The first and most eye catching initiative is the proposal to end jet fuel’s tax exemption. This would end the anomaly where motorists are taxed on petrol and diesel, but airlines get their jet fuel tax free in what is in effect a subsidy for pollution. It would also generate revenues and provide financial incentives to develop cleaner technologies like e-kerosene or more efficient aircraft.
But the good news is tempered by exemptions and loopholes. The biggest is that the reforms only apply for fuel used on flights within Europe, exempting 63% of fuel sales. And airlines will still enjoy the privilege of paying minimal tax rates for 10 years before the proposed rates come into force fully. Cargo-only flights will also continue benefiting from unfair tax treatment by being excluded from these taxation rates.
Alongside the jet fuel tax proposal are reforms to Europe’s carbon market, known as EU ETS. The overall ETS, which covers large stationary installations (think coal plants) as well as flights within Europe, is being reformed. That should drive up the price of credits, and will bring forward the date for when emissions must reach zero. Combined, these will drive new fuels and technologies.
However, loopholes and exemptions are set to undermine this too. Flights departing from Europe – responsible for over 60% of emissions – will remain exempt. Instead, the European Commission proposes that these flights be covered by an industry-crafted offsetting scheme, despite the Commission’s own research demonstrating that this scheme is completely ineffective.
The final proposal in the trio of proposals to affect aviation may, in time, have the biggest impact. The ReFuelEU regulation proposes that, from 2025, jet fuel sold in Europe will have to include an increasing blend of Sustainable Advanced Fuels (SAF), in this case a mix of advanced biofuels and e-kerosene. That share starts at 2% in 2025 and 5% in 2030, increasing further in 2035 and beyond.
This will apply to all fuel sold in the EU meaning this proposal, unlike the jet fuel tax and ETS proposals, will cover long haul flights. Finally, Europe accepts that it should regulate all aviation emissions, not just a minority.
The inclusion of a subtarget for e-kerosene is crucial as it is the only fuel with the potential to be scaled up over time to meet the fuel demands of the sector. The mandate for advanced biofuels, on the other hand, could prove a risky bet: a lot depends on the type of advanced biofuels, and whether essential safeguards are in place. Recent research found that even used cooking oil based fuels are often highly problematic. Much work remains to be done, however. The e-kerosene target needs to be scaled up even faster, without compromising sustainability. That can be done by ensuring sustainable sources of CO2 are used in production, and through strong industrial support to help bring the price down.
However, what’s missing from this package is a comprehensive programme to address flying’s non-CO2 climate effects, despite these being responsible for two-thirds of the warming effect of the sector and despite effective solutions like rerouting a small number of flights.
Decades of inaction are finally being replaced by action and transport’s ‘forgotten child’ is no longer being ignored. Now it’s time for the legislators to step up ambition, we are still a long, long way from decarbonised flying.