The European Green Deal: what does this mean for the aviation industry?

30 maart 2020

On the 11th of December 2019, the European Commission (EC) published the ‘European Green Deal’. This deal aims to transform the European Union into the first climate neutral, circular and material efficient continent by 2050. On the 4th of March 2020 the EC made this a regulatory capture through a ‘climate law’, focussing on a fully sustainable operating European Union. All beautiful words, but what will this set in motion for the aviation industry? And does the deal go far enough?

Problem statement
Annually, the aviation industry accounts for about 3 percent of the EU’s CO2 emissions and for more than 2 percent worldwide. In 2020, the aviation emissions tend to be around 70 percent higher than in the year 2005, but the more alarming forecast is that this will grow to 300-700 percent in 2050. All the more reason the EC has set strategic targets and put them into action. This requires collaboration from all facets of the industry.

Strategical targets…
One of the actions the EC wants to act on in the Green Deal, is the reduction of emissions caused by the aviation industry. How? Through _“the implementation of the Single European Sky (SES), the implementation of CORSIA and the improvement of air quality at and around European airports”_, they state amongst others.

For the aviation industry, the EC is sharpening the emission rights within the European Trading System (ETS), which is related to the implementation of ICAO’s global CORSIA programme (Carbon Offsetting and Reduction Scheme for International Aviation). The ETS is a cap and trade system, meaning that the EC has set a maximum amount of emissions, which are subsequently auctioned off to airlines. High emitters can eventually trade emissions with low emitters. Airlines have to monitor, report and verify their emissions and pay allowances against those emissions according to the rules of the ETS. Every year, the amount of available emissions reduces by 1,74% with a steeper reduction of 2,2% starting in 2021. As such, airlines are stimulated – or forced – to innovate to produce more sustainable flights if they want to operate at least the same number of flights as they do currently.

The EC expects that 80% of the emissions above 2020 levels will be offset by 2035. Why not 100%? That is because the first phase of the programme is voluntary for ICAO states. All EU states will join the scheme from the start, however. Only from 2027, all ICAO’s member states will have mandatory participation.

The CORSIA programme on the other hand, further stimulates sustainability within the aviation industry, by making the airlines monitor emissions on all routes (not just intra-EU) and making them offset these emissions by purchasing eligible emissions units generated by projects reducing emissions in other sectors. An example would be to invest in renewable energy projects. For the CORSIA programme, aircraft operators that undertake international flights will have to monitor, report and verify the CO2 emissions from those flights started in January 2019. With this data, the baseline for CORSIA can be set, namely the average of 2019 and 2020 emissions. That baseline represents the sector’s offsetting requirements for the year 2021. If the baseline will be exceeded, that level will represent the sector’s offsetting requirements for that year.

… put into action

  • Implementation of Single European Sky

The EC states that it will need to restart the proposal on the Single European Sky programme, as this will help achieve a significant reduction in aviation emissions. The implementation of SES would result in a CO2 emission reduction of 10 percent on a yearly basis according to calculations by Airline for Europe. The programme should be completed between 2030 and 2035. Besides the latter, not much else is stated regarding the Green Deal.

  • Improving air quality

The EC has stated that in order to get the air quality to ‘zero pollution’, an action plan will be launched in 2021. Besides this, they want to make sure that the air quality standards must be conform to the World Health Organisation’s recommendations, standards and measures. More attention needs to be given to the effects of the air quality on health and living standards. For aviation, air quality should be improved near airports, by tackling the emissions of aircraft operators and airport operations.

  • Make sustainable aviation fuels mandatory

The Dutch government recently confirmed a mandatory blending-in of sustainable aviation fuels (SAF). This will preferably be a European obligation and not just nationally. Either way, the Dutch government wants to make sure that the blending-in is mandatory by 2023 at its latest. By 2030, at least 14 percent of the fuels used, must be SAF and by 2050 all fossil fuels must be replaced by sustainable alternatives.

What about electrification of aviation?
Besides stating that the operations on airports need to be less polluting by e.g. transforming operations from fossil fuelled to electric, nothing much is said about the future of electric aviation. IATA’s Director General and CEO Alexandre de Juniac stated the following: “Electrification of road vehicles is tried, tested, scalable and on the market today. Aviation should be a policy priority, because it does not have a near-term electrification option”. And that seems to be true, as the Green Deal does not mention any concrete actions on electric operated aviation. In the Netherlands, however, a first concrete plan has been made to make the aviation industry more sustainable and become one of the leaders in hybrid electric flying in 2030. The focus of this plan is divided into three pillars: ground operations, general aviation and commercial aviation. The next action for the Dutch government is to present this plan to the other States.

It is more than clear that we need to protect the world we live in and that the aviation industry must join these efforts. So will this Green Deal make a difference, if any? Will offsetting CO2 emissions by investing in green projects on the other side of the globe actually stimulate the aviation sector to become more efficient and innovative? Will it make aviation move to the EU’s desired goal of ‘becoming a climate neutral continent’? To be honest, it does not sound far reaching enough. In line with the Dutch government, we think more stringent targets need to be set. Sure, the Green Deal might give the push to get the ball rolling in the world of legislative stimulation. But will this be enough, as the pressure for a more environmentally friendly aviation industry is becoming more prominent and demand action? Moreover, how should key emitters with large numbers of domestic flights like the USA, India and China be stimulated to innovate and become more sustainable as, for now, the CORSIA rules apply to international flights only?

Once – and hopefully soon – the Corona crisis is over, it will only be a matter of time before the industry will be back in action, bringing back the environmental challenges it has to address.

What do you think?
We would love to hear your thought! Which actions do you think should be taken to reach these goals? What needs to be more concrete? Or do you think the actions above will actually be enough to become climate neutral in 2050? Will the Corona crisis bring any innovation or substantial changes about for the industry?

Schrijf je in voor onze blog updates