Reforms to strengthen Europe’s climate change policies could see airlines get up to 2 billion euros in European Union funding to help them switch to sustainable fuels after the European Parliament on Tuesday approved a revamp of the EU carbon market, which would use proceeds from 20 million CO2 permits to compensate airlines that use sustainable fuels.
Under extant CO2 price, that would amount to 1.9 billion euros that can be claimed by airlines from 2024 to 2030 to cover the price difference between fossil fuel-based kerosene and greener fuels, which are currently far more expensive.
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With zero-emission aircraft not expected for over a decade, it makes the aviation sector one of the hardest sectors to decarbonise globally. In the nearer term, sustainable fuel is one of the few options to air travel’s carbon footprint.
However, the EU carbon market reform still needs formal approval from EU countries before it becomes law.
Separately, the EU is also developing binding targets for airlines to increase their use of sustainable fuels.
In the coming years, Airlines will face higher costs for polluting in Europe. The EU will stop giving free CO2 permits to airlines from 2026 as part of the carbon market reforms. This means they will need to buy a permit to cover every tonne of CO2 they emit.
Story was adapted from Reuters.
