BRUSSELS, July 14 — Airlines will lose a tax exemption for aviation fuel and must increase the use of bio-based alternatives while paying more for emissions under European Union proposals unveiled today to make Europe the “first climate-neutral continent”.
Taking aim at a sector deemed responsible globally for up to 3 per cent of planet-warming emissions, the European Commission said aviation must do more to contribute to the EU’s goal to cut economy-wide net emissions by 55 per cent by 2030, from 1990 levels.
Proposals issued after intense last-minute negotiations in the bloc’s executive Commission, call for a progressive introduction of taxes on fuels for flights within the 27-nation bloc, which currently escape EU-wide levies.
A separate proposal would force suppliers to blend a minimum of 2 per cent of sustainable aviation fuel (SAF) into their kerosene from 2025, rising to 5 per cent in 2030 and 63 per cent in 2050.
Parallel restrictions would limit a practice that allows airlines to fly in cheaper fuel from elsewhere for the return trip — a process known as “tanking” — meaning the new SAF quota on suppliers would more easily translate into use by airlines.
In a separate bid to overhaul the EU’s carbon market, the Commission proposed phasing out free CO2 permits by 2026 for airlines whose flights within Europe are covered by the scheme.
That would force carriers to pay more for their emissions, a cost that may be passed on to consumers through higher fares.
Brussels currently gives carriers most of the CO2 permits they need to comply with the carbon market for free, capping their exposure to the price of the permits, which has soared to record highs of above 58 euros per tonne of CO2 this year.
Taken together, the measures would force airlines in Europe to pay a higher price for their emissions and kickstart a market for green jet fuels, which are prohibitively expensive and, as a result, make up less than 1 per cent of jet fuel consumption.
Negotiations ahead
Airlines reiterated calls for a pact with the European Commission in an appeal for support to help meet the targets.
A4E, which represents major European carriers, said the “Fit for 55” policies threatened the competitiveness of airlines and the tourism industry and could mean airlines ended up paying twice for emissions through overlapping measures.
Environmental groups, however, say the EU could do more on items like taxes, which will remain limited to EU flights.
“They are making up for decades of inaction to regulate aviation emissions, but don’t go far enough,” said Andrew Murphy, aviation director at Transport & Environment.
Most of the policies will need to be negotiated and approved by a majority of the EU’s 27 countries and the European Parliament, which could take up to two years.
EU tax changes, however, need unanimous approval from EU governments to pass — a daunting political prospect, since a single country could block them.
Experts say aviation is challenging to decarbonise, since radical new aircraft technology is not expected this decade for all except the smallest regional planes, leaving most emphasis on fuel, taxes or offset schemes in the near term.
Brussels says every sector of the economy must contribute. — Reuters
