The European Commission (EC) has proposed new taxes on aviation fuel and is also proposing a requirement that 5% of fuel used by EU-based airlines by
The European Commission (EC) has proposed new taxes on aviation fuel and is also proposing a requirement that 5% of fuel used by EU-based airlines by 2030 be sustainable aviation fuel (SAF).
Those policy recommendations are part of a sweeping set of proposals put forward by the commission Tuesday geared toward reducing the bloc’s net greenhouse gas emissions by at least 55% by 2030.
Under the so-called ReFuelEU Aviation Initiative, fuel suppliers would be obligated to blend increasing levels of SAF in the jet fuel delivered to EU airports. That number would rise from 5% in 2030 to 20 percent in 2035 and ultimately to 63% by 2050.
Airlines, meanwhile, would be required to fuel-up consistently during aircraft turns so that they would not have the ability to avoid fueling at airports with SAF, where the price is expected to be higher.
Airlines say SAF can reduce emissions by 80% compared with standard jet fuel. According to IATA, however, insufficient supply and high prices have limited airline uptake in 2021 to just 31 million gallons, a tiny fraction of the 350 billion gallons of jet fuel that carriers would use globally during a typical year.
The EC has also proposed ending the current exemption to fuel taxes that the EU aviation industry enjoys under the bloc’s Energy Taxation Directive. Aviation is currently exempted from EU energy taxes due to the lack of alternatives the industry has to carbon-intensive jet fuel.
The EU’s effort to reduce emissions by at least 55% by 2030 is an intermediary step toward the bloc’s longer-term goal of reaching climate neutrality by 2050.
IATA, on Tuesday, called the new proposals, “counterproductive to the goal of sustainable aviation.”
“Aviation is committed to decarbonization as a global industry. We don’t need persuading, or punitive measures like taxes, to motivate change,” IATA director general Willie Walsh said in a prepared remark. “In fact, taxes siphon money from the industry that could support emissions-reducing investments in fleet renewal and clean technologies.”
Walsh called for tax incentives in order to spur SAF production.
The EC proposals would have to be adopted by the European Parliament in order to become law.