By amending the original proposal of the European Commission last Thursday, the European Parliament Transport committee has significantly upped ambitions to raise the level of sustainable aviation fuels (SAFs) until 2050. The EP voted to have a minimum of 85 percent of SAF available for the aviation sector in 2050, up from 63 percent in the original draft. The 85 percent includes a minimum of 50 percent of synthetic aviation fuels or e-fuels or electricity, up from 28 percent in the draft. European Parliament raises the bar of SAF targets. Increasing the share of SAF is an instrumental part of the EC’s Fit for 55 strategy to get aviation to net zero emissions by 2050. Unveiled a year ago, the draft of the ReFuel EU plan has been extensively amended after intense debate and lobbying. Most changes are targeted for the middle of this century. For instance, the target of SAF availability in 2025 has remained unchanged at two percent, although it now includes 0.04 percent of synthetic fuels. By 2030, a minimum of six percent of SAF should be available instead of five percent in the original draft, of which two percent e-fuels (was 0.7). Unchanged is the target for 2035 with twenty percent SAF and five percent e-fuels, but from 2040 on, the Parliament gets more ambitious. The minimum share of SAF has gone up from 37 to 40 percent, of which thirteen percent e-fuels (was eight percent). In the final step towards 2050, the target for 2045 has been amended from 38 to 54 percent, of which 27 percent should be available as synthetic fuels (was eleven percent). Meeting these targets for SAF production will not be easy, as IATA outlined during the recent AGM in Doha. Excluding food-crop-based feedstock The European Parliament voted to exclude certain food-crop-based feedstock to produce SAF like palm fatty acid distillates: “For sustainability reasons, feed and food crop-based fuels, including high indirect land-use change risk biofuels such as those derived from palm oil, should not be eligible. In particular, indirect land-use change occurs when the cultivation of crops for biofuels displaces the traditional production of crops for food and feed purposes. Such additional demand increases the pressure on land and can lead to the extension of agricultural land into areas with high-carbon stock, such as forests, wetlands, and peatland, causing additional greenhouse gas emissions and loss of biodiversity concerns”, the amended proposal says. It adds: “Accurate and correct information about the characteristics of sustainable aviation fuels is of major importance for the proper functioning of this Regulation. In order to promote consumer confidence and ensure transparency and traceability, fuel suppliers are responsible to provide the correct information with regards to the characteristics of the fuel supplied, its sustainability characteristics, and the origin of feedstock used in the production of the fuel.” EASA will be responsible for developing a labeling system from 2024 for the environmental performance of aviation, including aircraft, aircraft operators, and commercial flights. Concerns about inequality One of the concerns of the airline industry is that the blending targets and the higher price of SAF will result in inequality between the European Union and other markets without these mandates. But it could also distort the intra-European market when SAF isn’t available in all regions. That’s why the EP included an additional paragraph to the draft to cover these concerns: “In order to prevent distortions of competition in the international aviation market, that could lead to the loss of traffic flows connecting through EU airports and to carbon leakage and in order to create a global market of sustainable aviation fuels, the Union external aviation policy should take a global lead in the shift towards the use of sustainable fuels, engage in international negotiations to harmonize definitions and standards of sustainable air fuels and promote international convergence on the rules concerning the production, uptake, and uplift of sustainable aviation fuels. It is therefore important that the Union sustains its efforts at ICAO and strives for an ambitious global system that promotes a global market for sustainable aviation fuels and provides for an international level playing field. The Commission and Member States should therefore advocate at the ICAO General Assembly to immediately start negotiations for an ambitious global policy framework at ICAO level for the uptake of sustainable aviation fuels.” Further on, the text says: “The introduction in the Union of a mandate on the uptake of sustainable aviation fuels could lead to an undue competitive disadvantage for EU airlines operating direct long-haul flights from a Union airport in comparison with their competitors connecting via an airport hub outside the Union. In order to further promote the uptake of sustainable aviation fuels in the Union, for which prices are predicted to have a substantial price difference compared to conventional fuel in the foreseeable future, airlines should be able to claim free allowances for the uplifting of sustainable aviation fuels under the ETS scheme.” On peripheral regions, the draft that has been adopted says: “It is essential that less-connected European regions, such as insular and outermost regions, that often rely on aviation as the sole means of connection, are not disproportionally affected by the obligations resulting from this Regulation and that access of these regions to essential goods and services is ensured. In order to help safeguard the air connectivity of regions with fewer alternative transport options, attention should be paid to the possible effects of the provisions in this Regulation with regard to the affordability, competitiveness, and potential price increases of air routes connecting remote regions and other areas of the Union.” Another concern is that of fuel tankering, where airlines take on extra fuel at airports where it is cheaper to get. The EP draft specifically adds that fuel tinkering for economic reasons is “unstainable and should be avoided as they undermine the Union’s efforts to reduce environmental impacts from transport. (…) The amount of fuel uplifted prior to departures from a given Union airport should be commensurate with the amount of fuel necessary to operate the flights departing from that airport, taking into account the necessary compliance with fuel safety rules. The requirement ensures that equal conditions for operations in the Union applying equally to Union and foreign operators while ensuring high level of environmental protection.” A4E still not fully satisfied Yet, lobby organization Airlines 4 Europe (A4E) remains concerned. In a media statement, it said on July 7: “A4E airlines continue to be concerned that future legislation will price out certain passengers or peripheral regions of Europe, leading to a loss of their air connectivity as well as impact the competitiveness of European aviation and its tourism sector. Because SAFs, and especially e-fuels, will remain significantly more expensive than conventional jet fuel in the coming years, it is key that targets remain reasonable and that policymakers work to limit the cost of the energy transition for passengers. Mechanisms such as a system of SAF allowances through the ETS will help bridge the price gap between SAF and conventional fuels, but risk falling short if not designed to offset the full loss of competitiveness and potential carbon leakage.” The risk of carbon leakage has been raised by EU stakeholders since last year. Sustainable Aviation Fund The Parliament also included the initiative to establish a new Sustainable Aviation Fund for the period between 2023 and 2050 to accelerate the decarbonization of the aviation sector, “in particular to support the investment in innovative technologies and infrastructure for the production, uptake, deployment, and storage of SAFs, other innovative aircraft propulsion technologies, including hydrogen and electricity, research for new engines and direct air capture technology, and efforts to reduce the non-CO2 effects of aviation.” The EU already has had various technology programs and launched its latest version, Clean Aviation, in December last year. The fund should become an integral part of the EU budget. From 2026 and every three years after that, the European Commission should provide a report to the EP and European Council on the status of the Regulation, its impact on the market, and the evolution of the aviation fuels markets. Finally, the Regulation is to include “effective, proportionate and dissuasive penalties on aviation fuel suppliers and aircraft operators in case of non-compliance.” The negotiating mandate was adopted by 334 votes to 95 and 153 abstentions. The Parliament is now ready to start negotiations with member states.
