Mixed reaction to the EU’s ‘Fit for 55’ plan

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The aviation industry has responded with qualified criticism to the additional cost burdens implied by the European Commission’s “Fit for 55” package, which proposes to add new taxes on jet fuel, to make the blending of sustainable aviation fuel (SAF) and end free carbon allowances. for an industry still reeling from the slowdown caused by COVID-19.

Announced on July 14, 2021, the ambitious climate change plan builds on existing European Union (EU) policies and legislation to reduce net greenhouse gases by 55% from 1990 levels by 2030, as part of ongoing efforts to achieve a climate neutral continent by 2050..

In response, the International Air Transport Association (IATA) warned that the use of taxation as a solution to reduce aviation emissions was “counterproductive”. “EU policy must support practical emission reduction measures such as incentives for SAF and modernization of air traffic management,” he said in a statement.

“Aviation is committed to decarbonization as a global industry. We don’t need persuasive or punitive measures like taxes to motivate change. In fact, taxes are siphoning money from industry that could support emissions reduction investments in fleet renewal and clean technology. To reduce emissions, we need governments to implement a constructive policy framework which, for the time being, focuses on production incentives for SAF and the achievement of the Single European Sky ”, said the Director General from IATA, Willie Walsh.

Airlines for Europe (A4E) chief executive Thomas Reynaert said the proposals would have a transformative impact on the sector, but warned that “poorly designed European taxes will not reduce emissions”. “By making the flight more expensive, it can shift demand globally and reduce traffic locally. But it will not attack the source of the emissions. We need to invest in solutions that offer real reductions in CO2 emissions per aircraft. The increased costs reduce our ability to make these investments while CO2 emissions are potentially shifted to other regions, ”he added. A4E is the largest association of airlines in the EU, accounting for 70% of European air traffic.

IAG CEO Luis Gallego said: “With the right policy measures in place to boost supply, we believe that 10% of the world’s jet fuel can be replaced by sustainable aviation fuel by 2030. While this is an ambitious goal, we know from the progress we have seen over the past two years that it is achievable. The key to achieving it is to accelerate global production. A commitment to The ICAO General Assembly next year to achieve 10% SAF by 2030 will be a key milestone in building these SAF factories. ” He said aviation cannot achieve its sustainability ambitions on its own. “Everyone in the ecosystem, from manufacturers, from air traffic control to fuel companies and governments, must play their part.”

The Airports Council International (ACI) welcomed the SAF’s proposals, saying it was “a long-time supporter of an EU-wide blending mandate requiring fuel suppliers to include fuels from the air. ‘Sustainable Aviation in the Global Aircraft Fuel Supply’. “The existing fuel infrastructure at airports is fully compatible with the use of sustainable aviation fuels. This has already been successfully demonstrated by the deployment of such fuels at airports in Norway (Avinor) and Sweden (Sweden) as well as in Zurich, Munich, and Clermont-Ferrand airports, ”said ACI.

The most relevant aviation implications in “Fit for 55” include:

  • A review of the EU Energy Taxation Directive (ETD) which will phase out the current free emission allowances for aviation for the use of fossil fuels and align with the global offset agenda and ICAO Carbon Emissions Reduction for International Aviation (CORSIA) to promote clean technologies and fill the gap for polluting fuels. Aviation is currently fully exempt from energy taxation in the EU. The Commission is proposing a kerosene tax based on energy content to be introduced over a transitional period of 10 years from 2023, corresponding to the minimum tax rates applicable to fuels for road transport. Due to existing agreements with countries like the United States, the tax would not apply to intra-EU freight-only flights. A zero rate would be applied to advanced biofuels and aviation electric fuels for a limited period to allow for increased production.

  • An SAF blending mandate as part of a ReFuelEU Aviation initiative, which will require fuel suppliers to blend increasing levels of sustainable aviation fuels into onboard jet fuel at EU airports, including synthetic fuels at low carbon, called electronic fuels. If the proposal is adopted, the ReFuelEU measures would enter into force from 1 January 2023 to 1 April 2024 and would apply to aircraft operators, EU airports and aviation fuel suppliers. Aircraft operators could not claim benefits for using the same batch of sustainable aviation fuels under more than one greenhouse gas regime.

Aircraft operators should also increase at least 90% of their annual fuel requirements at EU airports to prevent ‘fuel offloading’, a practice whereby operators remove more aviation fuel than necessary from a given airport to avoid refueling where aviation fuel is more expensive. The European Union Aviation Safety Agency (EASA) would be mandated to monitor the compliance of all stakeholders.

The ‘Fit for 55’ measures, presented as the most comprehensive EU climate change proposals to date, will require the approval of the 27 EU Member States and the European Parliament. Their announcement was scheduled ahead of the upcoming United Nations Climate Change Conference, COP26, in Glasgow, UK, later this year.

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