Recurring sanctions, stricter climate targets and new technologies make aviation a complicated business.
By retrieving data from aircraft transponders, a new platform from Irish finance company Fexco can offer lessors, insurers and investors more certainty about their fleet.
Incidentally, it’s the same technology that allowed 20-year-old Jack Sweeney to find the location of billionaire Elon Musk’s private jet before posting it to Twitter.
“Showing the way to net zero is obviously a big challenge for companies, and data inconsistency is a huge problem,” said Cathal Foley, managing director of Fexco’s carbon emissions analysis platform (Pace).
“This is a huge problem that we all face in a huge market with almost a trillion dollars worth of assets flying around – many of which are leased or operated from Ireland.”
Pace, a joint venture between Fexco and aviation insurance consultancy Avocet Risk Management, provides data on CO2 emissions per flight from airlines and aircraft.
It models the impact of any changes airlines or manufacturers make to reduce their carbon footprint.
The platform has already signed Dublin-based SMBC Aviation Capital, one of the world’s largest aircraft leasing companies with a fleet of over 730 aircraft.
There are over 30 aircraft leasing companies operating in Ireland, representing more than half of the world’s aircraft.
Mr Foley says Pace is on track to attract 50 percent from lessors, banks, investors and export credit agencies by the end of 2024, giving the sector access to an estimated €1.67 trillion in sustainability-linked finance.
Shane Matthews, Head of Strategic and Market Analysis at SMBC Aviation Capital, said Pace will “test and confirm that we are on the right track and help us live up to our responsibility to create an industry that is more sustainable.” .
EU aviation emissions account for 13.9 percent of total transport emissions and 3.8 percent of total CO2 emissions. The EU aims to reduce transport emissions by 90 percent by 2050. Ireland’s carbon budget rules aim to cut transport emissions by 50 per cent by 2030 compared to 2018 levels.
Aviation also faces the end of free allowances in 2026 under the bloc’s emissions trading scheme, while a draft energy tax directive includes a proposed kerosene tax of 40 cents per liter.
A voluntary initiative to offset carbon emissions – the Carbon Offsetting and Reduction Scheme – will be mandatory from 2027.
“There is pressure from the legislature,” says Mr Foley. “Consumers come from a different angle and say, ‘We demand more transparency about the products we consume.’
“So in the middle, companies can feel pressured, wanting to do the right thing and not knowing how to do the right thing.”
Pace offers its users access to a dashboard with information on aircraft emissions and other data. It is information that many people currently have to collect manually.
“They don’t know where to get that number now. They make a series of phone calls to get the information and pass it on to a regulator,” he adds.
“They should have called a whole bunch of people and said, ‘How did you fly on the plane last year?’, ‘How many miles did you travel?’. And they would have had to do a whole lot of calculations – traditionally very spreadsheet based, very manual.
“You would have to contact different aircraft types or different operators and get all the information to get that CO2 number.”
The pace dashboard can also alert users when an aircraft has entered a restricted area.
“One of our partners ran spot checks on sanctions once a month due to resource constraints. They would register a junior on a platform and check where everyone is located. Pace will ping you live. Nobody has to see it.”
Mr Foley says Pace is on track to double customer numbers over the next year and help improve Fexco’s green credentials. Fexco, which specializes in forex (forex) and payments and is headquartered in Kerry, returned to profitability last year after suffering significant losses from the pandemic.
“We have engaged Pace to become the premier sustainability technology platform within the group,” says Mr. Foley.
“Pace is the first step. It’s a significant step, but it’s not the last step on this journey. There are more opportunities for us to create meaningful value for Fexco, our customers, our shareholders and for the businesses in which we operate.”
https://www.independent.ie/business/irish/the-irish-firm-helping-airlines-pick-up-the-pace-in-race-to-meet-climate-targets-42228754.html The Irish company is helping airlines to speed up the race to meet climate targets