Eurocontrol Sees CO2 Measures Costing €29 billion by 2030

 - May 13, 2022, 9:47 AM

Eurocontrol has published its 16th in a series of so-called think papers, in this case assessing how cutting emissions by 55 percent in 2030 compared with 1990 levels would affect European aviation in practical terms. According to the report, the extra cost to the airline industry from measures meant to reach that target could reach €29 billion by 2030.

Eurocontrol’s analysis aligns with the planned policy proposals associated with the EU Green Deal and other initiatives from across Europe. It bases its estimates on the three traffic scenarios—high, base, and low—published in the recent Eurocontrol Aviation Outlook 2050.

The paper demonstrates the industry could achieve a 55 percent reduction in CO2 emissions by 2030 in all three scenarios, but its success relies heavily on market-based measures, mainly via the EU Emissions Trading System (ETS), which would contribute 83 percent to the net reduction.

On the policy side, the paper assesses the effect and the extra cost of sustainable aviation fuel (SAF) uptake, the effect of increasing kerosene taxes, and the phaseout of free emissions allowances. The paper estimates that the cumulative extra cost of the decarbonization measures to the aviation industry over the period from 2022 to 2030 would amount to €62 billion. The total consists of €29 billion in extra tax costs on kerosene (applied to intra-EEA flights), €23 billion in extra ETS costs (applied to EU, UK, and Switzerland), and €10 billion in extra fuel mix costs (applied to all-European Civil Aviation Conference states based on a 5 percent SAF/95 percent kerosene mix).

However, Eurocontrol finds that industry-driven measures can play a major part in achieving the required net emissions savings and offset the extra costs of decarbonization. The positive effect of measures such as the implementation of the Single European Sky, other operational improvements, and accelerated fleet renewal could drastically reduce the extra cost by €33 billion over the same period, lowering the cumulative cost to the industry to €29 billion, said the paper.

“This is a challenging time for the European aviation industry, but the pathway to decarbonization is attainable: Aviation can cut CO2 emissions by 55 percent by 2030 compared to 1990 levels,” said Eurocontrol director general Eamonn Brennan. “However, its success will rely very heavily on market-based measures. While implementing policy decarbonization measures will create significant extra costs for airlines, improvements led by the aviation industry are capable of bringing the extra cumulative costs significantly down from €62 billion to €29 billion by 2030.”

Earlier this week, the Climate Change Committee published a new report seeking to influence the UK government to set more ambitious carbon reduction targets and requirements for the aviation sector in its Sixth Carbon Budget covering the years 2033-2037. The publication provides a detailed breakdown of the industry performance in the net-zero stakes so far and considers options for more progress covering demand management, more efficient new aircraft, and increased adoption of SAF.

Pointing to modeling conducted by Britain’s Department for Transport, the report points out that the government does not appear to envision electric, hybrid, and hydrogen-electric propulsion being a significant part of the commercial aviation mix before 2050. “Combined, these range, aircraft class, and development timings meant that 2050 penetrations of these options are likely to be limited, or they could occupy small niches by 2050, although neither is likely to significantly improve the overall UK emissions profile,” concluded the Climate Change Committee. “Long haul flights dominate UK aviation emissions and are likely to stay using a hydrocarbon fuel until 2050, or beyond, hence the need for SAF.”