The demand of airlines to ground or delay two flagship EU climate policies for the aviation sector would result in soaring emissions, delay decarbonisation and hurt the European Union’s efforts to become a clean tech leader. The EU must hold steady on its course.
The CEOs of major EU airlines have demanded the watering down of the EU’s carbon pricing scheme (the EU ETS) and the mandate for Sustainable Aviation Fuels (SAF) under the REFuelEU regulation should be watered down, according to media reports.
This declaration is yet another attempt by the short-sighted and irresponsible wing of the industry to dismantle progress on one of the more meaningful aviation climate policies in the world, as spelt out in the European Green Deal. Even though it was largely co-built with industry, to say the least, it’s a highly disingenuous signal coming from the sector which, in its own words, is “fully committed to decarbonising aviation”.
EU airlines, like other industries, are flying high on a transatlantic deregulatory wind that is undermining climate ambition. The EU car industry had its go and gained a watered-down carbon dioxide car standard. Airlines now want their cut of this public pie.
Diminishing the ambition of the EU ETS and the SAF mandates – the two main EU policies that have a chance of decreasing aviation’s still-rising emissions – would send a disastrous signal to investors in e-fuels and clean technologies, such as electrolysers, where the EU still has a competitive edge.
The EU institutions would shoot themselves and the European Union in the foot if they were to back down on this ambition. For their part, national governments must urgently implement clear, disincentivising penalty systems for fuel suppliers not meeting the SAF mandates. Indeed, oil and gas companies – who could have easily signed up to a similar declaration aimed at weakening targets – are clearly not doing enough as they fail to invest in e-fuel projects and supply these green fuels to airlines. And EU institutions are just not doing enough to incentivise them to do so.
Fuelling the transition
The SAF funding scheme financed by the EU ETS must be extended beyond the 20 million allowances available today and beyond 2030 until 2040 to provide greater investment certainty and to fund larger SAF volumes, with a refocus on e-fuels/e-kerosene, and away from unscalable and unsustainable oils and biofuels.
Expanding the scope of EU ETS to all departing flights between the EU and other parts of the world will generate significant additional funding for decarbonisation, start tackling Europe’s most polluting flight routes and encourage the reduction of the EU’s share in aviation emissions.
The airline industry’s proposal to align the EU ETS with the International Civil Aviation Organisation’s CORSIA offsetting scheme is ludicrous. In three decades, neither the UN’s ICAO nor its global scheme created 10 years ago has ever given a single incentive for the industry to decarbonise effectively, and airlines have yet to pay a single cent under CORSIA.
History repeating
The history of industry asking the EU to weaken its carbon pricing scheme and delay urgent reforms isn’t new. These efforts have been successful on a few occasions, such as when the ‘stop the clock’ delay on the full scope application of the EU ETS for aviation was introduced to give ICAO time to “develop” CORSIA. Aircraft manufacturer Airbus forcefully lobbied for this too and its CEO at the time warmly welcomed the decision in 2012, which helped it keep its order book long and manage the interests of its Chinese customers.
Despite all these stalling tactics, the EU ETS became the bloc’s first effective decarbonisation policy. It has brought down emissions in the sectors it covers by 47% since its inception in 2005, not least thanks to the strengthening of the scheme in the 2010s to abolish free allowances for the power sector and to reduce the surplus of allowances. Emissions from flights within the European Union – which are covered by the scheme – nevertheless rose by 10% in 2023, though. The phasing out of aviation’s free allowances, fuel subsidies and other tax breaks, the increase of the carbon price, and strong mandates and funding support for SAF are all policies that could reverse this alarming trend. They must be kept, introduced or reinforced.
This European Commission expressed its supposed will to pair the continuation of an ambitious Green Deal with industrial competitiveness. If it is indeed to embrace this mantra, caving into such industry demands puts it on a terrible track very early on in its mandate.
Let us pause and imagine how future generations would look back, in 2050 on a planet that is 3-4°C hotter, at such a dismantling of climate policy. Instead of sacrificing our collective future, we should provide more sticks and green carrots to encourage EU industry to meet tough decarbonisation targets and to become global leaders in clean tech. It is in the hands of policymakers to make this happen.
