(Not) Flying in Business As Usual Towards “Fit for 55”

Direct greenhouse gas (GHG) emissions from the aviation sector now account for 3.6% of the European Union’s total emissions, and this is only set to rise. To curb this, the EU is revising its often criticised Emissions Trading System (ETS). In this article we explain this revision and what it means for the future of flying. 

Domestic flights, meaning flights within countries’, or regions’ borders, are the most carbon-intensive means of transportation, followed by international flights. To put it in numbers, if we calculate per-kilometre carbon emissions, a passenger on a domestic flight is, on average, “responsible” for the production of 255 g/km of CO₂ per flight. International flights by contrast produce around 150 g/km of CO₂ per passenger. In comparison, a passenger on a domestic train only accounts for 41 g/km of CO₂, and international trains (e.g. the Eurocity) produce only 6 g/km of CO₂ per passenger (4% that of an international flight). Notwithstanding this, the number of flights taken has increased by 60% from 2005 to 2017.

Imagine you are a student at the University of Amsterdam, but your family lives in Milan. In order to visit your family, let’s suppose that three times a year, you take a plane from Amsterdam Schiphol Airport to Milano Malpensa Airport in economy class. The one-way distance is circa 800 km, a roundtrip 1,700 Km. Thus, for one round-trip, your carbon footprint would be 0.535 tonnes of CO₂. Just for travelling to and from your home country, your carbon footprint is around 1.6 tonnes of CO₂ per year. If this lifestyle was a common practice of all Italian citizens, the carbon footprint per capita would increase from 5.4 to 7.02 tonnes of CO₂, considering 2018 data. In view of the extreme impact this lifestyle has on the climate and the environment, how can these emissions be addressed at the European Union (EU) level, and how can we incentivise  other, more climate-friendly means of transport?

The aviation sector contributes significantly to the EU’s GHG emissions. To tackle this, the EU has put into place the Emissions Trading System (ETS), to cover emissions produced by, amongst others, airplanes flying to and from EU airports, since 2012. Accordingly , airlines have to buy permits for the emissions they cause during flights between EU countries. As the number of available permits is reduced every year, they become scarcer over time and their prices increase. However, the current system has proven ineffective in covering the growing number of flights and emissions. To deal with this policy gap, the EU is proposing to strengthen the regulatory framework in order to lead the way towards a carbon-neutral global system.

As part of the European Green Deal, the EU aims at achieving net zero GHG emissions by 2050. In order to achieve this, it is necessary for EU institutions to review the already existing legislation in the aviation sector, update targets, and adopt new legislative measures. Regarding the aviation sector, the Commission mainly aims at:

• Increasing the price and hence effectiveness of the EU ETS;
• Adding new taxes on substances (such as on kerosene);
• Incentivising the demand for sustainable aviation fuels.

There are both pre-existing and new measures to address emissions in the aviation sector.

A surplus number of permits have been building up since 2009. This has led to lower carbon prices and a weaker incentive to reduce emissions. The upcoming revision aims to reduce the total number of permits available at a faster rate (from 1.74% to 2.2% reduction every year), to simply give 100% free allocation to the highest risk sectors, and to revise the Market Stability Reserve (MSR). Surplus permits are placed in this reserve and from 2023 onwards, permits from the previous year will no longer be valid. Money collected from the sale of permits goes into the Innovation and Modernisation Funds, which invest in low-carbon technologies and improved energy efficiency. This is necessary to ensure the Commission meets its goal of reducing GHG emissions from sectors under the ETS by 43% compared to 2005 from 2021 to 2030.

This Directive (2003/96/EC) has been in place since 2003 and sets the rules on how energy sources such as petrol, diesel, and electricity are subject to taxation. With the recent revision, the Commission is proposing to start expanding taxation to kerosene (the fuel used by airplanes), based on the amount of GHG emissions it causes. The tax will then hopefully incentivise airlines to work together with fuel companies to come up with more sustainable forms of kerosene and ultimately, an entirely different fuel solution that does not pollute.

This proposal is new and aims to increase the demand for more sustainable aviation fuels. Planes currently run on kerosene, a very polluting type of petrol. The law will mandate that every airport in the EU will only offer a blend of kerosene with a set percentage of a sustainable fuel. This means that when airplanes fuel up at an airport in the EU, they will automatically fly more sustainably. The percentage of sustainable fuel will increase gradually, starting slowly from 2025 (2%) and speeding up afterwards as we expect to have found more solutions for sustainable aviation fuels, and can therefore supply them at scale.

The above mentioned proposals are part of the “Fit for 55” (FF55) legislative framework. This package refers to the legislative revisions and initiatives taken in order to achieve 55% net GHG reduction by 2030. It is indispensable for achieving the ultimate objective of carbon neutrality by 2050: without the package, the EU will only achieve 60% emissions reduction by 2050. Adopted on 14 July 2021, “Fit for 55” contains a set of legislative proposals concerning energy, emission, and transport. For our summary of the FF55 package, click here.

Along with developments in the aviation sector, the package also covers emissions produced by the maritime sector  in the range of emissions covered by the ETS. A separate article covering the inclusion of the maritime sector into the ETS, and the new FUEL EU Maritime initiative will soon be published.