EU targets for greener flights at risk amid lack of investment 

In a rare show of unity, environmental organisations and oil companies have both warned that the EU’s targets for green jet fuels are in danger of being missed as investment into the production of synthetic fuels is so far not materialising.

As part of its flagship climate package “Fit for 55”, the EU last year adopted “ReFuelEU aviation”, a law that aims to reduce the climate impact of flights.

The new regulation sets quotas for the use of so-called sustainable aviation fuel (SAF), an increasing share of which will be blended into the kerosene used at EU airports.

The law will take effect in 2025, when 2% of the fuel mix must be from sustainable sources, growing to 20% in 2035 and reaching 70% in 2050.

Among the green fuels used are fuels based on used cooking oil, such as frying fat collected after use and processed. The resulting liquid is considered an “advanced” biofuel, which is eligible for meeting the EU’s SAF targets.

As the availability of such waste materials is limited, targets also include mandates for so-called e-fuels – synthetic fuels produced from hydrogen, which in the long-term are expected to be available at a larger scale.

However, investments into the production of e-fuels are not yet materialising, environmental NGO Transport & Environment (T&E) warned in a report published on Wednesday (24 January).

While there are plans for 25 industry-scale production sites for e-kerosene within the EU, Iceland and Norway, “none of the major projects have reached final investment decision yet,” according to the NGO.

“The road is still long before we actually see e-kerosene in our planes,” Camille Mutrelle, T&E’s expert on green jet fuels, said.

“We need to move from paper to reality and ensure that the e-kerosene projects truly materialise, or else the law will be nothing but empty words,” she added.

Parliament backs law to boost green aviation fuels in EU flights

The European Parliament gave the green light on Wednesday (13 September) to new rules that will increase the quantity of sustainable jet fuel in flights departing from EU airports, marking a major step towards reducing emissions from the notoriously carbon-intensive transport mode.

Additional subsidies needed

Meanwhile, representatives of oil companies warned that despite the EU setting binding targets for the blending of e-kerosene, investments into new production sites would be too big of a risk for many banks without additional subsidies.

“We are not at the technology readiness level […] where we can deploy that on a large industrial scale,” Niels Anspach, vice president for bio and low-carbon fuels at BP Europe, said at an industry conference on Monday (22 January) in Berlin.

“And of course, if you are a bank that wants to provide capital, and you then talk to various [experts] who say that essential components of this technology are not yet available on an industrial scale and nobody knows when this technology will be available on an industrial scale, then of course it is difficult to do so if you do not receive any [state] support,” he added.

Additional subsidies were needed “to close that gap”, Anspach said.

Responding to Anspach’s remarks, Ralph-Uwe Dietrich, engineer at the German Aerospace Center (DLR), said that “the technology is there since decades”, calling it a “mere political statement” to say that technology would not be ready to scale up production.

“The statement that it is not bankable is only true because the quotas are too low,” Dietrich said regarding Germany’s target of 2% synthetic kerosene by 2030, which translates into 200,000 tonnes.

“No bank is interested in these 200,000 tonnes [of e-kerosene]. That’s peanuts,” Dietrich said.

Due to the higher cost of e-kerosene, the EU has mandated only a 1.2% share of such synthetic fuels by 2030, translating into 600,000 tonnes, making it likely that most of the green fuel quota will be fulfilled using cheaper options, such as advanced biofuels from used cooking oil.

“It’s also about market risks,” said Christian Küchen of en2x, an association representing oil majors in Germany. “Because you need not only the demand, that you can get with quotas, but also the price of the investment. And the problem is that a quota does not generate a price,” he added.

Devil in the details to reach the EU’s green jet fuel targets

Europe’s ambitious targets to replace increasing quantities of fossil kerosene with green aviation fuels will be extremely challenging to meet – though with a broad and evolving mix of fuel sources, as well as sustained political and industry support, it is within grasp.

German budget cuts affect funding

The situation could become worse due to the German budget crisis, which has seen the government cut €45 billion from a climate fund following a ruling by the country’s constitutional court.

“The judgement of the Federal Constitutional Court and the resulting cuts unfortunately also affect this package of measures [to scale up production of renewable fuels],” Hartmut Höppner, state secretary at Germany’s transport ministry, told the conference.

A draft supplementary budget tabled by the government would see funding slashed by €74 million in 2024 alone, with even more substantial cuts likely in the following years, according to industry association UNITI.

The remaining funds would sum up to €117 million for renewable fuels production sites, as well as €130 million specifically for research and development of e-fuels for aviation and the maritime sector, Höppner said.

“Despite the difficult budget situation, we want to work together with industry and business to advance the research and production of electricity-based fuels,” Höppner said.

Jane Amilhat, head of the unit for clean transport transitions at the European Commission’s department for research and innovation, warned that the German decision could have repercussions for the entire bloc.

“In terms of the amount that has been cut in Germany, this is certainly a problem for Europe,” she told the conference.

Germany solves budget spat by cutting climate fund and increasing energy taxes

The German government has resolved its internal disagreements on how to deal with a €60 billion hole left in the government’s finances after a ruling by the country’s constitutional court, announcing a mix of expenditure cuts and additional sources of income.

[Edited by Sean Goulding Carroll/Nathalie Weatherald]

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