Brazilian plane maker Embraer expects a gradual improvement in supply chain issues this year. Reuters
Brazilian plane maker Embraer expects a gradual improvement in supply chain issues this year. Reuters
Brazilian plane maker Embraer expects a gradual improvement in supply chain issues this year. Reuters
Brazilian plane maker Embraer expects a gradual improvement in supply chain issues this year. Reuters

Aviation industry needs more investment to reach 2050 net-zero goal


Deena Kamel
  • English
  • Arabic

The aviation industry's aim of achieving net-zero emissions by 2050 remains “doable” but more investment is needed to ramp up sustainable aviation fuels and hydrogen to power new aircraft designs in the future.

The industry must explore all solutions, including the use of clean fuels on existing aircraft and developing new aircraft technologies such as electric, hydrogen-powered and hybrid designs. Capitalising on fuel-efficient new models currently in the market must also be examined, Arjan Meijer, chief executive of Embraer’s commercial aircraft unit has said.

“I think it's not doable with each of the solutions by itself, so we're gonna have to bet on all the horses to get there,” he told The National at the annual meeting of the International Air Transport Association on Sunday.

“The aviation industry cannot do this by itself, we need the help of producers to get enough SAF and hydrogen … we believe the target is possible but we're going to need a lot of help on the production side and a lot of investments in SAF and hydrogen.”

Mr Meijer was speaking during the Iata gathering of top aviation executives in Istanbul, where they are expected to discuss how industry stakeholders can turn climate goals into concrete actions.

The meeting comes against increasing pressure on the aviation industry to reduce its carbon footprint amid a faster-than-expected recovery in the sector following the Covid pandemic.

Executives at the summit will detail how they aim to meet the target of net-zero emissions by 2050.

SAF, which is made from resources such as agricultural waste, green hydrogen and cooking oil, is widely considered to be the most significant contributor to helping the sector reach its net-zero aim.

However, supply is limited and prices are two to five times higher than jet fuel.

“Hydrogen is going to be a small contribution purely because the technology needs to be developed and more green hydrogen needs to be developed,” Mr Meijer said.

“Electric technologies will be contributing, but it will be very minimal because it's only going to be applicable to very small aircraft and very short range”.

The use of SAF and operating fuel-efficient aircraft models will contribute a “significant chunk” of achieving climate goals in the short to medium term, he said.

“Technology-wise we will get there … the big challenge is how can we get to affordable fuels for the industry and get across the hurdle of embracing a fuel that in the early days will be expensive,” he said.

“That's where government help is needed to incentivise production, that would incentivise airlines to use SAF and make sure that we have a level playing field for all airlines.”

Aviation industry leaders “collectively need to get our head around” an action plan for more sustainable operations.

“There's no unclarity about the challenge, it's really how do we get there collectively … we're taking our responsibility in developing and investing but it's going to be a puzzle that we need to solve together,” the executive said.

Arjan Meijer, chief executive of Embraer’s commercial aircraft unit, said that while aviation supply chain issues are improving, they will remain a challenge 'in the years ahead'. Photo: Embraer
Arjan Meijer, chief executive of Embraer’s commercial aircraft unit, said that while aviation supply chain issues are improving, they will remain a challenge 'in the years ahead'. Photo: Embraer

New turboprop plans 'currently on hold'

Embraer had initially said that its proposed passenger turboprop programme, which will be capable of running entirely on SAF, was planned for launch in mid-2023 amid talks to select an engine maker.

However, the company could not find an engine that matched its needs in terms of factors including fuel burn, operating costs and reliability.

“The system selection had some challenges, especially on the engine side. We've struggled to find the engine with the right credentials to put on the aircraft.

“We had two options offered to us and we took a very serious look, but in the end, we need to get into a design space where the aircraft is going to sell,” Mr Meijer said.

Embraer will now “take a step back”, look at newer technologies and review how the planned turboprop will fit into its platform Energia, which explores a range of sustainable concepts to carry up to 50 passengers.

The new turboprop programme is “currently on hold” with talks with engine makers continuing.

Their planned entry into service, initially set for 2028, will now be pushed back into “the early 2030s”.

Complementing China's Comac

Asked about the entry of China's plane maker Commercial Aviation Corp of China into the market, following the maiden commercial flight of its domestically produced C919 narrowbody jet, Mr Meijer said Embraer's regional aircraft can complement the new company's offerings.

Embraer's E2 family of E190 and E195 aircraft “nicely fits” between Comac's ARJ-21 regional jet and the C919 single-aisle aircraft, he said.

The E195-E2 can help Chinese airlines develop secondary and tertiary routes within the country, while the E190-E2 has “extremely good performance” in the high Tibetan plateau.

The E190-E2 and E195-E2 offer seating of up to 114 and 146 passengers, respectively.

“Especially with China developing its own products, Embraer could be a great addition to fill the portfolio in China,” he said.

Currently, 85 E-jets are flying with Tianjin Airlines, Hebei Airlines, Beibu Gulf Airlines and Colorful Guizhou Airlines in China.

The Embraer E190-E2 was certified by the Civil Aviation Administration of China in November 2022.

Supply chain woes

Regarding supply chain problems facing the aviation industry, Mr Meijer said that Embraer is “coping well” and expects a gradual improvement throughout this year.

“That doesn't mean problems will disappear entirely, there are still pockets of challenges in terms of critical manpower and materials, so that's what needs to solve itself … I think we will continue to see some challenges in the years ahead.”

Embraer expects to deliver 65 to 70 units by its commercial aircraft unit this year and “that's taking into account the [supply chain] challenges we have today,” he said.

That compares with 57 commercial aircraft delivered last year.

Aircraft manufacturers have struggled to increase production at a time when airlines are clamouring for new jets to meet the surge in travel demand.

Shortages in materials, plane parts and labour have restricted their output.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Stormy seas

Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.

We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice. 

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Madrid Open schedule

Men's semi-finals

Novak Djokovic (1) v Dominic Thiem (5) from 6pm

Stefanos Tsitsipas (8) v Rafael Nadal (2) from 11pm

Women's final

Simona Halep (3) v Kiki Bertens (7) from 8.30pm

MATCH INFO

What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany

Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)

Results:

5pm: Conditions (PA) Dh80,000 1,400m | Winner: AF Tahoonah, Richard Mullen (jockey), Ernst Oertel (trainer)

5.30pm: Handicap (TB) Dh90,000 1,400m | Winner: Ajwad, Gerald Avranche, Rashed Bouresly

6pm: Maiden (PA) Dh80,000 1,600m | Winner: RB Lam Tara, Fabrice Veron, Eric Lemartinel

6.30pm: Handicap (PA) Dh80,000 1,600m | Winner: Duc De Faust, Szczepan Mazur, Younis Al Kalbani

7pm: Wathba Stallions Cup (PA) Dh70,000 2,200m | Winner: Shareef KB, Fabrice Veron, Ernst Oertel

7.30pm: Handicap (PA) Dh90,000 1,500m | Winner: Bainoona, Pat Cosgrave, Eric Lemartinel

Updated: June 04, 2023, 1:22 PM