November 22 is the last day of COP29 – the conference that manages the Paris Agreement within the United Nations – which is being held this year in Baku, Azerbaijan. Meteorologists have already found that 2024 will be the hottest year ever observed. This should lead to a redoubled effort at the global level to accelerate the energy transition. Despite this, the vast majority of the 196 countries that signed the Paris Agreement continue to subsidize oil production and consumption.
The election of Donald Trump, the fact that he intends to maximize oil production in the United States, as well as his skepticism regarding climate change, suggest that the production of renewable energies will suffer and will no longer benefit from government support. US federal government. This is a very big problem for airlines, because the sustainable aviation fuels they depend on to decarbonize the sector are overwhelmingly produced in the United States. No other country has done so much to boost the production of sustainable aviation fuels.
Solving the energy transition challenge for aviation will also go a long way towards resolving this challenge for the wider economy. Indeed, to meet the need for sustainable aviation fuels (or biofuels), it will be necessary to build biorefineries which will produce several products, including sustainable aviation fuels. But kerosene only represents on average around 8% of the production of refineries in the world, the needs of airlines being largely relegated to second place, after those of road transport and domestic heating.
The IMF calculates that in 2022, $7 trillion will have been paid by governments around the world in subsidies for oil production and consumption
Marie Owens Thomsen
Investment needs to build the biorefineries necessary to meet air transport demand could be between 4,000 and 8,000 billion dollars over the entire period between now and 2050. Given the low share of air transport fuels, aviation in refinery production, up to 90% of these investments will benefit other industries. Where will the necessary funds come from? Let us look no further than subsidies currently benefiting the oil sector.
The International Monetary Fund (IMF) calculates that in 2022, $7 trillion will have been paid by governments around the world in subsidies for oil production and consumption. This annual sum is divided into 6,000 billion dollars allocated to consumption and 1,000 billion dollars directly to oil companies. With the equivalent of a single year of subsidies, it would be possible to cover almost all the investment needs to produce the quantity of renewable energy, including that of sustainable aviation fuels needed for the next 26 years. Subsidies for oil companies in a single year represent 14% of investment needs by 2050. In seven years, these annual sums could cover the cost of the energy transition in aviation.
After 29 annual COPs, the time has indeed come for governments to align their words and actions. It is no longer possible to ignore this monumental inconsistency. Oil subsidies are an aberration that must be ended now.
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