GENEVA, 19 July 2021: Relying on taxation to spur a cut in aviation emissions based on Europe’s ‘Fit for 55’ proposal is counter-productive, warns the International Air Transport Association (IATA).

IATA calls for a shift in EU policy to support practical emission reduction measures such as incentives for Sustainable Aviation Fuels (SAF) and the modernisation of air traffic management.

“Aviation is committed to decarbonisation as a global
industry. We don’t need persuading or punitive measures like taxes to motivate
change. In fact, taxes siphon money from the industry that could support
emissions’ reducing investments in fleet renewal and clean technologies. To
reduce emissions, we need governments to implement a constructive policy
framework that, most immediately, focuses on production incentives for SAF and
delivering the Single European Sky,” said IATA’s director general Willie
Walsh.

Comprehensive Approach

  • Sustainable
    Aviation Fuels
    reduce emissions
    by up to 80% compared to traditional jet fuel. Insufficient supply and high
    prices have limited airline uptake to 120 million litres in 2021 — a small
    fraction of the 350 billion litres that airlines would consume in a ‘normal’
    year.
  • Market-based
    measures
    to manage emissions until
    technology solutions are fully developed. The industry supports the Carbon
    Offsetting and Reduction Scheme for International Aviation (CORSIA) as a global
    measure for all international aviation. It avoids creating a patchwork of
    uncoordinated national or regional measures such as the EU Emissions Trading
    Scheme that can undermine international cooperation. Overlapping schemes can
    lead to the same emissions being paid for more than once. IATA is extremely
    concerned by the Commission’s proposal that European States would no longer
    implement CORSIA on all international flights.
  • Single
    European Sky (SES)
    to reduce
    unnecessary emissions from fragmented air traffic management (ATM) and
    resulting inefficiencies. Modernising European ATM through the SES initiative
    would cut  Europe’s aviation emissions
    between 6-10%, but national governments continue to delay implementation.
  • Radical
    new clean technologies
    . While it is
    unlikely that electric or hydrogen propulsion could have a significant impact
    on aviation emissions within the EU ‘Fit for 55’ timeframe of 2030, the
    development of these technologies is ongoing and needs to be supported. 

“Aviation’s near-term
vision is to provide sustainable, affordable air transport for all European
citizens with SAF-powered fleets, operating with efficient air traffic
management. We should all be worried that the EU’s big idea to decarbonise
aviation is making jet fuel more expensive through tax. That will not get us to
where we need to be. Taxation will destroy jobs. Incentivising SAF will improve
energy independence and create sustainable jobs. The focus must be on
encouraging the production of SAF, and delivering the Single European
Sky,” said Walsh. 

Promoting green fuels

The most practical
near-term solution to reducing emissions is Sustainable Aviation Fuels. Energy
transitions are successful when production incentives drive down the price of
alternative fuels while driving supplies up. The EU ‘Fit for 55’ proposal does
not include direct measures that will achieve this. Without specific measures
to reduce SAF costs, it does, however, propose a mandate to increase SAF use to
2% of jet fuel use by 2025 and at least 5% by 2030.

“Making SAF cheaper
will accelerate aviation’s energy transition and improve Europe’s
competitiveness as a green economy. But making jet fuel more expensive through
taxation scores an ‘own goal’ on competitiveness that does little to accelerate
the commercialisation of SAF,” said Walsh.

Mandating a gradual
transition to SAF is a less efficient policy compared to comprehensive
production incentives, but it may contribute to making SAF more affordable and
widely available in Europe, but only under the following key conditions:

  • It is limited to EU-only flights. This will
    limit the negative impacts on the competitiveness of European air transport and
    potential political challenges from other countries.
  • It is accompanied by policy measures to ensure a
    competitive market and appropriate production incentives. The mandated use of
    SAF must not allow energy companies to engage in uncompetitive practices with
    the resulting high costs being borne by airlines and passengers.
  • It is targeted at locations that have
    substantial airline operations and close proximity to SAF refineries.

Need more concrete actions

The SES has been on the
drawing board for 20 years but has made little progress despite the promise of
a 6-10% improvement in environmental performance, safer operations and reduced
delays.

“Europe’s national
politicians are quick to lecture airlines on the efforts industry should be
making on the environment. But they are silent when it comes to areas of their
own responsibility. Just recently, the European Council failed to show any
leadership to cut emissions by harmonising European air traffic management.
Moreover, the constant absence of political support from states on the SES
proposals undermines the credibility of the ‘Fit for 55’ proposal and the
credibility of Europe’s determination to drive real solutions for
sustainability,” said Walsh.