Walsh highlights a recently published European Commission report on the region’s competitiveness from Mario Draghi, the former European Central Bank president, which echoes some his concerns on the impact of current policies on airlines.
“The competitiveness of the EU is being undermined,” Walsh says.
Among its findings, Draghi’s report highlights the European Trading System for carbon credits as carrying a risk of “business diversion” from EU hubs to others where such costs are not mandated, while it also says the EU should do more to “de-risk and finance decarbonisation” when it comes to sustainable aviation fuel (SAF) in particular, contrasting the bloc’s policies with the positive impact of the Inflation Reduction Act in the USA.
“The EU needs to start building a supply chain for alternative fuels, or the costs of meeting its targets will be significant,” Draghi writes.
Citing the report, Walsh says: “We should learn from the mistakes they are making, because they are making big mistakes.”
Speaking on the same panel, the chief executive of European low-cost carrier Vueling, Carolina Martinoli, concurs with Walsh, saying of SAF production: “There was a belief that a mandate would be enough to develop this industry and that’s just not happening – it’s not enough.
“Without incentives, without guarantees to investors, it’s not going to happen.”
Her concern, she adds, is that “demand suppression” will be a result of a failure of the EU to incentivise the development of SAF production alongside airline mandates, which kick in next year at 2% of overall fuel useage.
Her frustration is exacerbated, she notes, by the opportunities in terms of job- and wealth-creation that exist for Europe if it commits to building industrial-scale SAF production.
Concerns among airlines have been exacerbated by developments such as Shell’s announcement earlier this year that it would “pause” construction at its 820,000 tonne/year biofuel refinery in Rotterdam.
Speaking later at the same event, Shell Aviation president Raman Ojha said the business remained committed to helping the aviation sector’s energy transition, but that work in the Netherlands was paused in July “to assess the situation and begin the journey again”, saying production complexity needed to be addressed.
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Publish date : 2024-09-27 04:01:00
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