As global aviation confronts the urgent need to decarbonize, a new alliance between the International Civil Aviation Organization (ICAO) and the International Renewable Energy Agency (IRENA) promises to fast-track investments in sustainable aviation fuels (SAF) and other clean energy solutions. This Memorandum of Cooperation, signed at the G20 Energy Ministerial in Brazil, brings together two leading global entities to address one of the most pressing issues in aviation—securing the financing required for a sustainable, net-zero aviation future.
The Need for Sustainable Aviation Fuel: An Essential Pathway to Net-Zero
ICAO’s ambitious goal of achieving net-zero emissions in international aviation by 2050 is both a challenge and a critical objective. The global aviation industry is responsible for around 2-3% of global CO₂ emissions, a number that could rise if demand continues to grow without sustainable interventions. Sustainable Aviation Fuel (SAF) has emerged as one of the primary tools for reducing carbon emissions in aviation, given its potential to cut greenhouse gas emissions by up to 80% over its lifecycle compared to traditional jet fuel. However, SAF’s development and distribution come with challenges, most notably the high costs and complex logistics required to produce it at scale.
To support ICAO’s Long-Term Aspirational Goal (LTAG) of net-zero emissions, ICAO has projected an enormous financial need—approximately $3.2 trillion will be necessary for SAF production alone to meet these targets. SAF and other low-carbon aviation fuels (LCAF) could become the foundation of the aviation sector’s green transformation, yet substantial investment is needed to make these alternative fuels economically viable and widely available.
Financing the Green Transition: The Role of the ICAO Finvest Hub
As part of its comprehensive strategy to reduce emissions, ICAO launched the Finvest Hub at its CAAF/3 conference in Dubai. The Finvest Hub is designed to serve as a critical intermediary between project developers, states, private investors, and multilateral financial institutions. By fostering a platform that aligns the financing needs of sustainable aviation projects with potential investors, the Finvest Hub supports the aviation sector in overcoming the barriers to widespread SAF adoption.
The Finvest Hub facilitates more than just matchmaking; it actively encourages new and additional financial flows from a wide array of financial institutions, including development banks and private sector investors. It also plays a critical role in supporting developing countries and states with specific financing needs, helping ensure that the benefits of SAF and clean energy technologies are accessible globally. Through these targeted efforts, the Finvest Hub aims to secure consistent, scalable funding for SAF facilities and cleaner energy projects that will allow for a substantial reduction in aviation’s carbon footprint over time.
IRENA’s Involvement: Leveraging the ETAF Platform for Climate Finance
IRENA, with its dedicated focus on transitioning to renewable energy sources, brings critical financial mechanisms to this partnership, including its Energy Transition Accelerator Financing (ETAF) Platform. Backed by the United Arab Emirates and supported by the OPEC Fund, the ETAF platform has mobilized commitments amounting to $1.15 billion, offering a strong base of resources dedicated to accelerating the global energy transition. By integrating IRENA’s financial expertise and reach, this new ICAO-IRENA partnership is well-positioned to drive substantial investment toward SAF production and other clean aviation technologies.
IRENA’s Director-General, Francesco La Camera, highlighted the importance of “all hands on deck” to achieve a global energy transition, emphasizing that climate finance solutions will be pivotal in advancing this objective. With support from the ETAF platform, ICAO and IRENA aim to facilitate accessible funding pathways for clean aviation projects. In doing so, they are addressing one of the main roadblocks to widespread SAF adoption: the high upfront costs and the need for significant infrastructure investment.
Expanding the SAF Ecosystem: Infrastructure and Policy Progress
With more than 330 SAF production facilities globally and around 125 airports distributing SAF, the infrastructure supporting sustainable aviation is steadily growing. Over 50 billion liters of SAF have been committed through offtake agreements, and ICAO has recognized over 40 SAF feedstocks under its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). These developments, combined with the adoption of more than 40 national and regional SAF policies worldwide, demonstrate the rapid progress in creating a supportive ecosystem for sustainable aviation fuels.
In addition to SAF production, ICAO and IRENA are emphasizing the importance of developing infrastructure that can support a large-scale clean aviation fuel network. These efforts include building refueling stations, charging points, and logistics networks capable of handling both SAF and other emerging cleaner fuels. Such infrastructure will not only support increased SAF availability but also ensure that airlines can access cleaner energy solutions across more routes, reducing carbon emissions in both domestic and international flights.
Building Momentum at COP29: ICAO’s Commitment to Green Aviation Goals
The announcement of the ICAO-IRENA agreement coincides with the start of COP29 in Baku, Azerbaijan, where ICAO is playing an active role in various aviation-related events. During the conference, ICAO will engage with stakeholders to outline its progress in the clean energy transition for aviation and highlight its contributions to the UN Sustainable Development Goals (SDGs). ICAO’s sessions at COP29 will include discussions on its ACT-SAF program and CORSIA, both of which are fundamental to the organization’s strategy for achieving carbon-neutral growth in international aviation.
ICAO’s ACT-SAF program offers essential support for the SAF transition through initial feasibility studies, capacity-building, and training initiatives. This program complements the Finvest Hub’s investment-focused objectives, providing a well-rounded approach that not only addresses the financial aspects but also ensures that there is sufficient knowledge and capacity to implement SAF projects effectively. Through these initiatives, ICAO is creating a solid foundation for sustainable aviation, engaging with international stakeholders to build an aviation sector aligned with global climate goals.
A Collaborative Future: Global Support and Regional Efforts
ICAO’s efforts to promote SAF financing have garnered support from influential entities such as the World Bank, the International Monetary Fund, and regional development banks, with senior ICAO officials recently holding discussions with these organizations. Such alliances underline the global commitment to advancing the aviation industry’s green transition through collaborative financing efforts.
The U.S. Department of Transportation, for example, has voiced its support for ICAO’s clean aviation initiatives, highlighting the alignment of the United States’ own sustainability goals with ICAO’s long-term vision. By bringing in both public and private support, ICAO is reinforcing the need for cross-border cooperation to achieve a truly sustainable future for aviation.
The Path Forward: Sustaining Global Momentum for Clean Aviation
ICAO and IRENA’s partnership marks a pivotal moment in sustainable aviation, combining resources, expertise, and global influence to facilitate the financial backing needed for cleaner aviation. By drawing attention to the crucial role that SAF and low-carbon aviation fuels will play in the sector’s decarbonization, ICAO and IRENA are advocating for a comprehensive, inclusive approach to aviation sustainability.
The successful transition to net-zero aviation will require concerted efforts across several fronts, from infrastructure development and policy reform to capacity building and large-scale financial investments. ICAO’s comprehensive plan to tackle each of these fronts showcases the ambition necessary to address aviation’s environmental impact at a meaningful scale. In collaboration with IRENA, ICAO’s initiatives like the Finvest Hub and ACT-SAF set the stage for a future where sustainable aviation fuels and cleaner energy options are the industry standard, contributing to a resilient, sustainable, and low-carbon aviation sector.
Through this strategic collaboration, ICAO and IRENA demonstrate that sustainable aviation is more than a goal—it is an achievable reality, one that hinges on well-coordinated, innovative partnerships. With continued progress, the aviation sector is poised to emerge as a leading example of how targeted financing and international cooperation can drive meaningful environmental change, ultimately creating a cleaner, greener world.