The future of commercial air travel is now as the EU introduces new law to cut aviation emissions.

All aircraft departing from EU airports will very soon be required to refuel using an at least 2% sustainable aviation fuels (SAF) blend. The new law passed by the EU Commission on 26 April requires formal adoption by the Parliament and the Council.

The new rules will require:

1) Aviation fuel suppliers to supply a minimum share of SAF at EU airports, starting at 2% of overall fuel supplied by 2025 and reaching 70% by 2050. The new EU jet fuel blend will need to also contain a minimum share of the most modern and environmentally-friendly synthetic fuels, which increases over time;

2) Aircraft operators departing from EU airports to refuel only with the fuel necessary for the flight, to avoid emissions related to extra weight or carbon leakage caused by ‘tankering' practices (deliberately carrying excess fuel to avoid refuelling with SAF);

3) Airports to ensure that their fuelling infrastructure is available and fit for SAF distribution.

Key takeaways

• Broader impact:  The EU SAF mandate is likely to be broader in scope than the current EU ETS scheme, as it applies to all flights departing from EU airports. The current EU ETS scheme applies only to flights within the European Economic Area (EEA), as well as flights to Switzerland and the UK. This means that the EU SAF mandate will capture long haul flights that are currently not subject to the EU ETS scheme.
• Energy security: The EU Commission cites energy security as one of the reasons for the implementation of the SAF mandate, but where does all the feedstock for SAF come from at the moment? Will this spark a race of regulations to prevent or tax feedstock exports and imports around the world in a manner similar to what is happening with batteries (as analysed here)?
• Who will bear the cost?: Some airlines have already announced price increases in their passenger tickets to cope with the costs, from €1 - 8 in economy to €1.50 - 24 in business, depending on the distance travelled.

Cost of non-compliance

Fines are to be implemented and announced by individual EU member states from the end of 2023.

Based on the proposal, guidelines for such fines are:

• Airlines: at least twice as high as yearly average price of conventional jet fuel, multiplied by the quantity of SAF that has not been tanked. Based on current jet fuel price of approximately USD 750/mt, this fine is potentially USD $1500/mt of non-tanked SAF.
• Aviation fuel supplier: at least twice the difference between yearly average price of conventional jet fuel and SAF, times the amount of SAF needed to meet the target. Based on current prices, cost of non-compliance has been estimated by some fuel suppliers as much as  €1,000 per tonne of fuel for advanced bio and €6,000 per tonne of fuel for synthetic fuel mandates.