Irish-made tech called PACE will help aviation sector grow global GDP contribution to €1.67trn and achieve ambitious 2050 Net Zero goals.
Kerry fintech player Fexco has revealed a new green tech platform called PACE that will enable airlines, aircraft lessors, and financiers of the aviation sector to accurately measure and manage their carbon emissions to align with Net Zero targets.
The Platform for Analysing Carbon Emissions (PACE) provides the aviation industry with a platform to underpin sustainability linked finance within the broader sector that will add €1.67trn to global GDP.
“The aviation sector is striving to reach its emissions goals, but it is a significant global industry, generating the equivalent of over €947bn in GDP annually, which is larger than the GDPs of Ireland, Scotland, Wales, and Luxembourg combined, so it is a monumental challenge”
According to Fexco PACE will allow the aviation sector to model future changes in its fleets to drive towards improved carbon performance. This will allow the sector to access finance that has been ear-marked for sustainability-linked activities.
Chocks away on sustainability flight
New carbon governance frameworks will require banks, lessors, and investors to accurately track and manage their assets’ carbon emissions for regular reporting and decision-making purposes to demonstrate their progress in reaching their targets.
These frameworks range from the EU Emissions Trading Scheme (ETS), which is the world’s largest carbon market to the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), a global offsetting scheme, whereby airlines and other aircraft operators will offset any growth in CO2 emissions above 2020 levels. This means that aviation’s net CO2 emissions will be stabilised, while other emissions reduction measures, such as technology, sustainable aviation fuel, operations, and infrastructure options, are pursued.
“The aviation sector is striving to reach its emissions goals, but it is a significant global industry, generating the equivalent of over €947 billion in Gross Domestic Product (GDP) annually, which is larger than the GDPs of Ireland, Scotland, Wales, and Luxembourg combined, so it is a monumental challenge,” said Cathal Foley CEO, PACE.
“PACE is a significant first step for this sizeable sector to robustly monitor and forecast the emissions impact of any changes they make to their operations. PACE will enable organisations to make better decisions with a measurable wider environmental benefit while accessing sustainability linked finance to allow the sector to grow its contribution to global GDP to €1.67 trillion and achieve ambitious Net Zero goals.”
Aviation scales
In Ireland, there are over thirty aircraft leasing companies operating with a combined value of aviation assets under management exceeding €113bn.
More than 50% of the world’s aircraft are leased and managed through Ireland, with 4,000 of the world’s leased aircraft either managed, controlled, or owned by Irish based organisations.
PACE has already enjoyed significant traction across the spectrum of businesses in the target market ranging from lessors, banks, investors, and export credit agencies and is on track to secure 50% of customers within these target sectors by the end of 2024.
One customer is SMBC Aviation Capital, which is one of the world’s leading aircraft leasing companies, with an owned, managed and committed fleet of over 730 aircraft. The company focuses on the most technologically advanced, fuel efficient and narrowbody aircraft types, providing customers across the globe with the aircraft they need to successfully grow their businesses.
“PACE is a key tool to help us measure and predict our scope 3 emissions and to ultimately assist us to reach our net zero targets by 2050,” said Shane Matthews, Head of Strategic and Market Analysis at SMBC Aviation Capital.
“As new technologies come on stream and as the industry moves towards sustainable aviation fuels, PACE will test and confirm that we are on the right track and will help us to meet our responsibility to deliver an industry that is more sustainable.”
PACE is a joint venture between Fexco, and Avocet Risk Management and its methodology has been reviewed by KPMG. Starting in aviation, the future of PACE will see it broadening to capture further industries and empower businesses to make better environmental decisions
“PACE is a major milestone for Fexco both from an innovation and sustainability perspective,” said Karl Aherne, chief operating officer, Fexco.
“Fexco has over four decades of innovation where we have transformed every market we play in. PACE is a showcase for our expertise and the relationships we have across the aviation sector both in Ireland and abroad. This is a huge opportunity to transform an entire sector while helping them navigate climate targets and report on their ESG commitments in a transparent and robust way. We are really excited about what PACE can do for the aviation sector.”
