European airline sector fears competitors from outside the EU that don’t have CO2 reduction goals
European airlines fear losing out to rivals based outside the EU that can ignore the bloc’s emissions-reduction rules to become carbon neutral by 2050. The EU’s “Fit for 55” package sets out an initial goal of reducing CO2 emissions by 55% in 2030 compared with the 1990 level. This involves EU obligations to scale up the use of sustainable aviation fuels (SAFs) to be blended with fossil fuels in all flights departing from European airports. SAFs come from sources such as municipal solid waste, leftovers from the agricultural and forestry industry, used cooking oil, crops and plants, and hydrogen. The makers of the fuels claim they have considerably lower CO2 emissions than conventional kerosene (though about the same when burned in a jet engine). SAF is still in its early stages, with very little produced – and it is much more expensive than kerosene, so flights using it would cost more. If people choose to fly first to Istanbul or Doha or Dubai for the next part of a long flight, it would cost less than flying from a European airport. Airports like Istanbul hope to grow massively in coming years.
European Aviation Sector Fears CO2 Rules Could Clip Its Wings
By Tangi QUEMENER (IB Times)
4th April 2023
European airlines fear losing out to rivals based outside the EU that can ignore the bloc’s emissions-reduction rules to become carbon neutral by 2050.
The “Fit for 55″ package sets out an initial goal of reducing emissions by 55 percent in 2030 compared with the 1990 level.
This involves bloc-level obligations to scale up the use of sustainable aviation fuels (SAFs) to be blended with fossil fuels in all flights departing from European airports.
SAFs come from sources such as municipal solid waste, leftovers from the agricultural and forestry industry, used cooking oil, crops and plants, and hydrogen.
These technologies are still developing and the end product is more expensive, thereby placing additional costs on airlines obliged to use them while passengers will have to pay more for flights.
The aviation sector is growing in Asia and the Middle East and companies based there could benefit greatly as they are not subject to these constraints, industry experts say.
“The European airline industry has to live with the fact that it’s cheaper to bypass environmental reduction ideas if you hop outside of Europe,” Carsten Spohr, CEO of German carrier Lufthansa, said at the Airlines for Europe (A4E) aviation summit in Brussels on Wednesday.
Spohr said an airline flying from Brussels to Singapore via Paris, for example, must pay through a carbon emissions trading scheme for the European leg of the trip.
“If you want to go via Doha, you don’t need to pay emission trading, you also don’t need to be part of blending (SAF and traditional fuels),” Spohr said.
Carbon dioxide emissions from aviation have been included in the EU emissions trading system since 2012.
Under this system, all airlines operating in Europe — both European and non-European — have to monitor, report and verify their emissions, and to surrender allowances against those emissions.
Qatar has obtained a controversial “open skies” agreement with the European Union to increase flights between the country and the 27-nation bloc.
Saudi Arabia plans to make Riyadh a gigantic regional aviation hub like Dubai while Istanbul airport, the main hub of Turkish Airlines, has already surpassed London’s Heathrow and Paris’s Charles de Gaulle by handling 64.3 million passengers last year.
“Istanbul is ideally placed for going to Asia, Africa and eastern Europe. We have to stop being naive,” said Alain Battisti, the former president of France’s National Aviation Federation.
Istanbul plans to triple its flow of passengers.
“Climate change and the legal regulations that go with it are inevitable. Important measures are going to be taken on the EU side, and as a result, the centre of gravity of air transport is likely to shift to the East,” Kadri Samsunlu, the CEO of Istanbul airport, told AFP.
A detailed study in March last year by the Dutch research group SEO said that non-European aviation hubs would gain passengers as a result of the EU measures.
It said intra-European passengers could decline by 14 percent.
Augustin de Romanet, head of France’s ADP airports group, said a major shift east “would make the European companies bankrupt”, though he added: “I think that Europe will eventually avoid this distorted competition”.
A4E interim chief Laurent Donceel said Fit for 55 will increase costs for air carriers by 577 billion euros ($629 billion) by 2050.
The “Europeans for fair competition” group, which includes airlines and unions, is seeking a carbon border tax, like those for industry.
It is a duty on imports based on the amount of carbon emissions resulting from the production of the product in question. As a price on carbon, it discourages emissions and as a trade-related measure it affects production and exports.
Roman Mauroschat, an aviation policy officer at Transport and Environment, a think tank based in Brussels, said a carbon border tax only made sense for sectors where production risked being shifted to third countries exporting goods to Europe.
“Air companies have been warning for years that climate measures will hit their competitivity. However, projections forecast a strong growth in the sector despite the new measures.”
Fit for 55
The European climate law makes reaching the EU’s climate goal of reducing EU emissions by at least 55% by 2030 a legal obligation. EU countries are working on new legislation to achieve this goal and make the EU climate-neutral by 2050.
The Fit for 55 package is a set of proposals to revise and update EU legislation and to put in place new initiatives with the aim of ensuring that EU policies are into line with the climate goals agreed by the Council and the European Parliament.
Why ‘Fit for 55’?
Fit for 55 refers to the EU’s target of reducing net greenhouse gas emissions by at least 55% by 2030. The proposed package aims to bring EU legislation in line with the 2030 goal.
The package of proposals aims at providing a coherent and balanced framework for reaching the EU’s climate objectives, which:
- ensures a just and socially fair transition
- maintains and strengthens innovation and competitiveness of EU industry while ensuring a level playing field vis-à-vis third country economic operators
- underpins the EU’s position as leading the way in the global fight against climate change
… and it continues …
Airline passengers in Europe may have slightly higher ticket prices before long
And end to the era of ‘absurdly cheap’ flights could be coming to an end, in the EU, as Brussels makes industry pay more for carbon emissions. Airline passengers may have to pay slightly higher air fares under newly strengthened EU rules designed to tackle aviation emissions, in a sign that the era of super low-cost air travel may be about to end. The EU wants to require carbon-intensive industries to pay more for their pollution with ticket prices likely to rise by up to €10 per return flight. This would be part of the ETS (Emissions Trading System) which only covers flights within Europe, not outside it. The rules phase out the current practice of allowing airlines to obtain a significant proportion of the permits they need for free by 2026. The total number of allowances in the system will also fall over time, which analysts expect to drive up the cost of aviation carbon emissions. Airlines for Europe, the industry lobby group, said the slight increase could lead to “up to 17% fewer passengers travelling through EU airports by 2035”. How terrible. The EU is considering taxes on aviation kerosene.
Stay Grounded considers “EU 55” proposals to cut aviation CO2 too slow, too many loopholes
The EU Commission has published its Fit for 55 climate package, which includes some changes for aviation. The Stay Grounded network of 170 aviation campaigns organisations welcomes the plan to end the tax exemption for jet fuel, but condemns its slow introduction, the problematic exemption for cargo flights and the limitation to intra-EU flights. It also criticises the unambitious changes in the EU ETS and the adoption of CORSIA for extra-EU flights. A key problem is that flights to non-EU destinations would not be included in the kerosene tax. Member states can and should decide to tax cargo-only and extra-EU flights, but the sector has lobbied hard against any higher charges. The new EU proposal is to introduce a “tighter cap” on the number of free allowances European airlines get for flights within the EU, through the EU ETS. But leaving flights to destinations outside the EU to the CORSIA scheme is unhelpful, as the scheme is too weak to have any effect. The EU consider that sustainable aviation fuels should account for at least 5% of aviation fuels by 2030 and 63% by 2050, and of that synthetic fuels should contribute to at least 28% of the aviation fuel mix by 2050. Stay Grounded says this is ridiculous, as is placing too much reliance on “sustainable” jet fuels in future, with their likely environmental impacts and demand for electricity.