EU Lands Jet-Fuel Deal to Start Decarbonizing Air Travel

(Bloomberg) -- The European Union reached a late-night deal to spur the use of more climate-friendly jet fuels in a bid to gradually start bringing the aviation sector in line with its green goals.

Negotiators from the European Parliament and member states agreed that the share of sustainable aviation fuels made available in the region’s airports should total 6% by 2030, of which 1.2% should be synthetically produced using renewable electricity and carbon captured from the atmosphere. By 2050, the share should be 70% and 35%, respectively.

By 2025, the share of sustainable aviation fuels should already be 2%, according to the agreement. Negotiators also agreed that low-carbon fuels, like nuclear, could also contribute toward the goal for synthetic fuels.

The deal, reached around midnight in Brussels, marks a tentative step toward decarbonizing one of the most hard-to-abate sectors, with zero-emission plane technology — like hydrogen and battery-powered — still very much in its infancy. The hope is that by setting targets for the use of biofuels and so-called e-kerosene, the EU can help spur a nascent fuel market and bring prices down.

Limited Supplies

Airlines are rapidly lining up supplier deals, but the amount of SAF in use is minuscule — less than 0.05%, according to a 2022 report by the European Union Aviation Safety Agency. Because it costs more, airline officials say increasing its use will drive up ticket prices and is likely to dent demand over time.

“European policymakers need to ensure they now follow through and help build a world-leading SAF industry,” said Laurent Donceel, acting managing director of Airlines for Europe. “The EU needs to think about SAF the way it thinks about wind turbines, solar panels and other sustainable technologies in order to support aviation’s energy transition.”

The EU’s decision to exclude controversial biofuel feedstocks such as food crops and palm-oil byproducts was seen as a victory by campaign group Transport & Environment. However, the reliance on used cooking oils and animal fats to meet SAF targets risks shortages in other industries, the group said in a statement. In turn, that could increase demand for palm oil, for example as an animal-fat substitute, T&E said. 

The rules come as part of a broader overhaul in how the EU treats its most polluting transport sector after road vehicles. Aviation will also be included within the bloc’s carbon market, meaning that airlines operating within the EU will have to pay for all of the emissions they produce.

But it is providing incentives to decarbonize too. Around 20 million carbon allowances will be given to airlines until 2030 to help cover the cost of sustainable aviation fuels. Some parts of the sector could also qualify for a green label under its sustainability rulebook, known as the taxonomy, should they meet strict criteria.

Some of Europe’s biggest airline groups, including British Airways parent IAG SA, Deutsche Lufthansa AG, Air France-KLM and Ryanair Holdings Plc, have committed to net-zero emissions by 2050.

Both parliament and member states still have to formally sign off on the deal in the coming weeks.

©2023 Bloomberg L.P.