EU plans to give parts of aviation industry a green label

The European Union will put forward rules outlining how some aircraft can be considered climate-friendly under the region’s green rulebook, offering a roadmap toward a cleaner future for an industry that’s traditionally had a huge carbon footprint.  

The Commission, the bloc’s executive branch, will propose adding aircraft manufacturing and leasing to the bloc’s green taxonomy if they meet strict criteria, including having zero emissions or not adding to the global fleet and meeting certain CO2 limits, according to a draft seen by Bloomberg News. 

From 2030, passenger aircraft will have to use a minimum 10% share of sustainable aviation fuels, increasing by 2 percentage points each year in order to qualify for the green label, according to the draft. The commission also added rules for other transport sectors like road and maritime.

Some of Europe’s biggest airline groups, including British Airways’ parent IAG SA, Deutsche Lufthansa AG, Air France-KLM and Ryanair Holdings Plc have committed to net-zero emissions by 2050. But aviation is one of the hardest sectors to decarbonize given the long development times for hydrogen or electric powered aircraft, as well as a lack of propulsion methods for long-haul jets.

The taxonomy is the EU’s bid to create a list of economic activities that contribute toward the bloc’s goal of climate neutrality by the middle of the century, with the hope of channeling private sector investment toward them. It also forms the bedrock of much of the bloc’s environmental regulation, including the green bond standard as well as recent efforts to re-shore vital clean technologies.

But the rulebook has also been a magnet for controversy. A decision last year to include gas and nuclear power, albeit with strict conditions, infuriated environmentalists. The plan to include the aviation sector — even the top performers — will likely draw more ire from green groups.

Proponents say it will provide vital investment for rolling out technologies like sustainable aviation fuels.

SAFs, a substitute for the fossil-based kerosene powering today’s jet turbines, has emerged as a way to make immediate progress toward cutting CO2 emissions, given more impactful changes like hydrogen- and electric-powered planes are still on the drawing board. SAF is made without extracting more fossil fuel, and can be blended for use in existing aircraft.

Airbus SE, the world’s biggest aircraft maker, is betting that hydrogen-powered planes could be a solution for zero-emissions flying, and says it will have a model powered by the fuel by the middle of next decade. It plans to begin flight tests of a hydrogen combustion engine mounted on the fuselage of its A380 super-jumbo in 2026.

The rules won’t inhibit the production of dirtier aircraft or the increase of fleet sizes, though such activities would not be eligible for a green stamp.