Navigant Research Blog

Carbon-Saving Innovation in the Airline Industry

— July 7, 2015

Relative to the rapidly changing automotive industry, which pumps out new models every year, the airplane industry has evolved at a considerably slower pace. This is not surprising, given that around 1,000 aircraft are made by Airbus and Boeing, the leading manufacturers. Unlike cars, changes in design and function take longer to incorporate into planes. For some time, the airline industry has been under pressure to increase its fuel efficiency and lower its greenhouse gas (GHG) impact. While airplanes contribute to 2%–3% of global GHG emissions annually, some posit that the high altitude of those emissions has a greater impact on climate change.  This past month, the U.S. airline industry has been put on notice to reduce the amount of GHG from air travel.

Citing the right to regulate emissions as part of the Clean Air Act, the U.S. Environmental Protection Agency (EPA) reported that almost one-third of global aircraft emissions originated from U.S. aircraft. To address this, President Obama has charged the EPA to begin crafting rules similar to the draft Clean Power Plan (111(d)) that addresses power plants and utility energy use.  European carriers have been under similar pressure from the European Commission.

The Path toward Change

There are two fundamental ways that airplanes can reduce fuel use: they can use a lower GHG fuel source and they can make more efficient planes.

For airplanes, the lower GHG fuel source has been biofuel, either from biological sources or waste products. As discussed in Navigant Research’s Aviation and Marine Biofuels report, choosing biofuels also helps hedge against increases and variability in fuel costs. The volatility of aviation fuel cost over the last 5 years can be seen in the figure below.

Monthly Cost and Consumption: 2000-2015

carbon airlines

(Source: U.S. Department of Transportation)

It is interesting to note, however, how relatively flat U.S. and international fuel consumption has been over the past 15 years. The United Nations’ International Civil Aviation Organization (ICAO) projections have cited the rapid growth of European plane travel in forecasting that fuel demand for air travel could result in a 300% to 700% growth in emissions by 2050.

U.S.-based United Airlines just announced an unusual step in securing biofuels for its planes. In late June, it was announced that the company is investing $30 million in Fulcrum BioEnergy. Once production of the waste-to-jet fuel has matured, United will be able to purchase up to 90 million gallons of jet biofuel.  Fulcrum already has a deal with Cathay Pacific and has received funding from the U.S. Department of Defense with the aim of becoming another military jet fuel provider.  Yet, United is not putting all of its eggs in one basket; it already had a deal with AltAir Fuel, which began in 2009.

 

Green House Gas Emissions and HVAC

— June 9, 2015

The scientific consensus around climate change is that greenhouse gases (GHGs) emitted by human activities are creating a very serious problem. As a result, most major global regions have adopted targets for reduction of GHG emissions, notably carbon dioxide (CO2). The largest source of CO2 emissions comes from the burning of fossil fuels for generating electricity, powering vehicles, and providing heat. Heating, ventilation, and air conditioning (HVAC) equipment plays a large role in CO2 emissions, as it accounts for roughly 40% of total building energy consumption.

Thus, increasing the efficiency of HVAC equipment is a clear way to address GHG emissions. But, it’s not the only way HVAC equipment can help. Indeed, in a recent report, the World Resources Institute points out that non-energy and non-CO2 emissions account for 22% of all U.S. GHG emissions and are expected to rise. The report goes on to recommend the reduction of hydroflourocarbons (HFCs), which are used as refrigerants in HVAC equipment. However, when it comes to HVAC, what HFCs should be replaced by is not entirely clear.

Engineering Requirements

Within an HVAC system, refrigerant needs to be evaporated, condensed, and be compressed in such a way that the system can provide cool air. As a result, the band of temperature and pressure in which refrigerant changes phase between liquid and gas is narrow. Within a building, even the best HVAC systems may leak at some point in their lifetime. So, refrigerant needs to be non-toxic and non-flammable to keep building occupants safe. These requirements were met by chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs). However, the proliferation of these refrigerants introduced a new problem: ozone depletion. While HFCs have solved the problem of ozone depletion, they are a GHG that traps heat in the atmosphere, contributing to climate change. The next generation of refrigerant needs to solve all of these problems.

So far, finding one refrigerant that is functional, safe, and doesn’t have severe impacts on the environment has been difficult. Potential candidates that have a lower the global warming potential than HFCs include R-32, which is mildly flammable, and CO2, which doesn’t fully change phase. Both have been commercialized. R-32 has been available in Japan since 2012. CO2 is being used as a standalone refrigerant in Europe and has recently been deployed in the United States. While challenges still remain, the development of these refrigerants presents the promise of reduced GHG emissions.

 

National Carbon Tax Likely to Fail Again

— March 28, 2013

In his State of the Union address, President Barack Obama said he would take unilateral action to limit climate change.  He declared, “If Congress won’t act soon to protect future generations, I will.”  Obama’s new resolve raised hope that the United States will finally move forward to address climate change by regulating greenhouse gases (GHG).  So, what are the prospects for meaningful legislation?

So far, efforts in Congress have focused on a carbon tax, which some Democratic legislators describe as a win-win proposal that would reduce carbon emissions while generating significant additional revenue to reduce the federal budget deficit.   In February, Independent Bernie Sanders of Vermont and Democrat Barbara Boxer of California proposed a bill to tax carbon emissions and raise $1.2 trillion in revenue over 10 years, most of which would be returned to consumers.  And on March 12, four Democrats from the House and Senate – Representative Henry Waxman (D-CA), Senator Sheldon Whitehouse (D-RI), Representative Earl Blumenauer (D-OR), and Senator Brian Schatz (D-HI) – introduced a related draft bill to put a price on carbon emissions by charging the nation’s largest polluters a fee for each ton of GHG they emit.  The latter proposal attempts to minimize the compliance and administrative burden and costs by leveraging the resources of existing U.S. agencies, such as the Environmental Protection Agency (EPA) and the Treasury.  Predictably, a few days later 105 Republican members of Congress introduced a resolution opposing a carbon tax, citing increased energy prices and a negative impact on the U.S. economy.

Small Ball

Acknowledging that the passage of a carbon tax is unlikely, Obama apparently has given up on pushing for a comprehensive climate change policy and is pursuing smaller-scale projects that won’t require new sources of revenue.  For example, he is proposing to divert $2 billion over the next 10 years in oil and gas royalties to fund alternative fuel research as part of the administration’s Energy Security Trust.  Obama is also expected to set new guidelines for all federal agencies to follow as they consider the effects of major federal projects on air, water, and soil pollution.  These guidelines are currently being reviewed by the White House’s Council on Environmental Quality and may require agencies to consider the impacts of global warming – e.g., increases in GHG and the potential for flooding, drought, or other extreme weather – before approving major projects such as the development of new pipelines and highways.

While lawmakers wrangle about climate change, atmospheric carbon dioxide (CO2) continues to rise.  According to the National Oceanic and Atmospheric Association, global CO2 levels jumped in 2012, increasing to 395 parts per million – the second biggest increase since record keeping began in 1959.

 

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