IATA challenges EU climate deal following ambitious airlines fuel tax proposal

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The European Union’s executive Commission presented the ‘Fit for 55’ climate deal on July 14, 2021, which is a package of proposals aimed at adapting the EU’s climate, energy, land use, transport and taxation policies.

The statement released by the Commission targets the aviation sector proposing the introduction of fuel taxes, priced relative to other industries, and calls for the increased use and implementation of sustainable aviation fuels SAF and synthetic low carbon fuels in jet fuel taken on-board at European airports.

According to the ReFuelEU Aviation initiative, suppliers would be obliged to blend a minimum of 2% of sustainable aviation fuel into their kerosene from 2025, rising to 5% in 2030 and 63% in 2050. The initiative expects synthetic carbon fuels to play a role in achieving decarbonization in the sector by 2030, and contribute approximately 28% of aviation fuel mix by 2050.

The proposals fit into the European Commission’s scheme that aims to reduce net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

“This is the make-or-break decade in the fight against the climate and biodiversity crises. The European Union has set ambitious targets and today we present how we can meet them,” said Executive Vice-President for the European Green Deal, Frans Timmermans. “Getting to a green and healthy future for all will require considerable effort in every sector and every Member State. Together, our proposals will spur the necessary changes, enable all citizens to experience the benefits of climate action as soon as possible, and provide support to the most vulnerable households. Europe’s transition will be fair, green and competitive.”

The International Air Transport Association (IATA) has challenged the EU’s ‘Fit for 55’ proposal deeming it “counter-productive to the goal of sustainable aviation. “The Association called for the EU to support policies with pragmatic emission reduction measures highlighting incentives for sustainable aviation fuels and modernization of air traffic management.

“Aviation is committed to decarbonization as a global industry. We don’t need persuading, or punitive measures like taxes to motivate change,“ said Willie Walsh, IATA’s Director General in a statement.“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 SAFs and delivering the Single European Sky.”

IATA outlines an approach to achieving decarbonization comprising a combination of SAFs, market-based measures, the Single European Sky (SES) initiative and innovation towards radical new clean technologies.

Despite implementation delays from EU governments, modernizing European air traffic management (ATM) through the SES initiative is estimated to have a 6-10% reduction in EU emissions. Additionally, high prices and limited supply of SAFs, which reduce emissions by 80% in comparison to traditional fuel, has limited airlines uptake to 120 million litres in 2021 from an annual average of 350 billion litres.

“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,“ added Walsh. “We should all be worried that the EU’s big idea to decarbonize aviation is making jet fuel more expensive through tax. That will not get us to where we need to be. Taxation will destroy jobs. Incentivizing 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.”

 

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