Aviation Sustainability and the Environment, CAPA 15-Jul-2021

This CAPA report features a summary of recent aviation sustainability and environment news, selected from the 300+ news alerts published daily by CAPA. For more information, please contact us.

European Commission adopts package of proposals to reduce emissions

European Commission adopted (14-Jul-2021) a package of proposals to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Proposals related to the aviation industry include:

• Phase out free emission allowances for aviation and align with the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA);
• Remove the mandatory fuel tax exemption for fuel used on intra-EU flights, but exempt cargo-only flights from fuel tax;
• Introduce minimum tax rates applicable to aviation fuels used on intra-EU flights to stimulate the use of more sustainable aviation fuels and encourage airlines to use more efficient and less polluting aircraft;
• Proposed tax rates on aviation fuel will increase gradually over a ten year period to reach a minimum rate of EUR10.75/GJ EU-wide;
• Sustainable and alternative aviation fuels will benefit from a zero minimum tax rate;
• Revise the ETS aviation rules to strengthen the price signal incentivising costs effective aviation emission reductions and help ensure that the sector accelerates its decarbonisation and contributes its fair share to the EU's climate objectives;
• ETS allowances allocated to airlines for free will be phased out over time;
• Alternative Fuels Infrastructure Regulation will require that aircraft have access to clean electricity supply at major airports;
• ReFuelEU Aviation Initiative will oblige fuel suppliers to blend increasing levels of sustainable aviation fuels in jet fuel taken o-board at EU airports, including synthetic low carbon fuels;
• Alternative Fuel Infrastructure Regulation introduces the obligation to provide electricity supply to all stationary aircraft in TEN-T core and comprehensive network airports instead of jet fuel. This obligation will apply to all gates, as of 2025, and to all outfield posts, as of 2030. In addition, by no later than 2030 Member States will need to ensure that all electricity supplied to stationary aircraft comes directly from the electricity grid or from on-site generated renewable energy;
• Airlines will be obliged to uplift SAF-blended aviation fuel when departing from EU airports;
• ReFuelEU obliges fuel suppliers to include more SAF into jet fuel from 2030 to 2050:
  • 2% by 2025;
  • 5% by 2030;
  • 20% by 2035;
  • 32% by 2040;
  • 38% by 2045;
  • 63% by 2050. [more - original PR]

Excerpt from original report: European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions

Today, the European Commission adopted a package of proposals to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Achieving these emission reductions in the next decade is crucial to Europe becoming the world's first climate-neutral continent by 2050 and making the European Green Deal a reality. With today's proposals, the Commission is presenting the legislative tools to deliver on the targets agreed in the European Climate Law and fundamentally transform our economy and society for a fair, green and prosperous future.

A comprehensive and interconnected set of proposals

Today's proposals will enable the necessary acceleration of greenhouse gas emission reductions in the next decade. They combine: application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System; increased use of renewable energy; greater energy efficiency; a faster roll-out of low emission transport modes and the infrastructure and fuels to support them; an alignment of taxation policies with the European Green Deal objectives; measures to prevent carbon leakage; and tools to preserve and grow our natural carbon sinks.

IATA: EU reliance on taxation for cutting aviation emissions is counter productive

IATA stated (14-Jul-2021) "the reliance on taxation as the solution for cutting aviation emissions in the EU's 'Fit for 55' proposal is counter-productive to the goal of sustainable aviation".

The association said EU policy needs to support practical emission reduction measures, such as incentives for sustainable aviation fuels (SAF) and the modernisation of air traffic management.

IATA stated aviation decarbonisation requires a combination of measures, including:

• Sustainable aviation fuels;
• Market based measures to manage emissions until technology solutions are fully developed;
• Modernising European air traffic management through the Single European Sky initiative;
• Support for "radical" new technologies, such as electric and hydrogen propulsion.

IATA director general Willie Walsh stated: "Aviation is committed to decarbonisation as a global industry. We don't need persuading, or punitive measures like taxes to motivate change. 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 SAF and delivering the Single European Sky". [more - original PR]

Original report: Tax is not the Answer to Aviation Sustainability

The International Air Transport Association (IATA) warned that the reliance on taxation as the solution for cutting aviation emissions in the EU's 'Fit for 55' proposal is counter-productive to the goal of sustainable aviation. EU policy needs to support practical emission reduction measures such as incentives for Sustainable Aviation Fuels (SAF) 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. 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 SAF and delivering the Single European Sky," said Willie Walsh, IATA's Director General.

Comprehensive Approach

Achieving aviation decarbonization requires a combination of measures. These include:

• Sustainable Aviation Fuels which reduce emissions by up to 80% compared to traditional jet fuel. Insufficient supply and high prices have limited airline uptake to 120 million litres in 2021-a small fraction of the 350 billion litres that airlines would consume in a 'normal' year.
• Market-based measures to manage emissions until technology solutions are fully developed. The industry supports the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) as a global measure for all international aviation. It avoids creating a patchwork of uncoordinated national or regional measures such as the EU Emissions Trading Scheme, that can undermine international cooperation. Overlapping schemes can lead to the same emissions being paid for more than once. IATA is extremely concerned by the Commission's proposal that European States would no longer implement CORSIA on all international flights.
• Single European Sky (SES) to reduce unnecessary emissions from fragmented air traffic management (ATM) and resulting inefficiencies. Modernizing European ATM through the SES initiative would cut Europe's aviation emissions between 6-10%, but national governments continue to delay implementation.
• Radical new clean technologies. While it is unlikely that electric or hydrogen propulsion could have a significant impact on aviation emissions within the EU 'Fit for 55' timeframe of 2030, the development of these technologies is ongoing and needs to be supported.

"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. 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," said Walsh.

Promoting SAF

The most practical near-term solution to reducing emissions is SAF. Energy transitions are successful when production incentives drive down the price of alternative fuels while driving supplies up. The EU 'Fit for 55' proposal does not include direct measures that will achieve this. Without specific measures to reduce SAF costs, it does, however, propose a mandate to increase SAF utilization to 2% of jet fuel use by 2025 and at least 5% by 2030.

"Making SAF cheaper will accelerate aviation's energy transition and improve Europe's competitiveness as a green economy. But making jet fuel more expensive through taxation scores an 'own goal' on competitiveness that does little to accelerate the commercialization of SAF," said Walsh.

Mandating a gradual transition to SAF is a less efficient policy compared to comprehensive production incentives, but it may contribute to making SAF more affordable and widely available in Europe, but only under the following key conditions:

• It is accompanied by policy measures to ensure a competitive market and appropriate production incentives. The mandated use of SAF must not allow energy companies to engage in uncompetitive practices with the resulting high costs being borne by airlines and passengers.
• It is targeted at locations which have substantial airline operations and close proximity to SAF refineries.

Concrete actions on Single European Sky are urgently needed

The SES has been on the drawing board for 20 years but has made little progress despite the promise of a 6-10% improvement in environmental performance, safer operations and reduced delays.

"Europe's national politicians are quick to lecture airlines on the efforts industry should be making on the environment. But they are silent when it comes to areas of their own responsibility. Just recently the European Council failed to show any leadership to cut emissions by harmonizing European air traffic management. Moreover, the constant absence of political support from states on the SES proposals undermines the credibility of the 'Fit for 55' proposal and the credibility of Europe's determination to drive real solutions for sustainability," said Walsh.

Boeing and SkyNRG partner to expand SAF use worldwide

Boeing, SkyNRG and SkyNRG Americas announced (14-Jul-2021) a partnership focused on scaling the availability and use of sustainable aviation fuels (SAF) globally.

Boeing will also invest in SkyNRG Americas' SAF production project, including the advance purchase of SAF for use in flight tests and other operations.

The parties will work to accelerate SAF development globally, focusing on scaling production capacity, building awareness and engaging stakeholders throughout the value chain.

Boeing chief sustainability officer Chris Raymond commented: "Sustainable aviation fuels are safe, proven and offer the greatest potential to reduce our industry's carbon emissions in the near, medium and long term". [more - original PR]

Original report: Boeing and SkyNRG Partner to Scale Sustainable Aviation Fuels Globally

Boeing and SkyNRG Partner to Scale Sustainable Aviation Fuels Globally

- Partnership builds on Boeing's industry leadership and SkyNRG's pioneering approach to scaling SAF demand and supply

- Boeing to invest in SkyNRG Americas' first dedicated U.S. production facility for SAF

- Facility will establish SAF supply for airports, airlines, Boeing operations on West Coast

Boeing (NYSE: BA), SkyNRG and SkyNRG Americas today announced a partnership focused on scaling the availability and use of sustainable aviation fuels (SAF) globally. Boeing will also invest in SkyNRG Americas' SAF production project, for which Alaska Airlines is a previously announced partner.

"Sustainable aviation fuels are safe, proven and offer the greatest potential to reduce our industry's carbon emissions in the near, medium and long term," said Boeing Chief Sustainability Officer Chris Raymond. "This partnership is an important milestone on our journey to decarbonize aerospace, while ensuring that its societal and economic benefits are available to people everywhere."

Boeing, SkyNRG and SkyNRG Americas will work together to accelerate SAF development globally, focusing on scaling production capacity, building awareness and engaging stakeholders throughout the value chain, including airlines, governments and environmental organizations.

"We are extremely proud to take the longstanding Boeing-SkyNRG relationship to this new level. We have always been strong collaborators and through this teaming effort, we're strengthening our relationship even further," said Maarten van Dijk, Managing Director of SkyNRG.

As a leader in the SAF industry, SkyNRG sources and supplies SAF, develops production capacity, advises on policy decisions, manages corporate SAF programs and takes the high road on sustainability. SkyNRG Americas is a new company focused on growing SAF production in North America. Its first dedicated U.S. production facility for SAF will supply airports and airlines on the West Coast. Boeing's investment in the project includes the advance purchase of SAF from this facility for use in company flight tests and other operations.

"We are thrilled to be in this partnership with Boeing and grateful for their leadership by providing an advance payment for SAF from our first facility. With this teaming agreement, SkyNRG Americas will be able to accelerate our efforts to expand the SAF industry throughout North America," said John Plaza, CEO of SkyNRG Americas.

The partnership builds on Boeing's long-term industry leadership and investment in SAF. The company began SAF test flights in 2008 and helped gain approval for commercial use in 2011. The Boeing ecoDemonstrator uses SAF for all flight test programs and completed the world's first commercial airplane flight using 100% SAF in 2018. Earlier this year, Boeing committed that its commercial airplanes will be capable and certified to fly on 100% SAF by 2030.

"Our industry will need a strong, reliable supply of SAF to address climate change and drive adoption," said Raymond. "We aspire to partner and help create that supply."

Air Nostrum signs LoI with Universal Hydrogen to purchase turboprop conversion kits

Iberia Regional Air Nostrum signed (14-Jul-2021) an LoI with Universal Hydrogen to purchase 11 Universal Hydrogen turboprop conversion kits for use across its existing and future fleet.

The kits contain a hydrogen fuel cell and electric motor to replace the aircraft's turboprop engine and make aircraft compatible with Universal Hydrogen's modular hydrogen capsule technology, which supports the delivery of hydrogen to any airport without requiring purpose built infrastructure.

Under the LoI, Universal Hydrogen will be Air Nostrum's long term green hydrogen service provider.

Air Nostrum CEO Carlos Bertomeu stated the partnership "represents a unique opportunity to advance on the decarbonization of our flight operations with the practical and cost-effective application of green hydrogen fuel". [more - original PR] [more - original PR - Spanish - II]

Original report: Universal Hydrogen and Air Nostrum Sign LOI for Hydrogen-Powered Turboprops

Universal Hydrogen and Air Nostrum Sign LOI for Hydrogen-Powered Turboprops

Universal Hydrogen, the company fueling carbon-free flight, today announced it has signed a letter of intent (LOI) with Air Nostrum, a leading regional airline based in Valencia, Spain. This LOI furthers Air Nostrum's initiative to provide its customers with environmentally-friendly flight options and reduce aviation's contribution to global carbon emissions.

Under the agreement, Air Nostrum would purchase eleven of Universal Hydrogen's turboprop conversion kits for use across its existing and future fleet. These kits encompass a hydrogen fuel cell and electric motor that replaces the aircraft's existing turboprop engine. They also provide for compatibility with Universal Hydrogen's modular hydrogen capsule technology that allows for the delivery of hydrogen to any airport without any purpose-built infrastructure. Alongside the aircraft conversions, Universal Hydrogen would become Air Nostrum's long-term green hydrogen service provider. The conversion of Air Nostrum's turboprop fleet to a Universal Hydrogen-powered, zero-carbon configuration would be concluded after an operational evaluation of the design and performance. The aircraft are expected to have equivalent or better unit economics compared to the existing fleet.

"We are thrilled by this flagship partnership with Air Nostrum to help decarbonize their fleet," said Paul Eremenko, co-founder and CEO of Universal Hydrogen. "This bold step puts them in the vanguard of European regional airlines in taking meaningful action to reach true zero emissions."

Over the past two decades, Air Nostrum has consistently prioritized environmental responsibility by reducing single-use plastics from in-flight services, separation of waste on its premises and on-board, and planting trees to offset their paper consumption. Universal Hydrogen's carbon-free aviation solutions will significantly advance Air Nostrum's sustainability goals while also providing operational efficiencies.

"Each day, our airline explores innovative solutions to provide a travel experience with minimal adverse impact on the environment," says Carlos Bertomeu, President and CEO of Air Nostrum. "This partnership represents a unique opportunity to advance on the decarbonization of our flight operations with the practical and cost-effective application of green hydrogen fuel."

CAPA chairman emeritus: Expect pressure on business travel buyers to reduce carbon footprint

CAPA - Centre for Aviation chairman emeritus Peter Harbison, speaking at CAPA Live July 2021, stated (15-Jul-2021) "corporate buyers are going to be under major investor pressure to reduce their carbon footprint from business travel" in the coming years, which will likely particularly impact long haul international services because business travel "does help to underwrite long haul services in a big way".

Mr Harbison expects "there's going to be much stronger popular and political direct pressure [on airlines] to reduce emissions" in the near future, noting "there are going to be carbon taxes, in one form or another. Whether they're global, whether they're regional, whether they're national, there will be carbon taxes".

He acknowledged that airlines are "actively trying to produce [sustainable aviation fuels] SAFs" to address this, but noted SAFs "at this stage, [represent] a very tiny proportion of fuels used and really don't look to have a major impact on reducing emissions until probably 2030 and beyond".