An industry chief warned that airline passengers will pay nearly $3 billion (£2.2 billion) a year as the EU and the UK impose net zero targets. [emphasis, links added]
Willie Walsh, CEO of the International Air Transport Association (IATA), said the high costs and poor demand for sustainable aviation fuels (SAF) mean passengers face even higher ticket prices.
Mr Walsh, formerly CEO of British Airways, said he described the net zero rule behind the extra fees as “a big green scam in the EU” Brussels “don’t continue in its proposals” to improve measures that are completely ineffective.
According to IATA, the price of buying SAF will increase by $1.2 billion in 2025 compared to traditional jet fuel.
Most importantly, producers such as Shell and Total will charge airlines $1.7 billion for failing to provide a fine or “compliance fee” to the operator.
This is the amount required for the UK and Brussels after the introduction of the authorization this year.
Mr Walsh said at an industry event in New Delhi:
“The EU authorization did nothing to stimulate additional production and increased costs for fuel suppliers a lot, thus increasing airline costs.
“SAF is not available yet, but fuel suppliers don’t care. They will be fined, but they just pass the cost to the airline.
“It’s anger, and suppliers are charging airlines compliance fees twice the market premium compared to conventional jet fuel, a surprise gain of over $100 million.
“People would say these tasks are positive because they stimulate production. We see no evidence. Consumers pay more at the end of the day.”
Mr. Walsh no longer said that the goal of reaching zero emissions by 2050 is impossible. But, he warned Without increasing production of SAF, the squeeze on airlines will worsen when the UK and the EU need increasing numbers.
IATA estimates that sustainable fuels will need to achieve two-thirds of the carbon reduction required to reach the mid-century net zero target.
While SAF production is expected to double to 2 million tons this year, it said it represents only 0.7% of airline fuel demand.
Mr Walsh said the situation is exacerbating this because of the possible removal of SAF's tax credits, the production crisis at Boeing and Airbus could have hurt more efficient aircraft delivery and the recent abandonment of hydrogen aircraft projects.
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