Western nations urged to subsidise emissions-free aircraft

Western nations need to offer more subsidies to encourage the airline industry to switch to electric-powered planes, according to one of the leading emissions-free start-ups.

Anders Forslund, chief executive and co-founder of Heart Aerospace in Sweden, said airlines were generally too focused on short-term profitability and needed countries to follow the likes of Norway, which aims to electrify all domestic flights by 2040.

“Governments are the ones making the rule book,” Forslund told the Financial Times. “There must be an economic incentive for airlines to take on this leadership. It needs a push, and it needs the push now.”

Heart, a start-up based in Gothenburg on Sweden’s west coast, is developing a 30-seater regional aircraft for 2028 and has firm orders for 230 planes from United Airlines and Mesa Airlines in the US as well as Air Canada. Other airlines including SAS, BRA and Icelandair in the Nordics have signed letters of intent for the aircraft, while Air Canada and Swedish defence company Saab became shareholders in September.

Heart recently changed its plans from a pure electric 19-seater to a larger hybrid aircraft, which will use sustainable aviation fuel to power its reserve system needed for emergencies, something that extends its range to 800km from 200km if solely using batteries.

Forslund pointed to public service mandates in the US and Norway as something necessary to help develop such a regional electric plane.

“The reason it works in Norway is subsidies. The fact that they’re rich is that they can pay the premium, just like they did in electric cars,” he said, noting that the success of Tesla’s Model S led to it developing the cheaper Model 3.

Heart is not just touting the zero-emissions potential for its plane but also the lower noise it produces on take-off and landing. By 2040, it believes battery technology will allow it to fly 400km emissions-free and 600km using its hybrid reserves, while its goal for 2050 is to fly 1,500km, capturing two-thirds of all departures and one-third of aviation’s emissions.

The company believes the total cost of ownership for an electric aircraft, which will require less maintenance, should be lower than a traditional plane.

Forslund argued that “a lot of the centre of gravity” in the nascent industry was moving to the US because of the Biden administration’s Inflation Reduction Act, which offers big subsidies for green technology.

“We’re a little bit waiting for the European response,” he said, pointing to the likes of Denmark and Iceland as interesting markets because of renewable energy and relatively short flights.

Ultra-high safety standards and the relatively long distances involved mean aviation is seen as one of the harder industries to make emissions-free. Companies from Airbus and BP to Rolls-Royce are trying different technologies such as hydrogen, battery power and sustainable aviation fuel.

Forslund argued that a mixture of all three was likely to be needed to decarbonise air travel but that there was a risk of aiming for the perfect technology and ending up “in an endless R&D loop”.

“The general problem is not too much too soon but too little too late,” he said. “You need that sense of urgency.”

He added: “How do we make this transition — as airlines, countries and policymakers? This is going to require a combination of established actors, suppliers and industry partners along with new start-ups. The industry needs to reinvent itself.”