Towards the decarbonisation of the aviation sector (October 24)

Speakers: Smit Rachel, Meadows Damien, Oetjen Jan-Christoph, Llewellyn Glenn
Moderator: Goulding Carroll Sean

On the 24th of October, PubAffairs Bruxelles organised an afternoon discussion on the decarbonisation of the aviation sector with Ms Rachel Smit, Member of Cabinet of the European Commissioner for Transport, Adina Vălean; Mr Damien Meadows, Policy and Legal Advisor, Carbon Markets and Clean Mobility, DG CLIMA; Mr Jan-Christoph Oetjen MEP (Renew/DE), TRAN Vice-Chair and Mr Glenn Llewellyn, Vice President, Zero-Emission Aircraft, Airbus.

Ms Nathalie Errard, Senior Vice President and Head of EU and NATO Affairs, Airbus held an introductory speech.

The debate was moderated by Sean Goulding Carroll, Transport Editor for Euractiv.

Nathalie Errard opened the event, welcomed the attendees and introduced herself. She gave a brief introduction on Airbus’ leading role in the aviation sector and highlighted how the company is working to achieve the objective of aviation decarbonisation towards various streams such as renewing the fleet, working for streamlining air traffic management, fostering sustainable aviation fuels (SAF) usage and finalising Airbus’ strategic project on hydrogen aircraft named “ZEROe program”. Finally, she passed on the floor to Glenn Llewellyn in order for him to give an overview of the ZEROe program.  

Glenn Llewellyn took the floor and started by giving a presentation on the ZEROe programme, by highlighting that the main company objective is to eliminate, or be very close to eliminating, the aviation’s climate impacts so that Airbus can continue to guarantee a high level of mobility across cities, countries and regions.

Subsequently, he started his presentation by showing a slide on the concept aircraft of a fuel cell propulsion powered aircraft, which can be considered as a fully electric commercial aircraft consisting of fuel cells and a storage powered by hydrogen. The speaker also highlighted Airbus’ ambition to be the first manufacturer to offer hydrogen-powered commercial aircraft to service by 2035.

He then clarified that Airbus is also focusing on sustainable aviation fuels in order to bring all existing products to be able to function solely on Sustainable Aviation Fuels by 2030. The speaker also specified that half of Airbus products are already compatible with SAF on a 50% blend and added that it is a shame that this technological capability is not used at its full potential to date.

Subsequently, Mr Llewellyn explained the three main ways  hydrogen is used in aviation, namely hydrogen combustion, power-to-liquid synthetic fuel and hydrogen fuel cells. Then, the speaker gave an overview of a digital mock-up of the hydrogen fuel cell propulsion system and the cell propulsion testing in progress. Moreover, he showed the flight test demonstrator which Airbus has started developing and the Multi Parties Strategic Partnerships map which includes a series of energy providers, airports and airlines with which the company is working in order to make hydrogen-powered aviation a reality across the globe. He also elaborated on the importance of the development of clusters – in which Airbus is willing to contribute     , in order to make possible the enter into service of the ZEROe aircraft – that will have several criteria, such as a relatively low cost of decarbonised hydrogen, favourable regulations and an adequate infrastructure.

Finally, Mr Llewellyn listed the elements which Airbus needs to succeed, namely technology development in order to lower hydrogen cost and standardisation in order to have standards which are adequate to the technological needs of this fuel as well as the physical deployment of infrastructures. He finally thanked the audience and passed the floor to the moderator in order to start the panel debate.

Sean Goulding Carroll opened the debate by welcoming the attendees and introducing himself and the speakers. He emphasised the revolutionary role that affordable air transport has had for connectivity across Europe, whilst highlighting its associated climate costs. He then drew attention to the aviation sector’s total emissions, which notably accounts to around 3,8% of the overall CO2 created within the transport sector in Europe.

He then gave a brief synopsis of the context from which the topic of discussion has arisen and named several pieces of legislations which have been put forward in order to address the question of decarbonisation in the EU, such as the ReFuelEU Aviation initiative and the EU Emission Trading System (EU ETS). The moderator also highlighted that the industry has started to develop several solutions such as electric planes or hydrogen-powered aircraft.

Against this backdrop, he explained that the main aim of the discussion consisted of understanding to what extent the EU is on track towards the process of decarbonising the aviation sector and what the future of aviation could look like.  

The moderator directed the first question to Glen Llewellyn asking him when he thought zero-emission aircraft will be used by a large number of travellers.

Glen Llewellyn started his reply by saying that Airbus’ ambition is to bring hydrogen aircraft in commercial service by 2035. Given this setting, he explained that several questions are     a matter of discussion. In this connection, he stated that the uncertainties surrounding the regulatory, commercial and societal expectations are important unknowns which will be determinant factors to assess the degree of success of the aviation sector decarbonisation process, in general, and of hydrogen-powered aviation, in particular.

The speaker also affirmed that whether zero-emission aircraft would be used in several or some parts of the world is also a question that all stakeholders concerned, especially in Europe, have the ability to influence.

Starting from the consideration that flying with sustainable aviation fuels or clean hydrogen could be more expensive, Mr Llewellyn pointed out the necessity, for policymakers, to provide a favourable regulatory framework that fosters decarbonised solutions and, for the private sector, to ensure the conditions for a global business case.

The moderator then involved Rachel Smit in the discussion, asking for her perspective on the aviation fuel targets under the ReFuelEU Aviation framework and inquiring whether the targets set are too ambitious.

Rachel Smit started to praise Airbus for their work on hydrogen-fuelled aircraft and the 2035 target to introduce commercial flights with this technology, while emphasising that the current global fleet is composed of around twenty thousand aircraft. Against this backdrop, she stated that the European Commission’s short to medium-term goal is to focus on sustainable aviation fuels (SAF) as the only option to start decarbonising the sector. As nearly all planes are now powered by kerosene, she explained, there is not a sufficiently large production of SAF to supply the aviation sector to date. Therefore, the ReFuelEU Aviation Regulation has been calibrated for the scaling up of SAF usage.

She continued by stating that EU institutions are aware that the production is still very costly today and that many more production plants will have to be set-up. For this reason, she explained, the European Commission has set very gradual mandatory targets to kick start the production and foster the uptake of this type of fuels in an affordable manner. More specifically, she mentioned the mandatory target of 2% SAF supply to be achieved in European airports by 2025, scaling up to 20% in 2035 and, subsequently reaching 70% in 2050. Ms Smit said that targets have been set also for more scalable synthetic fuels, but that these are even more gradual, reflecting the fact that these technologies are not  mature yet.

The speaker also elaborated on the concerns the private sector has on SAF availability and costs, as the supply of sustainable fuels is in the making. Moreover, she mentioned the creation of the Renewable and Low-Carbon Fuels Value Chain Industrial Alliance, which brings the industry together to create a joint pipeline of projects to ramp up supply, as well as to discuss remaining barriers to SAF production and supply, and create a more favourable industrial framework for alternative fuels. She pointed to the various available financial instruments to help support SAF research and production, including the Innovation Fund and Horizon Europe, financial instruments under InvestEU, and new room in EU state aid rules. Considering all these elements, she eventually stated that the European Commission is confident that the objectives set for SAF will be achieved.

The moderator turned to Damien Meadows to ask about the interrelation between the EU Emissions Trading System (EU ETS) and the carbon pricing impact on aviation emissions.

Damien Meadows started by emphasising that the EU ETS has been an effective tool to reduce emissions for 18 years. He explained how carbon emissions covered by carbon pricing have been reduced by 37% since 2005 and highlighted that the EU economy has grown in the meantime. He also noted that the aviation sector is a minimal part of the EU ETS system, as it amounts up to roughly 5%. To further support his argument, he took the examples of some projects, such as the direct carbon capture in Iceland or the hybrid steel in Sweden, which have been both incentivised by the EU ETS and have received financial support from the EU ETS-funded Innovation Fund. Mr Meadows clarified that the ETS’s objective is to deliver low-cost production while using the revenues to bring more expensive technology on stream and reiterated that this is a development of the last decade which has shown great promise.

Referring to both the presentation of Mr Llewellyn and the need for support for innovation, he pointed out that around 4 billion euros from the ETS funds are already being deployed for green hydrogen, batteries and renewables. In addition, he mentioned that in November, the European Commission will open a call for proposals to address all the aviation climate effects. He subsequently affirmed that carbon pricing is the only possibility to help aviation reach its objectives and achieve the 1.5 °C target, in general, while specifying that a high degree of international coordination is also beneficial.

With special regard to aviation, the speaker highlighted that the cost of carbon pricing is very low by using the example of a flight from Brussels to southern Spain, for which carbon pricing amounts up to 8 euros per passenger, and further noted that carbon pricing could help the development of SAF and green hydrogen by financing their development. Finally, Mr Meadows finally stated that, while there is a long way to go ahead, the process of financing innovations through the EU ETS system is poised to deliver on decarbonisation pathways.

The moderator directed the debate to Jan-Christoph Oetjen MEP and asked him whether travellers would be willing to pay more for flights, if it means having a climate-friendlier journey. 

Jan-Christoph Oetjen MEP affirmed that it is a difficult question to answer, however, he firstly noted that there is already the possibility of offsetting carbon emissions by travellers on a voluntary basis, but it is not often used. Secondly, he remarked that citizens would still be willing to travel, even if prices go higher. He also expressed the opinion that flying at a very low cost is a model which should be put under scrutiny. 

Regarding carbon pricing, he agreed with Mr Meadows on the fact that it is the best way forward to make sustainable alternatives viable. Subsequently, he echoed the point raised by Ms Smit, explaining that, before the EU took action, it has been heavily questioned whether there would have been enough investments on sustainable fuels to reach decarbonisation targets, as their kick-start and the scale-up were deemed difficult to achieve. For this reason, Mr Oetjen MEP pointed out that a SAF allowances mechanism was put in place as an efficient way to promote SAF supply by rewarding first movers.

Subsequently, he acknowledged that, with the two new regulations in place, namely the ReFuelEU and the revision of the EU ETS Aviation and its revision, there should be a sufficient degree of investments and that the fuel industry has already showed interest, while raising some questions on the uptake and development of SAF on a large scale. He further said that the EU institutions have started a virtuous process to foster investments, while emphasising that the EU legislative framework can still be improved, with special, but not exclusive, regard to the EU Parliament discussion on “book and claim”. The MEP concluded by saying that high energy prices are not helping in this process as they foster uncertainty. However, he also remarked that, although being very attentive on the price, EU citizens are still flying and that they will continue to do so in the future.

Nonetheless, on the questions of additional costs and carbon leakage that would make the European aviation industry less competitive, as briefly asked by the moderator, the MEP pointed out that using hubs outside Europe is a potential problem as it would constitute a form of carbon leakage and added that the matter needs to be addressed at international level as well. He also elaborated on the fact that the question of competitiveness of the European industry would be a crucial issue for the next EU legislative term as, when the European Commission started the discussion on the European Green Deal, the energy crisis was not expected.

Sean Goulding Carroll involved Glen Llewellyn in the discussion and asked whether the EU is providing enough legislative support at the moment.

Glen Llewellyn started by stating that what has been already discussed in the panel constitutes valuable food for thought and remarked, by noting it may seem paradoxical, the Airbus support for even higher targets for SAF, compared to the ones enshrined in the ReFuelEU initiative. The reason behind this stance, he explained, lies in the company’s long-term perspective of the development cycle and the technology timeline for the 2030s and the 2040s.

However, the speaker also pointed out the need to be careful with the question of competitiveness of the EU industry, with special regard to the right balance between incentives and penalties. In this regard, Mr Llewellyn emphasised the need to encourage innovation, while avoiding sanctions that damage competitiveness, hence providing the EU with a fertile ground for decarbonisation technology development. He also pointed out that the EU should keep a close eye on how the US has been regulating the decarbonisation process so that the EU can also take this opportunity to relaunch growth and competitiveness.

He concluded by saying that decarbonising hydrogen in quantities to support the use of aviation fuel should be a priority, even before its potential use, as an example, for heating. He also envisaged a business case on a global scale in order to put forward game changing solutions. For these reasons, he highlighted the importance of both EU and international legislative and non-legislative actions in order to regulate and standardise the hydrogen value chain from production to transportation, from storage to fuelling.   

Jan-Christoph Oetjen MEP spontaneously took the floor to address a question to Glen Llewellyn. He asked what are, in his opinion, the possible obstacles for airlines and airports to invest in hydrogen aviation, with special regard to infrastructure, and how playmakers can help.

Glen Llewellyn agreed that the efforts and time limits to build a hydrogen-based infrastructure seems daunting. However, he also noted that, according to Airbus, 250 airports fully equipped for hydrogen refuelling around the world would be sufficient to sustain 12 years of production of hydrogen aircraft. In this regard, he explained how this global future setting is indeed a challenge, but it is considerably lower compared, for example, to land transportation.

Moreover, Mr Llewellyn referred to Airbus’ Multi Parties Strategic Partnerships map shown during his presentation to understand the efforts that have been made so far by the company in order to determine both what kind of efforts are necessary in order to create a fully-fledged supply chain for hydrogen aircraft and what is actually going to be the cost at the refuelling station. He concluded by reiterating that the hydrogen infrastructure question for aviation is more easily scalable compared to other transportation modes and, for this reason, the timeline seems less intimidating that it may appear at first sight.

The moderator subsequently addressed Damien Meadows to ask for his perspective on EU preparedness on the infrastructure that is needed to deploy alternative fuels.

Damien Meadows agreed with Mr Llewellyn’s point on decarbonising land transportation, while on the US Inflation Reduction Act, he stated that it is an example of policy initiative which has more incentives than penalties. Subsequently, he pointed out that the increase of funds asked by some actors from the industry to further support alternative fuels can be followed up by EU institutions. However, he also remarked that this funding possibility could be only an aviation-specific feature. In fact, as regards the EU ETS generally, the Innovation Fund of 40 billion euros up to 2030 is actually oversubscribed, he specified. The speaker also warned on the dangers of overfunding hydrogen infrastructures for airports as, at this stage, it might be inefficient.

Mr Meadows subsequently stated that, at EU level, the legislation is moving in the same direction to what Mr Llewellyn mentioned before regarding infrastructures. However, he also clarified that the main focus seems more on shipping at the moment, as the question of Green Corridors Networks has mainly  emerged within the EU decarbonisation public discourse on transport. Moreover, regarding the international dimension of infrastructure, he mentioned the European Parliament’s proposal on the Innovation Fund to finance activities outside the EU, when they provide an added value for Europe, while highlighting the importance of international coordination and cooperation.

The speaker concluded by arguing how the presence of green corridors in the European legislation for shipping could create an opportunity for the EU to work with the rest of the world and help non-EU actors have the infrastructure they need.

Sean Goulding Carroll asked Rachel Smit whether she thought there is the same interest at an international level in decarbonising aviation as there is in Europe.

Rachel Smit initially picked up on the previous question about infrastructure, emphasising that SAF are interoperable and, as a result, airports do not need large additional infrastructures, while hydrogen investments are more for the longer term. She asked Mr Llewellyn how he saw the two technologies (SAF vs hydrogen) developing over time and whether he saw them as complementary. She also highlighted that the European Commission’s main instruments to support infrastructure development within Europe are the Trans-European Transport Network and the Trans-Europeans Networks for Energy initiatives, and that the question of how best to support the roll-out of infrastructure for hydrogen-based aviation should be looked at within those frameworks. The Commission is already looking at possible synergies between transport and energy hubs.

Subsequently, the speaker came back to the moderator’s question by stating that there is growing global consensus on the fact that some actions have to be taken, as shown by the adoption of the ICAO long-term global aspirational goal (LTAG) for international aviation of net-zero carbon emissions by 2050. She also mentioned a high-level conference ahead of the COP 28 on sustainable aviation fuels as a further sign that the question matters at an international level.

Against this background, she noted that there is limited enthusiasm outside Europe for mandatory targets, which is also linked to disparities among countries to invest in alternative technologies. However, she also remarked that the global public policy debate is ongoing and that  it is  interesting to highlight that even the large players which have been reluctant in taking action for decarbonisation, are perceiving SAF as an economic opportunity and are willing to be part of the decarbonisation shift. Ms Smit concluded by stating that a window of opportunity is opening as an increase of investments in SAF will help in levelling the playing field at a global level.

Drawing on the reflection about the future of aviation fuel mentioned by Rachel Smit, the moderator asked Glen Llewellyn what would, in his view, the fuel mix of the decarbonisation process look like.

By referring to an Airbus’ analysis, Glen Llewellyn reaffirmed the relevance of hydrogen for the aviation sector. In addition, he explained that the short-medium range market segment, with special regard to the intra-European one, could be covered by the first generation of hydrogen technology. Then, returning to Ms Smit’s argument regarding the logistic chain for hydrogen, he clarified how this last source of energy has interesting climate credentials as it has the potential to use less energy compared to other fuels and even substitute SAF in the very long run. He also added that the success of both hydrogen and SAF will depend on how the two ecosystems will evolve. He concluded by specifying that he was not advocating for hydrogen instead of sustainable aviation use, but rather for a mix of the two fuels, while reiterating that SAF are compatible with the existing fleet and concluding that they are both complementary in order to reduce the aviation climate impact.

Sean Goulding Carroll asked Jan-Christoph Oetjen MEP whether some recent measures adopted at the national level to restrict flights are an effective solution to fight climate change.

Jan-Christoph Oetjen MEP argued that all modes of transport should be decarbonised, without favouring a specific one. In addition, he remarked the presence of different populist proposals regarding “flight shaming”. In this regard, he affirmed that the societal needs should be taken into account while tackling the aviation climate impact. As a general statement, he added that changes should apply gradually in order for citizens to better adapt to the necessary changes that are needed to fight climate change. 

Rachel Smit subsequently took the floor by commenting on Mr Oetjen’s MEP argument on “flight shaming” and stressing the importance of the connectivity dimension and the impossibility of banning individuals from flying. In this regard, she agreed that some measures taken at a national level could not only seem populistic, but also be counterproductive as, for example, short-range flights are the easiest to decarbonise. She concluded by recalling that limiting flights would have the effect of reducing the incentives for the industry to invest in the decarbonisation process.

The Q&A session covered the following issues: Whether aviation deserves to be prioritised against other transport modes, the interrelations between the energy sector and the transport sector, the scenarios ahead for the hydrogen economy, the risk of regulatory capture for sector-specific legislation, the questions of integrity and implementation of decarbonisation rules, the green airports infrastructure agenda and the scenarios ahead, the opportunities to decarbonise land transportation for airports with hydrogen, the introduction of hydrogen by 2035 as an example for other aviation players, the Renewable and Low Carbon Fuels Alliance      and the EU competition rules, the revision of ReFuelEU during time, the question of cargo operators which do not fall under the Union Airport definition in the ReFuelEU initiative and their SAF access, the aviation role in the new carbon management strategy, carbon removal in the next ETS revision, the risk of carbon leakages.

Do you wish to know more about the issues discussed in this debate? Then check out the selected sources provided below!

Airbus ZEROe concept

Airbus’ decarbonisation roadmap

Destination 2050 report

Towards a Climate-Neutral Europe Curbing the Trend, Book, Routledge

Industry and the Green Deal, European Commission

Sustainable transport, European Commission

ReFuelEU Aviation – Sustainable Aviation Fuels, European Parliament Legislative Train

EU Emissions Trading System (EU ETS), European Commission

Renewable and Low-Carbon Fuels Value Chain Industrial Alliance, European Commission

Innovation Fund, European Climate, Infrastructure and Environment Executive Agency, European Commission

Horizon Europe, European Commission

Commission opens €4 billion call for proposals for net-zero technologies under the Innovation Fund. Press Release, European Commission

Refuel EU sets ambitious SAF mandate but opens Book & Claim dilemma for Business aviation, European Business Aviation Association

Trans-European Transport Network (TEN-T), European Commission

Trans-European Networks for Energy, European Commission

Zero-carbon shipping centre and partners initiate European Green Corridors Network, Offshore Energy

Global Sustainable Aviation Forum / COP28, ATAG – Air Transport Action Group

Long term global aspirational goal (LTAG) for international aviation, ICAO

Third ICAO Conference on Aviation and Alternative Fuels, Press Release, ICAO