What can you take away from COP 28 for the business travel industry, as you represented the GBTA for the first time in Dubai?
Delphine Millot - The GBTA had just been granted observer status at COP 28. And to see over 190 countries represented was truly impressive. When we talk about reducing emissions in the business travel sector, all eyes are of course on aviation. And at UN level, the International Civil Aviation Organization (ICAO) decided ahead of COP 28 to organise a 5% reduction in emissions by 2030by using alternative and sustainable aviation fuels (SAF). ICAO's ambassador to the COP took advantage of the event to relay the "good news" at various conferences. But all the sectors are talking about a necessary reduction of 50% by 2030. So there was a lot of debate on this point: why 5% only in the air transport sector? All the while knowing that this implies multiplying SAF's production by 100, which is a phenomenal challenge, because it takes at least three or four years to build all these factories. And it's still very risky because these fuels are much more expensive than conventional paraffin. So we're not even sure we'll be able to achieve this 5% target unless there's a huge transformation of the sector, and the financing that goes with it. The question is also: what will happen between 2030 and 2050? There's a real grey area here in terms of travel and aviation, because we're talking about going from 5% reduction in 2030 to net 0 in 2050... So there's a lot of work to be done to set intermediate targets. In particular, this will be the subject of discussion at European level: at the beginning of 2024, the EU is due to decide on its 2040 target, and I'm sure that this will generate discussions for the business travel sector and the travel industry in general. It's quite difficult because it really depends on the production of these fuels. Europe is defending its approach as the most effective, based on the ETS (Emission Trading System). With this system, in the coming years the price of carbon will rise, reducing the price gap between sustainable fuels and fossil fuels for aviation.
Europe and the United States have adopted two very different strategies on the FAS issue. Which do you think is the most appropriate?
Delphine Millot - In the long term, the European approach brings a degree of clarity and security with Refuel EU, with targets for 2030 and beyond. There is a regulatory framework, so there will be no choice, and this sends a signal to the market and investors. The situation in the United States is much less clear-cut. The tax breaks granted by the Biden administration are based on a budget cycle. If the administration changes at the next election, everything could disappear. Of course, the whole sector applauded the Inflation Reduction Act (IRA), but the rebates were guaranteed for a cycle of 3 or 4 years, which is the time needed to build new factories. So once these plants are up and running, we can't be sure that they will still be available. It is also very important to have strict and transparent criteria for what qualifies as a sustainable fuel and what does not. On this point, there is a consensus around the ICAO model, so there is at last an international reading grid. This is crucial to facilitating production in countries outside the United States and the European Union. Because the transition is going to be a global transition.
How would you sum up your two years as Senior Vice President for Sustainable Development at the GBTA, and what are your priorities for 2024?
Delphine Millot - The results are positive, if only because we were starting from scratch. Not in terms of effort, because the buyers and suppliers were already involved, but in terms of a coordinated approach at business travel level and on an international scale. The support was enormous. We were able to pinpoint the activities that would produce results, and we set up specific training programmes. We are also working hard on harmonisation, to have industry-wide criteria for the environmental performance of suppliers. We have worked with buyers and suppliers to set up reading grids and questionnaires that will form part of calls for tender for hotels. After the hotel sector, at the beginning of 2024, we will be extending this work to the air, car hire and rail sectors. There is also a great deal of dialogue with politicians to demand a clear and fair regulatory framework. In the coming months, several crucial elections will be held in Europe, the UK and the US. We need to ensure that we have a support for the sustainable transition of business travel. At European level, this is being achieved in particular through intermodality. We are campaigning for better integration between rail and air transport, especially in terms of booking platforms. For 2024, one of our priorities is also to launch an accelerator. For us, it's important to have this approach because many multinationals are GBTA members. They have the resources and the teams to implement fairly sophisticated strategies to reduce their emissions. But we would like to reach a much wider category. We're even hoping to launch a competition between SMEs to see what can be done creatively to help companies reduce their emissions.
Who - suppliers, buyers or travellers - has the most effective leverage to make progress towards responsible travel?
Delphine Millot - There are levers at all these levels, but they are not always implemented in a concerted way. The question remains of who pays... That's why we're pushing for harmonisation. With common rules, a supplier who invests in sustainability, with a corresponding increase in its prices, will no longer be at a disadvantage if it is a legal obligation to do so. At buyer level, we are seeking to reduce price hypersensitivity. We need to consider travel less and travel betterThis means choosing more responsible suppliers, opting for better quality SAF, etc. And to do this, the company's top management needs to be really involved, and to see this approach as a long-term investment, so that its employees retain the right to travel. The question that always comes up is: how can this transition be financed? That's why we're going to be talking more and more about carbon pricing in 2024 in the business travel sector. At the political level, there is a lot of pressure for the emergence of new carbon taxes, particularly on air travel. But for our part, what we can put in place without waiting for the outcome of these controversial discussions are in-house carbon budgets with a high carbon price.
What role do or could booking tools play?
Delphine Millot - A great deal of progress has been made in the aviation sector, such as the Travel Impact Model. Google has created a very powerful model for calculating and predicting emissions on each flight, which was initially used on Google Flights. But if the same flight displays completely different emissions depending on the search engine, it makes no sense. So Google created a coalition, Travalyst, which brings together the GDSs and the booking tools. Unfortunately, these booking tools are more leisure than corporate at the moment. There's also the issue of buyer confidence. They want to be sure that the promise of less emission for a higher price is true and verified. Working on a reliable, transparent model that is adopted by the entire industry is essential. And there is going to be enormous progress in the air transport sector in 2024, with CO2 Connect among the airlines, the work of the European Commission... The good news is that all these players are around the same table to work on a model that will make sense for the whole sector.
Do these initiatives give you cause for optimism about 2024?
Delphine Millot - Yes, because I think we're at a point of no return and progress will continue. The discussion, the point of tension, concerns the acceleration of this progress, which is still too slow. We can talk about emissions in terms of intensity, and congratulate ourselves on the fact that emissions are falling for every journey we make. But for the climate, we can't be satisfied with that: we need to talk about absolute reduction in emissions. And that's the whole problem, it's a huge challenge for our sector in a context of increased post-pandemic travel. It's a challenge that our industry is not going to solve in 2024. It will be a question of striking a very delicate balance, prioritising travel that has a return on emission and a return on investment. It's a message that's obviously not very well received by all the players, but it's a reality that our sector has to face up to.
