Financial technology and business services company Fexco has launched a new platform that analyses carbon emissions in the aviation sector, enabling airlines and investors in the sector to manage their emissions in line with Net Zero targets.
The platform, dubbed Pace, could also open up the sector to funding that has been earmarked for sustainability linked finance by allowing it to simulate how changes to the fleet could reduce emissions.
The platform uses publicly available data to track aircraft, with machine learning and artificial intelligence to assess carbon emissions and predict future aircraft utilisation. Accurate data on carbon emissions can be calculated by airline, aircraft, flight and even down to the individual seat per flight.
Stakeholders can use the modelling to see how a shift to a different type of aircraft could improve the carbon performance of its investment, or view the impact of more sustainable aviation fuel on overall carbon emissions in its portfolio. That can play a key role in future decisions, helping to translate carbon into financial risk. The data has been independently validated by KPMG.
The company is targeting lessors, banks, investors, and export credit agencies.
“The opening gambit from a Pace perspective is the stakeholders within the aviation industry, and moving on from there we see multiple use cases across other verticals as well,” explained Pace chief executive Cathal Foley.
“You have a few very large segments that you can wrap your head around the numbers, and we’re on track currently towards achieving a 50 per cent share across the industries in which we’re playing.”
Pace, which is a Fexco sustainability company, is a joint venture between Fexco, and Avocet Risk Management, and forms part of Fexco’s broader strategy in the sustainability sector. It also taps into a growing market that will be fuelled by carbon governance frameworks that re require banks, lessors and investors to track and manage their assets’ carbon emissions. That includes the EU Emissions Trading Scheme (ETS), and the global Carbon Offsetting and Reduction Scheme for International Aviation (Corsia).
Among its customers are SMBC Aviation Capital, which has a fleet of more than 700 aircraft.
“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,”
Mr Foley said the aviation sector was facing a “monumental challenge” in reaching its emissions goals, but that the platform provided a significant first step.
“Ultimately the scale of the problem is enormous,” he said. “We believe that there is no reason why we can’t grow this to be a very significant business from a Fexco perspective. We see this as being well on the way to being a journey that is a hundred million euro business.”
