Green taxonomy: aviation holds its breath

At the beginning of the year, when behind-the-scenes clashes increased, aviation’s eyes turned to Brussels. Refueling dedicated to sustainable aviation fuels (SAF) The European Commission could also be a bad surprise for the sector after the European Parliament still failed to agree the EU Aviation regulation. Despite the work done by various aviation players and environmental advocates since 2020, aviation may be excluded from the European green taxonomy or it may be subject to stricter eligibility criteria than expected. Although the Commission should quickly issue a competent act to define the criteria for the application of the green taxonomy for a certain number of sectors that have not yet been integrated, the file is being disputed by various stakeholders.

According to several insiders of European secrets, there is a battle in Brussels to determine the place of aviation in the taxonomy. This location will depend on the availability of private financing, which aviation claims to be particularly sustainable, at least in Europe. The case sees the Directorate-General for Climate Action (DG Clima) as a hardliner on the aviation sector and currently “windproof” Directorate-General for Mobility and Transport (DG Move) against inclusion in the taxonomy and defending the single line “more balanced”.

The final choice and drafting of the act is nevertheless in the hands of the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG Fisma), which is responsible for deciding on taxonomy issues. He stated during the interrogation that he “Currently considering the scope of action to be covered in a future delegated act under the Taxonomy Regulation” and provides “The final decision has not been made”.

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File still in development

In fact, the situation is still uncertain at present. Last week was the pure and simple exception of aviation, which held the rope according to several relevant sources, but positions changed earlier in the week. According to MEP Christoph Grudler (Renew Europe), who claims to be in favor of anything that will contribute to decarbonisation efforts, the question would be brought to the office of Commission President Ursula von der Leyen. “But for now, nothing is gained,” he adds.

According to relevant sources, DG Clima will therefore refer to the issue of criteria limiting the integration of air transport. An opportunity that jumps on the side of air supporters due to the work carried out since the end of 2020 by DG Fisma to precisely prepare the integration of various sectors. It brought together industry groups including Airbus, financial players such as BNP Paribas, NGOs such as Transport and Environment, as well as professional federations and trade unions. A case where DGs Move and Clima participated as observers. This work resulted in a report published in March 2022.

When asked about this point, DG Clima did not directly answer and gave the ball back to DG Fisma. The latter ensures that its current thinking is based on it and that it “evaluates all the activities and all the criteria proposed by the Sustainable Finance Platform”.

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Criteria are discussed

Thus, several criteria and schedules have emerged to regulate access to sustainable private financing from this platform. Thus, we find elements such as an obligation for airlines or lessors – to be fairly eligible – to ensure that this funding is not for growth but for fleet renewal, and to choose the best aircraft or equipment available on the market (principle “Best in Class”). Added the need to prioritize aircraft certified to fly on 100% sustainable aviation fuel (SAF) before other criteria in 2033 after the inventory from 2028 onwards. This should facilitate the arrival of new generation aircraft, which today make up less than 20% of the world fleet.

Manufacturers were also worried, while their investment needs are too high to cope with the increases and environmental demands. The financial analyst who answered the question on the topic also sees more risks for equipment manufacturers and the subcontractor chain in being excluded from the green taxonomy than for airlines, the latter of which is already subject to very significant restrictions in terms of financing with the generalization of environmental criteria. in investor decisions.

Among the controversial points of these criteria, the file connoisseur shows that there is no zero-emission aircraft and that the best in class, such as the Airbus A320 NEO, only improves by 15-20% in terms of consumption. and CO2 emissions compared to the previous generation. On the side of the teams of Karima Delli, president of the European Parliament’s transport committee, it is also noted that the current low share of sustainable fuels in aviation is also an element moving towards exclusion from the taxonomy. At least, while waiting for that part to be reinforced.

Invalid arguments for Christophe Grudler who “anything that decarbonizes should be verified by taxonomy”. He thus declares it “Decarbonization with the Green Deal in 2050 will depend not only on public funds, but also on private funds and therefore taxonomy”. According to another European dossier tracker, the €1.7 billion the Commission has committed to joint R&D “ Clean Aviation Horizon Europe cannot carry much weight without private funding under the framework program (2021-2027).

The opinion shared by the Airbus group says: “Decarbonisation of air transport requires a very high level of investment. To achieve the European Union’s climate ambitions and the goals of the Paris Agreement, the aviation sector must have access to sustainable funding. In order to support the full decarbonisation of the air transport sector, achieving net zero CO2 emissions by 2050 and reducing CO2 emissions from European flights by 55% by 2030, it is essential that air transport be included in the EU taxonomy.

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Gas and nuclear trauma

According to everyone, DG Clima’s opposition to the integration of aviation is largely due to a desire to avoid controversy after intense clashes rocked Brussels over the integration of nuclear and gas into the green taxonomy between 2021 and 2022. avoid talking about “trauma” he remembers that time. Christoph Grudler sees the influence of Frans Timmermans, the European Commission’s Vice-President for the Green Deal in this, even speaking of the Dutch commissioner’s “advisable choice”. Position for restriction of aircraft or taxation of kerosene on journeys of less than 500 kilometres.

A follower of the file also mentions this gas and nuclear precedent, but believes that this weight falls more heavily on DG Fisma, who appears cautious in the file. Above all, it also shows that recognizing aviation’s place in the taxonomy is not politically neutral. He is joined in this by another professional from Brussels, who sees it above all as a political conflict and a potential negotiation game between the general management on several accompanying files. The latter goes further and notes DG Clima’s dogmatic position on aviation.

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