Five noteworthy aviation sustainability developments in the past seven days curated by the Ishka SAVi team.
Here are the new developments to keep in mind:
1. Pegasus Guidelines launch with ‘open source’ structure to appeal to more banks – The long-awaited Pegasus Guidelines for aviation were launched on 4th April, offering an open-source methodology for banks to evaluate emissions intensity in their aviation lending portfolios. Inspired by the Poseidon Principles, these guidelines aim to facilitate climate alignment target-setting. A key difference with the Poseidon Principles is its shift from 'principles' to 'guidelines', eliminating the membership-based structure and making the Pegasus Guidelines an opt-in “open-source” methodology. Initial adoption includes the five founding members and two new banks. See Ishka SAVi report ‘Pegasus Guidelines adopt ‘open-source’ approach to attract new banks’ for more details. Besides upping the pressure on emissions reduction by airlines, the guidelines advocate for a “look-through” approach to lessor lending that evaluates aircraft based on the operating airline. On the topic of lessors and emissions intensity, CDB Aviation announced this week the execution of its second sustainability-linked transaction, a $506-million unsecured term loan with the same SPTs as its earlier sustainability-linked deal, including the emissions intensity of its fleet. Access the SAVi Sustainable Finance Tracker to see more details.
2. UK ‘does not rule out’ frequent flyer levy is other measures fail to make progress – The UK Parliament’s Environment Audit Committee (EAC), which scrutinises the sustainability and environmental considerations of government policies, has published its reaction (and subsequent government response) to the country’s Jet Zero Strategy – the UK’s chief aviation decarbonisation blueprint. According to the EAC, the Jet Zero Strategy which was first published in 2022, should be reviewed in 2025 (a revision brought forward from 2027) to “determine whether the sector remains on track.” In response, the UK government confirms that its model assumes that fuel efficiencies will improve by 2% each year, in line with evidence from the aviation sector. But it says it will keep these assumptions under review and consider whether further action is needed in the future to meet net-zero targets. For example, it does not rule out measures designed to reduce demand for flights, like a frequent flyer levy, if a future review suggests that new fuels and improved technology alone are not sufficiently reducing emissions. The government has also committed to legislate to include international aviation emissions in its sixth Carbon Budget “at the earliest opportunity, subject to Parliamentary scheduling”, but does not commit to doing so by a specific date. Ishka notes the UK is likely to hold a general election in the second half of 2024, which will likely result in a change of government.
3. First e-VTOL customer delivery marks a milestone in clean propulsion – Ishka SAVi’s coverage of clean propulsion generally centres on fixed-wing products, but a major milestone for the e-VTOL sector this week could not be ignored. Chinese e-VTOL developer AutoFlight this week made the world's first delivery of a civilian ton-class eVTOL aircraft, the Prosperity aircraft, to a customer in Japan. The five-seat Prosperity was handed over to an undisclosed Advanced Air Mobility (AAM) operator. The customer is currently planning a demonstration of e-VTOL flights at the 2025 Osaka World Expo, with broader AAM deployment plans across Japan. Tian Yu, founder and co-chairman of AutoFlight, highlighted strong market demand for their products, with over 200 orders received for the CarryAll cargo variant. Notable orders include 30 units for logistics giant ZTO Express.
4. Singapore shares more details on its SAF mandate – Singapore’s Transport Minister Chee Hong Tat provided a few more details on the country’s incoming SAF mandate policy while answering an MP’s questions in parliament on 3rd April. Hong Tat said that in developing SAF use targets beyond 2026, the government would take into account “the approaches of other air hubs,” calling the initial 1% to 5% targets a “first step.” “I think it is important to strike a balance between achieving a reduction in carbon emissions, on one hand, and also protecting the competitiveness of our air hub.” The minister said that Singapore would “take reference” from international standards for defining fuels that can be classed as SAF under the mandate, and mentioned ICAO CORSIA SAF definitions as one example.
5. Clouding contrail policy, ‘Chemtrails’ regulation passes in Tennessee – Scientists in recent years have seen no shortage of conspiracy theories belittling decades-long findings on human-induced climate change, but a less common occurrence is working to popularise climate science in an area where conspiracy theories have already been rife. Contrails, not “chemtrails,” is one of the climate facets of aviation where research is developing fastest, and yet one of the first jurisdictions in the world to enact emissions-related legislation on them may be doing so for the wrong reasons. The BBC reports that Tennessee lawmakers on 1st April passed a Republican-sponsored bill banning "intentional injection, release, or dispersion" of chemicals into the air. While the bill does not explicitly mention chemtrails, which conspiracy theorists believe are poisons spread by aircraft, it broadly prohibits "affecting temperature, weather, or the intensity of the sunlight". The bill passed along party lines on 1st April and if it is signed by Tennessee's governor, Republican Bill Lee, it will go into effect on 1st July.
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