As sustainable aviation gears up to fly again, what are the prospects for Saudi-China ties?

The global aviation market is gearing up to fly again. Technavio – a UK-based market research company — expects an increase of $44.77 billion in the global aviation fuel market between 2021 and 2026. It also anticipates a compound annual growth rate (CAGR) of 4.29 per cent credited to favourable government policies. Aviation biofuels are noted by the company as one of the most important products in the market which indicate the demand for renewable sources of energy in the aviation industry. This political intervention in the industry has been apparent and necessary for two reasons: post-pandemic economic rehabilitation of the aviation sector, and environmental concerns.

The Covid-19 pandemic induced a global economic recession, caused a grave reduction in air travel due to coronavirus restrictions and saw the loss of passenger trust. The International Civil Aviation Council noted a loss of 60 per cent of traffic from 4.5 (2019) to 2.7 (2020) billion passengers. The high-risk aviation sector already faces financing challenges and China’s zero-Covid restrictions weakened the demand for fuel, slowing down the economy even further. However, the Director General of the International Air Transport Association, Willie Walsh, seems optimistic about a rebound of air transport despite the war in Ukraine and restrictions in China.

As the air transport industry rebounds, it must accommodate the concerns of those lamenting the carbon emissions stemming from the sector. Research and development in green technology is yet to find solutions beyond low-carbon sustainable aviation fuels (SAFs) that the sector currently relies upon. In order to make effective decarbonisation possible, these solutions in green energy must be sustainable, available and open to transition. Clean tech entrepreneurs such as Val Miftakhov and others identify zero-emission electric and hydrogen-powered aircraft as one of the popular areas of research for engine fuel. Transporting and storing hydrogen for fuel use without compromising the cost per available seat mile is a challenge yet to be overcome. Bobby Sethi, an Associate Professor at Cranfield University in Britain, makes a case for burning hydrogen cleanly such that the hydrogen combustion technology would produce 90 per cent less of the chemical responsible for smog than kerosene. However, even as this green technology develops further, transitioning to wider use depends on bringing the costs down. Much like most renewable technology, capital outlay is greater but low operating expense drops the cost of output. The cost can further be reduced by increasing production, making green technologies widely available and thereby facilitating transition.

Beyond fuel purposes, other forms of renewable energy that can power airport infrastructure, and the aviation ecosystem at large, should not be overlooked. An energy audit can help identify what aspects of an airport should be transferred to green technology, but terminal lighting, air conditioning, auxiliary power units and runway lighting, etc., generally consume energy that may be powered by renewable and sustainable sources.

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Demand for clean energy is already increasing with environmental watchdogs compelling governments and private companies alike to cater for sustainability concerns, the former carrying relatively more responsibility as primary actors in global politics. The World Economic Forum’s project Clean Skies for Tomorrow Coalition recommends such an international effort to shift towards sustainable aviation. While it was once thought to be too expensive, renewable energy costs have declined over the years as a result of government subsidies, increasing concern for human caused greenhouse gas emissions and global warming. Solar energy is a case in point; it started out at $378 on average to generate a megawatt hour of electricity in 2010 but eventually dropped to $68 in 2019.

Sustainability is not just a concern of the West. The General Authority on Civil Aviation of the Kingdom of Saudi Arabia hosted the first Future Aviation Forum from 9 to 11 May and looked at addressing these pandemic-induced economic setbacks and the impact of human-induced global warming in the aviation sector. The event in Riyadh brought together governments, private companies and key players in the aviation industry in an effort to rebuild the industry both better and cleaner; to promote international cooperation; to parry the threat of future losses to the aviation ecosystem; and to bolster the Kingdom’s economy under the Crown Prince’s Vision 2030. The Kingdom has identified “air business” and “sustainability” as strategic content pillars. Liberalisation of market access can remedy the economic slowdown. Accordingly, Saudi Arabia is set to privatise 25 of its companies aiming to increase passengers from 100 million to 300 million, a daunting but crucial challenge.

A comparison of the Kingdom’s plans for the aviation sector and China’s relevance as not only the largest aviation market, but also as the global leader in renewable energy technology, reveals potential for a blossoming energy-economic partnership. The largest producer of oil, and the largest importer of oil already share strong economic ties, but the Kingdom appears to be aware of the mortality of oil politics in the long-run as the resources run out, and as transition to renewable energy becomes incumbent, Saudi Arabia must ensure that its relevance does not dissipate. In the civil air transport sector, a bilateral agreement is already in place realising the potential, and with the launch of the Future Aviation Forum by Riyadh, it seems that the potential will materialise further, aided by China’s Civil Aviation Administration. What Saudi Arabia aspires to achieve, China already has, and it continues to prosper. This gives China room to capitalise on the momentum as it builds.

Initially, the equation will not be green in essence, despite claims of environmental concerns, because of economic interests. The Kingdom will continue to rely heavily upon oil to maximise its gains under Vision 2030 and China will increase its carbon emissions until 2030, before turning to net-zero by 2060. In both cases, the claim is that it will get worse before it gets better. And given their record, environmental-friendly businesses must have the capacity to boom worldwide for Saudi Arabia and China to care about the environment.

China will increase in capability and capacity as a global supplier for clean technology much like its present leadership in solar energy. Apart from research and development, and technology, China’s importance as an aviation market is impossible to ignore and so is China’s pursuit of becoming energy secure and gaining a manufacturing monopoly in renewable energy. Thus, as all key players in the aviation ecosystem attempt to rebuild and transition sustainably, China’s contribution to meeting that target will be indispensable, be it for the post-Covid rebound of air transport or eventual green transition, and be it with Saudi Arabia or all global aviation operators at large. If the new buzzword is “sustainability” and the test is to research and develop renewable energy, then China is likely to pass with flying colours.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.