Flights more expensive up to 50% for the use of biofuels imposed by the EU – Corriere.it

Without public incentives for the sector, the law on green fuels for aviation (ReFuelEu) is set to raise the cost of air tickets in Europe as early as 2025 and up to 30 euros each way from 2035 (keeping flight prices fixed). For a market like Italy — where last year the average fare for a one-way national/European flight was 60.6 euros — that would mean a 50% increase. Net of all other possible price increases: inflation, the increase in the cost of kerosene, an international crisis. Not to mention the other environmental policies – such as taxes on fossil fuels and carbon dioxide emissions – which risk further increasing the cost of flights for Europeans, as recently told by the Courier.

The reduction of emissions

In recent days, the European Council adopted the legislative acts which will allow – in the plans – to reduce greenhouse gas emissions by 55% in 2030 until reaching climate neutrality in 2050. Within this package there are some rules which impose airlines to use more biofuel (with progressive quotas every five years) and from 2027 they will remove the CO2 quotas that the companies will be able to issue for free, thus forcing them to pay for each ton (over 90 euros according to the latest quotations).

The new EU rules

ReFuelEU establishes that from 2025 all flights departing from an airport in the European Union will be obliged to use a minimum share of sustainable aviation fuel (Saf): 2% in two years, 6% in 2030, 20% in 2035 , 34% in 2040, 42% in 2045 and 70% in 2050. Within this mandatory quota, however, the EU has decided to also include the presence of synthetic fuels (e-kerosene): 1.2 % in 2030, 5% in 2035 and 35% in 2050. The Saf can cut emissions by 60-80%. European representatives must contribute to the construction of an industry capable of producing SAF for the aeronautical sector, said Laurent Donceel, the head of the association which brings together some of the main airlines of the continent Airlines for Europe.

Costs

All this, however, involves an additional expense. If a ton of classic kerosene costs around 760 euros today, a ton of Saf is around 3,200 euros, while e-kerosene is valued at around 3,800. To give an example: in 2022 the Lufthansa group companies burned 5.76 million tons of kerosene for passenger transport alone. At market values, the purchase cost would be 4.4 billion euro. But by applying the Saf and e-kerosene quotas imposed for 2030, the expenditure would rise to 6.1 billion, an increase of 38%.

Little production

Today the use of biofuel is limited because the quantity is small. In 2021, 100 million liters of “Saf” were produced, said Hemant Mistry, Iata’s director for Energy Transition recently. Equal to 0.04% of the fuel needed by airlines. In 2022, production rose to a range between 300 and 450 million litres. But it has always been 0.1-0.15% of the fuel required by the carriers. In 2030, Iata estimates, the market will need 100 billion liters of Saf, but at least 30 billion liters would be needed to reach a satisfactory first level.

Price evolution

Experts believe that the increase in the production of Saf will lead to a reduction in the price in the coming years. But they also expect the airlines to offload excess spending on airline tickets: the latest estimates bring the increase to 30 euros in 2035, gradually rising to 50-60 euros on short and medium-sized flights. A figure that Matteo Mirolo, head of the Transport & Environment aviation sector, considers excessive. We think the increase will be a couple of euros per passenger, he explains Courier on the phone and welcomes the European initiative on reducing emissions.

Agreements and incentives

Several European carriers have signed commercial agreements for the supply of Saf also for the next few years. And there are those who are also introducing incentive packages: Sea, the management company of the Milan airports (Malpensa and Linate), has announced its economic support program for companies that will use biofuels during 2023. The contribution of 500 euros for each ton of pure Saf purchased in the two airports (the total fund of 450 thousand euros): DHL, Ita Airways, Volotea and Cargolux – Sea reports – are just some of the airlines that responded to the tender.

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