Biofuels Are Essential to Reducing EU ETS Carbon Costs and Meeting Carbon-Neutral Growth Goals, Says Report

Aviation Fuel/Sustainable Aviation Fuel (SAF)International Sustainability

February 18, 2010

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(GreenAirOnline.com) Although not commercially viable yet, the EU Emissions Trading Scheme (EU ETS) offers a strong financial, as well as environmental, incentive for the adoption of jet biofuels, says a new report by EQ². Based on industry assumptions of 15% and 30% consumption of biofuels in 2020 and 2030 respectively, they could contribute to potential savings for airlines involved in the EU ETS of $2.01 billion in 2020 and $5.84 billion in 2030 on the purchase of carbon credits. Based on the current EU ETS carbon price for 2012 of €15 and the 2009 average jet fuel price of $1.69 per gallon, every gallon of jet fuel burned would incur carbon costs of an additional $0.21, equivalent to a premium of 12.4%.

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The report warns the aviation industry not to rely on carbon offsetting to achieve its goal of carbon-neutral growth from 2020. It accepts that if carbon offset credits are cheap enough, the financial incentives for using biofuels would be negatively affected. However, it says carbon offsetting would not reduce a company’s climate risk exposure or improve sustainability in the long term. Moreover, it says, there is public sensitivity to ‘greenwash’ actions and airlines should not put their brand reputation at stake.

“If the airline industry is serious about achieving carbon neutral growth from 2020, biofuels offer the only realistic way to do this,” says Gregory Elders, Director of Research for EQ². “Our research shows that through a committed use of biofuels, where 30% of global jet fuel is biofuel by 2030, the industry would avoid over 400 million tonnes of carbon dioxide emissions a year. READ MORE Download Study