How aviation’s net zero transition can drive growth in emerging economies

The Chicago Convention was signed on 7 December 1944, setting the tone for how countries could use the connectivity provided by air travel as a catalyst for growth, development and prosperity across the world. For over 80 years, the aviation industry has held fast to this value. By connecting people in even the most remote regions, and stimulating investment, infrastructure development, innovation and education, the industry brings social and economic benefits to both developing and developed nations that far outstrip any investment.

The role of aviation in connecting the world is reflected in ATAG’s report Aviation: Benefits Beyond Borders. Around 4.4 billion passengers travelled by air in 2023 and we expect this number to grow to five billion this year. Almost 40 million commercial flights were scheduled last year and air navigation service providers (ANSPs), airports and airlines handled some 96 million aircraft movements in 2023.

Air transport generates significant economic value, contributing USD4.1 trillion, or 3.9%, to global GDP. Around 86.5 million jobs are supported by air transport worldwide, with aviation jobs themselves being, on average, three times more productive than other jobs. In fact, if aviation were a country, it would rank 20th in size by economic activity. Emerging economies in particular benefit increasingly from aviation; half of the top 20 countries for passenger traffic are now developing or emerging economies, with one in every 20 jobs in Africa, for example, supported by air transport. The boost in tourism and global trade supported by air travel brings economic prosperity and provides funding for infrastructure development and local business growth.

However, all of this comes at a cost. Airlines emitted more than 880 million tonnes of carbon dioxide in 2023, accounting for just over 2% of global human CO₂ emissions. This is why the whole civil aviation sector has committed to an energy transition with the goal of net zero carbon emissions by 2050, in line with the terms of the Paris Agreement.

First, taking a broader look at the current state of the air transport sector, we have largely recovered from the challenges of the COVID-19 pandemic. This recovery, only four years after the pandemic, is remarkable for an industry that was among the hardest hit, with global lockdowns leading to more than 2.3 million jobs lost across the sector by July 2020, a reduction of 21% compared to pre-pandemic levels.

Despite these heavy setbacks, the industry has now largely returned to, or outstripped, its pre-pandemic state: by February 2024, air travel had surpassed 2019 levels. Analysis now suggests a 3.9% annual increase in demand for air transport over the next 20 years, making it clear that aviation will continue to be a key factor in positive economic and social development across many regions. Regions with a larger share of developing countries will see the highest growth in international traffic over the next two decades – Africa, Asia-Pacific and the Middle East are all projected to grow by around 5% until 2043. It is not surprising that the greatest increase in the propensity to travel over the same period will be in developing and emerging economies, such as Bangladesh, China, Nepal and Thailand.

This growth, however, is contingent upon several significant factors. There must be continued growth in trade between nations, business investment must increase in support of long-term growth, flight freedoms should not be restricted through regulation, and technological progress needs to continue. All factors will require governments and key stakeholders to prioritise air travel development and investment in their longer-term planning. While there are some short-term challenges to this more open-border view of the world, the benefits of connectivity will remain favourable in the long term.

The industry’s journey to Net Zero is a delicate balancing act. Ultimately, a global issue needs to be addressed with global solutions that incorporate all players across all regions. The next 30 years will necessarily focus on reaching net zero carbon emissions. But we also need to ensure that developing nations are not falling behind in the process, particularly when it comes to their potential for connectivity, jobs and education, and the economic growth that comes from all three.

How do we go about this? The answer has been discussed widely across many industries for many years: we must decouple emissions from growth. Looking at Europe, one example of this in practice is EUROCONTROL’s Free Route Airspace initiative, which should save one billion nautical miles, and 20 million tonnes of CO2 once fully implemented across the continent. This is a huge step forward in decoupling growth in the number of flights from actual emissions. With the support of policymakers and governments, this could be a blueprint for thinking of new solutions in our skies all around the globe.

As laid out in our Waypoint 2050 analysis, the path to Net Zero requires a mix of technological innovation, improvements in operations and infrastructure, market-based measures and, above all, the scaleup of sustainable aviation fuels (SAF). SAF has the potential to reduce carbon emissions by up to 80% across its lifecycle compared to conventional jet fuel, and there is a projected demand of around 20 million tonnes of SAF by 2030. Depending on the scenario, about 450 million tonnes of SAF will be required by 2050 to realise the energy transition.

On the positive side, there is a growing momentum in the uptake of SAF: 98 airports have ongoing deliveries; 50 airlines – representing over 40% of global traffic – have voluntarily committed to the use of SAF and 45 countries have put SAF-specific policies in place.  Production doubled from 2024 to 2025 and, if this trend continues, we are in a good position to reach our short-term goal. The long-term replacement will be an even greater challenge.

Our estimation is that a capital expenditure of about $1.45 trillion is required over the coming 30 years. Much of it will be in developing nations where sustainable feedstock opportunities exist. Analysis shows that the transition could create or sustain up to 14 million jobs worldwide. Many of the crucial steps in the development of SAF are currently being taken by smaller grassroots players, such as Gevo, LanzaJet, Neste, SAF One, SkyNRG, and World Energy. Small players, with a fraction of the resources of the traditional names, are turning potential into reality, with many of their production sites operating in developing nations. If we support the ramp-up of SAF production in regions like Southeast Asia or Latin America, we will provide a basis for future economic growth in emerging economies.

To scale and meet demand, we will need political willpower, collaboration and support by the finance community, both from private and institutional investors, such as multilateral development banks. The approach should be one of mutual exchange and collective action. Best practices should be shared freely and proactively across nations.

Through the launch of its Finvest Hub, the International Civil Aviation Organization (ICAO) is already putting the right measures in place. ICAO is creating a platform that will facilitate dedicated pathways for funding SAF production facilities, clean energy infrastructure and other initiatives, by creating better access to private investment capacities, as well as funding from financial institutions, such as development banks. The Finvest Hub wants to support developing countries by providing technical assistance, supporting capacity building and giving guidance on policy frameworks.

In the future, more initiatives of this kind are going to be necessary. From the sharing of best practices to the creation of cross-country research and development projects and identifying financing solutions for the ramp-up of SAF, there is significant scope for collaboration. In doing so, the growth of the industry, which will provide a key lever for economic and social development in many developing nations, can offset its environmental impact. The energy transition can stimulate further job creation and economic growth, not just here at home, but across the world.

SAF is, of course, much more of an airline story. But its introduction is vital for the common future all across the aviation value chain. Meanwhile, early action is important in areas we can control today, and this is where ANSPs and operational improvements play such an important first role: bringing in efficiency improvements across the network today while we work on longer-term technology and energy fixes. In this sense, continued research and large-scale trials on contrail avoidance are also important drivers of climate action.

Given the ambition inherent within our desire to take to the skies and overcome odds as an industry, I am confident that we can overcome these challenges and reach our Net Zero target by 2050. The future of aviation is bright when we take lessons from all those who have shared our spirit in the past and follow the same vision by working towards a common goal.