EU seeks to boost demand for green jet fuels

The European Union has approved rules about the sustainability of jet fuels as part of its ‘Fit for 55’ package. This coincides with moves by renewables firms and the aviation sector to boost production of sustainable fuels.


October 17, 2023

  • Masdar is developing green jet fuels with Airbus and Boeing
  • Lufthansa CEO has warned about the viability of EU targets
  • The EU is aiming for 70% sustainable aviation fuels by 2050

Before this article takes off, please familiarise yourself with the important notice: the most environmentally-friendly flight is the one you don’t take. Thank you.

We couldn’t start an article about sustainable aviation fuels without addressing that elephant in the cockpit. But leaving aside the question about the ethics of flying, the fact is that millions of flights take off each year: 27.9million in 2022 according to the International Air Transport Association, and 38.9million in 2019 before Covid-19.

Aviation giants are now partnering with renewable energy operators to explore how they can be more sustainable. This month, Middle Eastern firm Masdar revealed it is partnering with aerospace firm Boeing to advance the development of sustainable jet fuels, including working on accounting mechanisms. This deal follows a similar agreement that Masdar announced with aviation firm Airbus in May, where the pair agreed to collaborate on producing sustainable aviation fuels and green hydrogen.

It is not just renewables specialists that are sharing their nous. This month, Middle Eastern airline operator Emirates signed a deal with oil giant Shell for sustainable aviation fuels; and Malaysian state energy company Petronas has signed a deal with Japanese petrochemicals firm Idemitsu Kosan to partner on green fuels too.

Not everyone in the aviation industry is convinced that sustainable aviation fuels will make an immediate impact on aviation’s green credentials. For example, Lufthansa chief executive Carsten Spohr told an event in Frankfurt, Germany, last month that greener fuels would increase costs for passengers and expressed scepticism about European Union targets. More on that in a moment. But Spohr said its shareholders are being more demanding about the sustainability of plane fuels.

This should be good news for operators in the power-to-X industry. Demands from shareholders should translate into greater demand for more sustainable jet fuels, and therefore increase demand for green hydrogen and related products. This is positive for operators that have struggled to secure purchase agreements with corporate off-takers for the green fuels they are planning to produce.

However, in Europe, policymakers are looking to wield their influence too.

‘Fit for 55’ package

The European Union last week adopted the final two pillars of its ‘Fit for 55’ package. This is the legislation via which the EU is looking to cut greenhouse gas emissions in its 27 member states by at least 55% by 2030. Those final two pillars relate directly to companies in the renewable energy and sustainable fuel sectors.

Specifically, the EU has adopted changes to its Renewable Energy Directive and ReFuelEU Aviation Regulation. The changes in the ReFuelEU Aviation package set standardised rules for the promotion of sustainable aviation fuels; and set minimum shares of sustainable fuels in the kerosene used in EU airports.

The rules are not just about jet fuels. The FuelEU Maritime Regulation is seeking to boost the uptake of renewable and low-carbon fuels in the shipping sector, by setting out gradual reductions in the average greenhouse gas intensity of these fuels. Other rules in ‘Fit for 55’ concern the mandatory rollout of electric recharging and hydrogen refuelling infrastructure alongside European roads; and targets that all new cars and vans registered in Europe should be zero-emission by 2035.

Yet it is the aviation rules that have attracted the most interest this week.

Specifically, the EU has ruled that at least 2% of jet fuels used at EU airports should be sustainable by 2025, rising to 6% by 2030, 20% by 2035, 34% by 2040, 42% by 2045, and 70% by 2050. It also says that a specific proportion of the fuel mix must be synthetic fuels, such as e-kerosene, by 2050: this starts at 1.2% of the fuel mix in 2030 and rises to 5% by 2035 – and, eventually, 35% in 2050.

Lufthansa’s Spohr has questioned whether these targets are achievable. Even if they are challenging, though, this lays down a challenge for companies in the power-to-X sector to supply fuels at the scale that aviation companies need. This will help boost investment in industries, such as green hydrogen production, where companies are struggling to take projects to financial close, partly because they lack clear off-takers.

Boosting demand for greener fuels in industries that have a clear need for them, and cannot easily be electrified, can only help the power-to-X industry. Greener fuels can help aviation firms be more sustainable even if passenger numbers remain high.

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