EU lawmakers have approved new regulations that require airlines to shift to more sustainable fuels. With the aim of reducing greenhouse gas emissions and combating climate change, these standards mark a crucial step forward in the aviation industry’s transition towards a more sustainable future.
Embracing Sustainable Aviation Fuels:
Under the recently adopted regulations, airlines will be mandated to include a minimum of 2% sustainable jet fuel by 2025, gradually increasing to 70% by 2050. The European Parliament has defined sustainable fuels to encompass a wide range of sources, including synthetic fuels, biofuels derived from agricultural residues, forestry residues, algae, bio-waste, used cooking oil, and specific animal fats. On the other hand, fuels derived from food crops, palm, and soy materials will not be considered sustainable.
Confronting Transportation Emissions:
Transportation emissions constitute a significant portion of the EU’s total emissions, with the aviation sector accounting for 13.9% of these emissions. By only trailing road transport, aviation stands as the second-largest source of greenhouse gas emissions within the transportation sector. These new regulations take a firm stance on combating the environmental impact of aviation and align with the larger EU “Fit for 55” package. This comprehensive package aims to achieve a minimum 55% reduction in emissions causing global warming by 2030, while also striving for climate neutrality by 2050. In order to meet these goals, the EU acknowledges the need to achieve a 90% reduction in transport emissions compared to 1990 levels.
Impetus for Change:
The 518 votes in favor, 97 votes against, and eight abstentions demonstrate the wide-scale support for these new rules. Once endorsed by EU member countries, the regulations will come into effect from January 2024. The European Commission predicts that this move will reduce aircraft carbon emissions by two-thirds by 2050, compared to a hypothetical scenario with no action taken.
Challenges Ahead:
Despite these encouraging developments, the availability of sustainable aviation fuel remains limited. The EU Aviation Safety Agency highlights that the current supply accounts for less than 0.05% of total EU aviation fuel usage. Moreover, the aviation industry faces competition from other sectors in securing sustainable fuel resources. Carsten Spohr, CEO of Lufthansa, recently cautioned automakers against diverting the limited supply of synthetic aviation fuels, emphasizing their crucial role in decarbonizing the aviation industry.
With the adoption of new regulations, EU lawmakers have taken a bold step towards promoting sustainable aviation fuels. By setting specific targets for the inclusion of such fuels, the aviation sector can play a significant role in reducing greenhouse gas emissions and achieving the EU’s ambitious climate goals. However, addressing the scarcity of sustainable aviation fuel and addressing competition from other sectors will be pivotal for the successful implementation of these regulations.
Market Capital Research 