Brussels Closes In On Environmental Targets For Aviation
Ryanair had hoped that long-haul flights would be included in the ETS.
If lawmakers in Brussels have reached an agreement on how emissions trading will apply to the aviation sector, it is an agreement sure to disappoint at least some of the region’s airlines, which are also closely monitoring how mandates designed to increase uptake of sustainable aviation fuel plan to be implemented.
On Dec. 7, the European Union Parliament and Council reached a provisional agreement on revising the EU Emissions Trading System for aviation.
- European Parliament and Council agree on Emissions Trading System for aviation
- LCCs have maintained that long-haul flights should be included
- Agreement still not reached on SAF mandate under ReFuel EU
Under the deal, the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) will be integrated, free allowances will be phased out, sustainable aviation fuel (SAF) will be promoted and non-CO2 factors will be covered.
For flights taking off to a non-European destination, Corsia will be considered as a valid means of compliance. The legislation will apply to flights from, to and within the European Economic Area (EEA)—which includes the EU member states, plus Iceland, Liechtenstein and Norway—as well as flights from the EEA to the UK and Switzerland.
However, in case of a negative evaluation of Corsia’s progress by July 2026, the European Commission would be required to make a proposal to include emissions of flights departing from an airport located in the EEA to a third country in the scope of the EU Emissions Trading Scheme (ETS).
To no one’s surprise, the agreement has received a mixed reaction.
“EU negotiators . . . failed to include long-haul flights in the pricing scheme,” said Jo Dardenne, aviation director at Transport & Environment, a European, transport-focused environmental nongovernmental organization, in a Dec. 7 statement. “As a result, 58% of Europe’s aviation CO2 emissions will remain unaccounted for.”
Dardenne described Corsia as “a cheap and dubious offsetting scheme that has been proven time and time again to fail in effectively dealing with aviation emissions.”
In contrast, airline advocacy group Airlines for Europe (A4E) criticized the move to phase out free allocations in 2026, noting that date is “well before truly effective decarbonization solutions will be available at the scale needed for them to be effective.”
Low-cost carriers (LCC) say the decision not to include long-haul flights in the ETS is unfair.
“There’s an extraordinary inequity in European carbon taxation at the moment, particularly in the way it’s applied to airlines,” Ryanair CEO Michael O’Leary said during a Dec. 1 briefing, organized in conjunction with Transport & Environment before the agreement was reached. “We believe every passenger should pay a fair share toward carbon taxation.
“Long-haul flights to and from Europe account for between 52-54% of European aviation CO2 emissions but only deliver 6% of the passengers,” O’Leary said. “It’s indefensible, it is inexplicable and it is manifestly unfair on Europe’s citizens.”
However, the International Air Transport Association (IATA) also said, at a Dec. 6 media day in Geneva, that it wanted to ensure that long-haul flights would not fall within the ETS.
While the ETS legislation touches on SAF—with an agreement to reserve 20 million allowances between January 2024 and December 2030 for commercial aircraft operators that increase their use of SAF—trilogue talks between the EU Parliament, the EU Council and the European Commission have thus far failed to reach an agreement on ReFuel EU, the key piece of legislation that Brussels hopes will help the SAF industry get off the ground and allow what is seen as the most realistic and effective short-term answer to cutting aviation’s emissions to fulfill its potential.
The details of the inclusion of synthetic fuels is a sticking point in the alternative fuel legislation.
Whatever the final outcome of the talks, the airline industry agrees that more needs to be done to encourage SAF production—and fast.
SAF is scarce and expensive, on average 2.1 times the price of standard jet fuel over the past four months, a smaller margin than operators are accustomed to largely because of the increase in oil prices in recent months, IATA said.
IATA Director General Willie Walsh told the media briefing in Geneva: “In the U.S. they have recognized for some time now that SAF is a big part of the answer, and they are heavily focused on additional production. We’re not seeing it to the same degree in Europe.
“Mandating something that is not available to buy is nonsense,” Walsh added. “We need a policy framework that supports greater production. We need governments to provide the right financial incentives for the production of SAF.
“Traditional fuel suppliers have benefited significantly from revenue flows from our industry and yet few, if any of them, have put real investment into the production of SAF,” Walsh said. “In 2021 and 2022, the industry has used every single drop of available SAF despite the significant premium. I think there’s an opportunity there for some market disruption.”
IATA estimated that SAF production will reach at least 300 million liters (79 million gal.) in 2022—a 200% increase on 2021’s 100 million liters—while it said more optimistic calculations put total production in 2022 at as much as 450 million liters. “Both scenarios position the SAF industry on the verge of an exponential capacity and production ramp-up toward an identified tipping point of 30 billion liters by 2030, with the right supporting policies,” IATA said.
SAF will account for about 65% of CO2 abatement in the industry between now and 2050, IATA said, and for that 450 billion liters of SAF would be needed—noting that aviation needed to make sure it secured its share of SAF from biofuel refineries, which also produce biodiesel and biogas.
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