Weak Aircraft Innovation Undercutting Aviation’s Green Transition

Last Updated on: 13th June 2025, 02:12 am

As the aviation industry prepares for the Paris Air Show, where manufacturers will showcase their latest fossil-fuel-powered aircraft, new T&E analysis suggests that reliance on conventional technology is putting the sector’s decarbonisation targets at risk. If manufacturers stepped up, innovations in aircraft technology could save the equivalent of the annual CO₂ emissions of 62 million petrol and diesel cars. These innovations must be combined with measures to address demand and under-taxation of the sector.

Aircraft innovation has stalled, but new modelling reveals significant potential

Repeated delays in aircraft technology innovation are hindering aviation’s green transition. But new T&E analysis suggests that European aviation could be up to 13% more efficient by 2050 in an ambitious yet achievable innovation scenario — saving enough renewable electricity to power 27 million heat pumps. This scenario is in comparison to a “business as usual” scenario, and assumes that cleaner, more advanced technology, including zero-emission aircraft, will be developed and widely used, following expert forecasts [1]. If manufacturers went even further, efficiency gains could increase to 17%.

Innovation in the aviation sector has steeply declined over the past decade, with no new aircraft models expected in the next ten years either. Although Airbus and Boeing — the world’s two biggest aircraft manufacturers — have unveiled new disruptive designs [2], including the world’s first large hydrogen aircraft, these have been delayed or paused.

In the absence of new aircraft models, Airbus and Boeing continue to reissue older airframes with updated engines [3]. While these offer emissions reductions, greater ones could be achieved through new designs.

T&E modeling shows that, under a scenario more ambitious than the industry’s “business as usual” pathway — which assumes a quicker entry into service of new, innovative aircraft — cumulative CO₂ emissions from European aviation could be reduced by 123 million tonnes (Mt) by 2050. This would be equivalent to removing 62 million petrol and diesel cars from European roads for a year. This scenario is well within reach, based on projections from the ICAO and ICCT.

Carlos López de la Osa, Aviation Technical Manager at T&E, said: “Improved aircraft designs have a role to play in aviation’s decarbonisation by reducing energy consumption and CO₂ emissions. But manufacturers keep kicking the can down the road, undermining aviation’s green transition. The market is stagnant, and there is no sign of life from the biggest players. For aircraft technology to have the chance to make a dent in emissions and energy consumption by 2050, we urgently need strong policies and market incentives to spark truly radical innovations — not the archaic re-engining we’re seeing from manufacturers right now.”

Lack of competition and effective policies are hampering innovation

Airbus and Boeing are the two clear leaders of the aircraft design and manufacturing industry [4], with their combined deliveries expected to account for 95% of future emissions from aviation.

In light of Boeing’s recent safety issues and financial woes, Airbus has comfortably slipped into the number one position. But, over the past decade, its Research and Development (R&D) expenditure has flatlined, while dividend payouts have soared – increasing from €500 million in 2012 to €2.38 billion in 2024. Instead of using this leadership position to innovate and introduce disruptive technologies to the market faster, Airbus relies on small tweaks to its existing planes. At the same time, the manufacturer has delayed its hydrogen plane, and referred to its next new jet fuel-powered aircraft design as “evolutionary, not revolutionary” [5]. The latter is not expected before “the second half of the 2030s” [6].

“Airbus’ ambitions have gone from introducing a couple of new models every ten years to tweaking its old models for the foreseeable future” said Carlos López de la Osa. “If it shifted its focus away from pleasing its shareholders and towards aviation’s decarbonisation, Airbus designs could be game-changers for the commercial aircraft market. That being said, healthy competition is the lifeblood of innovation, so dedicated support for smaller companies is needed to inject new life into the market and propel it towards greener, cutting-edge technology.”

To revert the decline in aircraft technology innovation and help meet the sector’s climate goals, T&E urges national and EU policymakers to eradicate tax exemptions for aviation, which incentivise manufacturers to keep delivering planes powered by subsidised fossil fuels, instead of designing new aircraft with significant efficiency improvements.

Credible CO₂ standards are also urgently needed to drive the design and production of less emitting aircraft. Finally, support should be provided to help innovative companies, especially those developing zero-emission aircraft and infrastructure, and other disruptive technologies, rebalance the market and prove the viability of green solutions.

Notes:

[1] Projections cover between 2030 and 2040, in line with independent expert reviews performed by ICAO, CAEP, and the ICCT.

[2] Disruptive designs refer to breakthrough innovations like electric or hydrogen propulsion and new airframe concepts that enable much deeper emissions cuts than conventional upgrades.

[3] Some of the airframes date back to the 1980s in the case of Airbus A320neo, and more to the 1960s for the Boeing 737MAX. These have lower efficiency gains than entirely new designs using the latest developments in aerodynamics and new materials.

[4] The market of short haul aircraft, between 100 and 200 passengers, and with a range of up to 6000 km, is dominated by the Airbus A320 and the Boeing 737 families, with other companies such as Embraer and COMAC capturing a small part of the sales. On the long haul market of aircraft beyond 200 passengers and 6000 km, Airbus and Boeing are the sole providers, with the Airbus A330 and A350 families, and the Boeing 777 and 787.

[5] Reuters, 2025. Airbus says next jet ‘evolutionary not revolutionary’

[6] Airbus, 2025. Airbus advances key technologies for next-generation single-aisle aircraft

Article published first on T&E website.