by Gulf Arab countries such as the UAE, Qatar and Saudi Arabia in their pursuit of aviation decarbonization.

When discussing aviation carbon emissions, most people think of jet fuel combustion, and rightly so. According to data released by IATA, fuel combustion accounts for approximately 80 percent of total aviation carbon emissions. Currently, sustainable aviation fuel (SAF), produced from waste and residues generated by the circular economy (such as animal fats and used cooking oil), is regarded as a critical solution for reducing aviation carbon emissions.

IATA took a significant step toward sustainable aviation fuel at this year's annual meeting. On June 2, IATA announced a crucial initiative to promote the use of SAF. IATA will establish a registry to authoritatively account for and report emissions reductions achieved through SAF usage. This registry aims to accelerate the adoption of SAF and contribute significantly to the goal of achieving net-zero carbon emissions in aviation by 2050.

In recent years, Gulf countries have increasingly emphasized the development of their aviation sectors. For instance, in the UAE, the aviation industry contributes over 13 percent to the national GDP and accounted for more than 27 percent of Dubai's GDP in 2023. To advance decarbonization in aviation, the UAE government unveiled a "Sustainable Aviation Fuel (SAF) Master Policy" in December 2023. This policy sets an ambitious target of producing 700 million liters of SAF annually, aiming to position the UAE as a regional hub for low-carbon aviation fuel. By 2031, the goal is for at least 1 percent of the fuel used by UAE airlines to be sustainable.

Emirates Airlines is at the forefront of this initiative. In November 2023, the airline completed the world's first test flight of an Airbus A380 powered entirely by SAF. Adnan Kazim, chief commercial officer of Emirates, shared with reporters that flights from Dubai to major international hubs such as London Heathrow, Amsterdam Schiphol and Singapore Changi now partially use a blend of kerosene and SAF to reduce greenhouse gas emissions.

Compared to the UAE and Qatar, Saudi Arabia's entry into the international aviation sector has been relatively recent but marked by significant ambition. In March 2023, Saudi Arabia announced the establishment of a new national airline, Riyadh Air, which plans to commence operations in 2025. By 2030, Riyadh Air aims to serve over 100 destinations worldwide, positioning itself as one of the most forward-thinking airlines globally and driving the kingdom's non-oil economic growth.

From its inception, Riyadh Air has prioritized environmental considerations. In March 2024, Riyadh Air joined the United Nations Global Compact, the world's largest corporate sustainability initiative, which includes over 24,000 businesses and stakeholders from nearly 170 countries. Riyad Air Chief Operating Officer Peter Bellew highlighted in an interview at the IATA Annual General Meeting that the new airline integrates sustainability and safety as primary objectives in its system design. By embedding sustainability throughout its operations, particularly in optimizing flight paths, Riyadh Air can save 1.5 percent to 2 percent of fuel compared to airlines without systematic sustainability measures, thereby reducing carbon emissions.

New energy sources face significant challenges in supporting long-haul aviation, making the development of SAF crucial for reducing costs and increasing production. This issue is not confined to Saudi Arabia; the entire Gulf region, with its substantial funding and relatively lenient regulatory environment, has become a significant market for innovative aircraft propulsion.

Industry experts have analyzed the future of electric and hydrogen-powered aircraft, particularly in the UAE and Saudi Arabia, revealing that their use is currently limited to urban transportation and short-haul routes. Although the development of hydrogen-powered flights has been underway for some time, its commercial application remains distant. According to UAE aviation expert Khalid Sultan, hydrogen-powered aircraft require fundamentally new designs and significant airport infrastructure overhauls. Given that many wide-body aircraft delivered to Gulf airlines will still be in operation around 2050, Sultan believes "hydrogen-powered planes are unlikely to become widespread in these countries."

In contrast, SAF appears to be the only viable option for accelerating decarbonization in the Gulf's aviation industry, despite its challenges. Currently, SAF costs approximately two to four times more than conventional aviation fuel. IATA predicts that SAF production will triple in 2024 to 1.5 million tonnes, yet this will only account for 6 percent of all sustainable fuel production and a negligible 0.53 percent of the year's aviation fuel demand.

Despite the current challenges, Gulf countries remain optimistic about the future of SAF. Emirates Chief Commercial Officer Adnan Kazim expressed confidence in an interview with a CMG correspondent, stating that as supply increases, the price of SAF will inevitably decrease. This optimism reflects the strong commitment to decarbonizing the aviation sector and ensuring sustainable economic development by Gulf nations. The transition to SAF is seen as a critical pathway for the future of the aviation industry and an essential component of the region's broader energy transition strategy.

Credits:

Supervisor: Mu Li

Producer: Li Chao

Reporter: Zhang Zhuoya