Industry wants SAF carbon allowance boost

The aviation industry today called for a new additional supporting mechanism under the EU's emissions trading system (ETS) allowing aircraft operators to gain carbon reductions from uplifting sustainable aviation fuels (SAFs).

The call was made ahead of an expected European Parliament vote on 18 May on legislative proposals to reform the ETS. Firms signing up include Neste, Siemens Energy, Norsk e-Fuel and Lanzatech as well as Airlines for Europe (A4E), airports, and aviation and aerospace manufacturers.

The group wants a new supporting mechanism under the EU ETS allowing aircraft operators to receive carbon allowances equal to overall CO2 reduced by SAF uplifting, suggesting a rate equal to CO2 save for SAFs from biofuel, but with a 200pc multiplier for advanced biofuels and synthetic fuels including hydrogen. The ETS tweak, they argue, would provide additional incentives for airline decarbonisation via SAFs over and above the mandated minimum blend. It would provide further bridging in terms of the current price gap with conventional jet fuel.

"The scheme creates an incentivising pricing system respecting the integrity of the EU single market, benefiting people across the EU, unlike many ad hoc national programmes or targeted funds," said Laurent Donceel, senior policy director at A4E.

Donceel sees increasing support in parliament, which will hold crucial votes next week on aviation in the ETS. EU member states too are showing growing interest. Once both parliament and EU states have reached their own formal positions, talks can begin on a final legislative text.

The EU proposed a SAF blending mandate last year whereby aircraft landing at EU airports must uplift blended jet fuel with a mandated SAF share of 2pc by 2025, 5pc by 2030, 20pc by 2035, 32pc by 2040 and 63pc by 2050.

The latest market outlook published by SAF producer SkyNRG indicates that some 4.7mn t of SAF will be needed by 2030 to meet the aggregate EU and UK demand with mandates.

By Dafydd ab Iago