Aviation is typically attributed with generating 2 per cent of global emissions. In 2024, commercial aviation of passengers and cargo accounted for 1.127 billion tonnes* of CO2 and non-CO2 harmful emissions when measured over the life cycle of the fuel burned. Aviation falls into the ‘hard to abate’ category, so while 2 per cent might seem modest in the overall context, it is anticipated that aviation’s relative slice of the global carbon pie will grow dramatically as other sectors accelerate their decarbonisation efforts.
Aircraft require high energy density fuels, and alternatives like batteries or hydrogen remain years away from large-scale viability. As 2025 closes out the question is whether progress is being made: can aviation break the link between increasing passenger capacity to service the world’s growing population, and a corresponding increase in the carbon impact that increased flight activity will create?
The challenge of comparison
Measuring progress isn’t straightforward. For example, how do you fairly compare a budget short-haul carrier with a full-service global airline? A starting point is a level playing field for the comparison, and PACE [Platform for Analysing Carbon Emissions] has seen the aviation finance industry debate this challenge for the past few years. In 2025 there were clear signs that the two key measurements are:
- Absolute emissions: The carbon footprint of the airline measured on a full lifecycle basis to account for the benefits of sustainable aviation fuel (SAF).
- Airline capacity: Measured in available tonne kilometres (ATK), this measurement tracks the total payload (passengers and cargo) that an airline can carry across its route network.
But these metrics alone don’t tell the full story. Airline operations expand or contract according to demand and fleet composition changes regularly. The real insight comes from tracking capacity and emissions trends together, aiming for a scenario where capacity grows faster than emissions, or even where emissions fall even as capacity rises.
RM Block
The Holy Grail: Positive decoupling
In aviation finance, decoupling means breaking the link between growth and environmental harm. Positive decoupling occurs when an airline increases capacity whilst reducing total emissions. Relative decoupling means emissions still rise, but at a slower rate than capacity.
How can airlines achieve this? The levers are limited, but powerful:
- Fleet renewal: Replacing older aircraft with new-generation models that deliver 15–25 per cent better fuel efficiency.
- Operational improvements: Optimising flight paths, reducing taxi times, and improving ground handling.
- SAF: Bio-based or synthetic fuels that can cut lifecycle emissions by up to 80 per cent.
Several airlines are already proving that decoupling is possible, including some of the largest international carriers in the world.
American Airlines, the world’s third largest carrier has increased capacity by 1.5 per cent in 2024 compared to 2019, while also reducing absolute emissions by 3 per cent. This was achieved through a combination of fleet simplification and continued investment in new generation aircraft.
Iberia, Spain’s flag carrier, cut emissions by nearly 10 per cent while growing capacity by 2.7 per cent, thanks to consolidating from 20 aircraft types to nine and boosting new-generation aircraft from 9 per cent of its fleet in 2019 to 40 per cent in 2024.
This success is not exclusive to full service national carriers. Low-cost airlines such as Jetstar in Australia, Transavia Airlines in Europe and JetBlue Airways in United States have all managed to grow capacity whilst also reducing emissions, demonstrating that meaningful change can be achieved even prior to SAF adoption becoming more widespread.
Why this matters for Ireland
Ireland is deeply connected to aviation. As a global hub for aircraft leasing the country has a vested interest in aviation’s sustainability journey. Irish lessors, who manage over half the world’s leased aircraft, are increasingly factoring emissions performance into financing decisions. For passengers, this means ticket prices may reflect the cost of greener fuels and carbon compliance. For the economy, it is an opportunity: Ireland can lead in financing the transition, shaping global standards, and supporting SAF production.
A heritage of innovation
Innovation has always been aviation’s co-pilot. In Qantas’s Project Sunrise, dubbed aviation’s final frontier, Qantas developed a meticulous operating model to extract every ounce of fuel efficiency and enable a non-stop flight between London and Sydney. This turned a journey that was measured in days a generation ago into a 22-hour flight. But engineering marvels alone will not solve the climate challenge.
A sustainable aviation industry in both economic and environmental terms requires collaboration across the value chain with airlines, manufacturers, fuel suppliers, airports, lessors, underwriters, and financiers working together.
The road ahead
Can aviation truly decouple growth from carbon? The early signs are promising, but the scale of change required is immense. SAF supply and adoption must accelerate, manufacturers must be able to produce and deliver next-generation aircraft order books, and operational efficiency must become second nature.
One critical enabler of aviation’s decarbonisation is SAF but its benefits risk being confined to a handful of airports where physical supply is available. Today, SAF distribution often requires costly and carbon-intensive shipment to multiple airports, undermining its environmental advantage. The technology already exists to virtualise SAF allocation securely through a book-and-claim system, allowing airlines to purchase SAF and claim its emissions benefit regardless of where it is physically uplifted. This approach mirrors renewable energy certificates in the power sector and would accelerate SAF adoption by removing logistical bottlenecks. For the industry to scale SAF impact, alignment on book-and-claim standards is essential. Without it, progress will remain fragmented and disproportionately concentrated in regions with SAF infrastructure.
For Ireland, the challenge is also an opportunity: to lead in green finance, shape global standards, and deliver technical innovation.
The world wants to stay connected. The question is whether we can do so without costing the earth. The answer lies in whether aviation can turn decoupling from a financial buzzword into an industry-wide reality.
For further information visit pace-esg.com.
*PACE data January 2024 to December 2025.
