LONDON – Eurocontrol has published the 16th edition of its “Think Paper”, where they discuss and highlight several important points, and in this edition, they talk about what reducing 55% of the global aviation CO2 levels could cost.
The costs
Eurocontrol has used 3 scenarios – high, base, and low – to calculate what the costs might be.
They have demonstrated that while hitting the 55% target is doable in every scenario, its success, however, is highly reliant on Market-Based Measures, mainly via the EU Emissions Trading System (ETS), which will contribute 83% to the net reduction.
On the policy side, they have looked at the impact and the extra costs of using Sustainable Aviation Fuel (SAF), how much the kerosine tax is going to impact, and the phasing out of free emissions allowances.
The total estimations over the coming year are €62 billion, which compromises of:
- €29 billion in extra tax costs on kerosene (applied to intra-EEA flights);
- €23 billion in extra ETS costs (applied to EU + UK + Switzerland;
- €10 billion in extra fuel mix costs (applied to all-ECAC based on a 5% SAF / 95% kerosene mix).
The airline industry will have to face an additional cost of €14 billion.
While the costs are currently at a high prediction, the current trend of implementing new measures such as the Single European Sky or the accelerated rate of the airlines’ fleet renewal could reduce the extra cost by €33 billion, making the total cost at €29 billion.
Eamonn Brennan, the current Director-General of Eurocontrol, commented that “this is a challenging time for the European aviation industry, but the pathway to decarbonization is attainable: aviation can cut CO2 emissions by 55% by 2030 compared to 1990 levels.”
“However, its success will rely very heavily on Market Based Measures. While implementing policy decarbonization measures will create significant extra costs for airlines, improvements led by the aviation industry are capable of bringing the extra cumulative costs significantly down from €62 billion to €29 billion by 2030.”
“There is a pressing need to ramp up swiftly SAF production and usage enabling SAFs to compete with conventional kerosene.”
“And if the sector returns to profitability, our High traffic scenario will drive increased revenues which will play a fundamental role in accelerating investment in new technology and thus driving the sustainability transformation.”
“We need to accelerate aviation decarbonization by prioritizing actions, fostering the transition by inter alia offering financial support and encouraging alliances, and balancing taxation with the need for aviation to recover.”
What this would mean?
While looking from the outside, these numbers seem quite big, and something unfeasible. While it may seem like that, just remember that these are the total collective costs every European carrier is facing.
For some airlines, it may be more – such as the ones who are starting to adopt SAF at an earlier stage, as they are the ones who are investing a lot of money – while for some it may be less – such as airlines who are going to invest in it now.
Many airlines don’t want to face the high investing burden, but since the demand is creeping up again, they can use all of that generated income to invest in a more sustainable future.
The SAF usage is beginning to increase, with many new airlines having adopted the new type of fuel mix.
That is one of the very first steps required to begin reducing the total footprint released by airlines. The more SAF is being used, the “cleaner” the planes have become.
