IATA official: Incentives needed for green alternatives to kerosene

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Alternative fuels are the long-term solution to reduce emissions from aviation, but incentives are needed to scale them up, an official from the International Air Transport Association (IATA) told EURACTIV.com.

“A lot of airlines are aware of the fact that this is the long-term solution,” Yue Huang from IATA told EURACTIV on the sidelines of the UN climate summit in Madrid.

But low-carbon fuels are still too expensive, she added, saying this is the main reason why airlines prefer using kerosene, which is currently two to five times cheaper than a greener alternative.

“We do need policy incentives from the government side and the fuel producers,” Huang said, citing credit multipliers under the EU’s Renewable Energy Directive as a possible option.

Multipliers are incentives designed to virtually inflate the contribution of certain renewable energies when used in sectors like transport. They were inserted in the EU’s renewable energy directive as an incentive to boost green fuels and meet the goals set out in the directive.

Jet fuels made from renewables and other low-carbon fuels complying with sustainability criteria benefit from a multiplier of 1.2 under the directive in order to incentivise green alternatives to kerosene.

“This is the sort of measures we are looking for,” Huang said.

The EU’s renewables directive is one of the rare incentive schemes for renewable aviation fuels currently in place in Europe.

But incentives alone are not enough to bring sustainable aviation fuels and kerosene on par. IATA says the entire market has to be reshaped in order to attract more investments and bring additional feedstocks in order to scale up production of renewable aviation fuels.

MEP: Clean technology mix needed to decarbonise transport

Decarbonising transport is an enormous challenge and there will be a need to deploy a mix of clean technologies to accelerate the transition to a sustainable system, MEP Seán Kelly told EURACTIV.com.

Market-based measures

Aviation accounts for approximately 2.1 % of global CO2 emissions – roughly equivalent to Germany’s total emissions – making aviation a key sector to reach UN climate goals set out in the Paris Agreement.

More than 99% of airline emissions and approximately 50% of airport emissions are related to the combustion of jet fuel. The airline sector has committed to reducing by 2050 aviation’s net CO2 emissions to 50% of what they were in 2005.

It is however likely that the last drop of fossil fuel used in transport will be put in an aircraft. The transition to renewable energy sources is indeed slower in aviation than in other sectors because of the massive size and weight of passenger aircraft.

At international level, the International Civil Aviation Organisation (ICAO), a UN body, has called for capping emissions to a certain extent. That was decided in the now famous resolution A39-3, adopted at the ICAO general assembly held in 2016.

ICAO members agreed on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) that recognises the role of alternative fuels in dealing with growth in CO2 emission from international aviation.

Under this scheme, each airline must compensate for emissions above its baseline with emission reductions achieved elsewhere through sustainable fuels or carbon credit issuance in the context of carbon markets like the EU emissions trading system (ETS).

The global offsetting scheme is due to come into full effect at the end of the next decade. The preparation phase, which is still underway, is meant to set the stage for CORSIA by defining baselines for airline emissions against which they will be measured.

Both pilot phase starting in 2021 and the first phase starting in 2024 will be on a voluntary basis, while from 2027 onwards, the scheme will be mandatory for 161 ICAO member states.

More than 80% of growth in air traffic CO2 after 2020 is expected to be offset through the gradual introduction of new technologies and sustainable alternative fuels facilitated by CORSIA.

In October, a new ICAO resolution indicated that CORSIA should be the only global market-based measure applied to international flights.

The Emissions Trading Scheme (ETS) already includes intra-EU flights but the option to include all plane journeys could be jeopardised by the principles of CORSIA.

UN agency vote complicates EU’s aviation emission efforts

The International Civil Aviation Organisation (ICAO), a United Nations agency, decided on Friday (4 October) to press ahead with plans to make its emissions offsetting scheme the only global option available to its 193 member states, teeing up a dilemma regarding the EU’s own system.

How to finance it?

Making sustainable fuels cheaper remains the main hurdle, although prices have tended to go downwards.

“If you look at when the first demonstration batches of clean aviation fuel were produced, the price has declined and that’s important,” said Robert Boyd, another IATA official,  who spoke in Brussels recently.

According to him, policy approaches to encourage alternative fuels range from obligations – the “stick approach” – to positive incentives.

Among the positive incentives, he mentioned the Low Carbon Fuel Standard (LCFS) in California, a carbon intensity program to reduce GHG emissions by at least 10% by 2020 which applies to any transport fuel sold, supplied or offered for sale in California.

The Californian technology-neutral market tool is on a voluntary basis for the aviation sector, but airlines that decide to opt in are essentially receiving the same benefit as road transport.

At the regional level, in particular, there is a lack of incentives, said Stig Hvoslef, who is responsible for regional transport at the Akershus county council in Norway.

“We adopted a year ago very ambitious goals to reduce the rate of GHG emissions from transport by 50-55%,” he said, adding that the focus however has been mostly on ground transport.

The plan does not deal with airport emissions, however, “because we have no incentives” for that, he explained.

“But sooner or later, passengers will need to pay a bit more to decarbonise aviation. That’s not going to be for free,” warned César Velarde, who is the rapporteur for the Aviation Fuel Task Force at the ICAO.

The challenge, according to ICAO, is to incorporate the cost of decarbonising aviation without destroying the benefits that aviation brings in terms of tourism and economic development.

Nine EU countries urge new Commission to tax aviation more

A coalition made up of Belgium, Bulgaria, Denmark, France, Germany, Italy, Luxembourg, the Netherlands and Sweden urged the next European Commission on Thursday (7 November) to propose new measures on aviation pricing.

[Edited by Frédéric Simon / Zoran Radosavljevic]

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