Global Banks Create Group To Decarbonize Aviation Sector – Cryptovibes.com – Daily Cryptocurrency and FX News
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The leading lenders to the global aviation space, BNP Paribas, Societe Generale, Bank of America, Crédit Agricole CIB, Citi, and Standard Chartered, are currently working together to create a climate-aligned finance infrastructure to support decarbonization in the sector.
These banks have set up a working group to create a collective climate-aligned finance (CAF) framework. Their framework defines common goals for action for the aviation industry decarbonization.
The coalition states that the new framework will guarantee consistency and transparency in reporting and establishing a level playing field for measuring the progress achieved against climate targets. With the CAF infrastructure, financial institutions can assess the emissions of their aviation loan books and work closely with their clients to report all their emissions, fund lower-carbon solutions and support various investments in new technologies.
The aviation industry accounts for 2.5% of global CO2 emissions and air traffic is expected to increase rapidly by 2050. In the current business-as-usual scenario, aviation alone may use nearly 10% of the planet’s remaining global carbon budget by 2050. The sector has initiated several efforts in response to this scenario, including the International Air Transport Association’s (IATA) commitment to achieve net-zero emissions by 2050.
To support these goals, the aviation industry is looking to invest in some of the more efficient aircraft, support the development of new aviation technology and increase the speed of transition to sustainable aviation fuels (SAF).
The financial industry will play an integral role in funding the new technologies, projects, and firms involved in the net-zero transition.
The global head of asset finance group at Crédit Agricole CIB, José Abramovici, said:
“We intend to propose a robust and effective framework for the benefit of all stakeholders in aviation finance including banks, investors, airlines, and lessors. We firmly believe that decarbonization is key to ensure the long-term future of the aviation industry.”
The aviation CAF infrastructure will be mainly based on the experience that is gained from the Poseidon Principles for maritime shipping together with the soon-to-be-launched CAF agreement for steel. In that context, the Poseidon Principles were launched in 2019 and they came with 11 banking signatories. Currently, Poseidon counts at least 29 signatories that cover over 50% of the global ship finance.
Any bank that wants to join the aviation CAF network can submit an expression of interest.
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