How to incentivise renewable aviation fuels through the Renewable Energy Directive

For T&E, a prerequisite for any incentives within the REDII is that biojet or other low-carbon alternatives to kerosene are produced from wastes and residues and subject to robust sustainability criteria and that their climate impact is significantly better than a fossil fuel. Power-to-liquids (PtL) produced using new sources of renewable electricity could also make a contribution.

Partially as a result of kerosene being exempt from excise duty and VAT, sustainable alternatives are significantly more expensive. A mandate may therefore be required to encourage their supply into the aviation sector, as a multiplier as part of the REDII results in additional costs being met by the road sector. However, such a mandate should not increase the total volumes of renewable fuels supplied through the REDII as the proposed Commission target (3.6%) is already very stretching. Indeed, our analysis shows is cannot be met sustainably.

Instead, T&E therefore supports the idea developed by MEP Bas Eickhout that suppliers to the aviation sector are required to supply renewable fuels in the same proportion to their current supply of road and aviation fuels. However, aviation fuels should not count towards the denominator of the total volume of fuel to be supplied so no additional demand is created.