Time for a rethink on ReFuelEU

The EU has been caught lobbying itself on its ReFuelEU rules, which would require blending 6% SAF by 2030. But the real scandal is how much it would cost holidaymakers and businesses.

An “aviation industry declaration” on sustainable fuel, due to be handed to the EU’s transport commissioner this week during the le Bourget air show, was apparently drafted by European Commission’s transport officials themselves, and only sent to aviation lobbies for endorsement , according to a story in Politico.

The real story on RefuelEU, however, should be about its cost to holidaymakers and businesses. It requires airlines to blend 6% SAF by 2030, including 1.2% of Renewable Fuel of a Non-Biological Origin (RFNBO), ie hydrogen or kerosene.

Here’s the arithmetic, using the EU’s own cost figures for different fuel types. If you blend 4.8% of SAF that costs 2.8 times as much as jet fuel, plus 1.2% of RFNBO that costs 11.5x the cost, that drives up airline fuel costs by 21% and flight costs by around 8%.

At best 1.2% RFNBO in aviation fuel avoids 0.02% of European emissions. But, since the green electricity used to make e-kerosene could have achieved 9x the emissions reductions if put into a heat pump, EV or removing coal from the grid, the reality is it will actually BAD for the climate.

The cost isn't explicitly met by subsidies, but it is there nevertheless - hidden in regulations and taxes. The RFNBO mandate is pretty much the perfect example of badly-designed net zero policy: it will cost consumers and businesses real money, divert that money to politically favoured solutions, drive inflation, achieve nothing, and play into the hands of populists.

Time for a rethink.

Coda I

A few readers think it’s OK for RFNBO to push up the cost of flights because that helps supress demand. If that were the theory of change, then tax aviation and use the proceeds to support high-speed rail.

Forcing airlines to do things that are wildly expensive and bad for the climate in order to price families out of flying on holiday is bad economics, unethical, and political madness.

Coda II

For those asking what I would do instead, here is a list of things that are not wildly expensive and bad for the climate, let’s start with these.

• Improve efficiency in aviation operations, air traffic control, stacking, taxiing, ground operations (not hydrogen obviously, that’s just more stupid PR)

• Retire old planes, because they are much more thirsty than new ones

• Accelerate the development of the next generation of planes and engines - lighter, smarter, more efficient. My friend Dean Donovan has written a brilliant piece on the opportunities (ignore the headline, of course efficiency can’t get aviation to Net Zero).

• Reduce impact of contrails by changing altitude and timing of the small percentage of flights that cause most of the impact, tweaking fuels, etc.

• Expand use of current-generation waste-based SAF eg those based on used cooking oils and animal fats.

• Redirect all existing biofuel production away from land transport. After appropriate alcohol-to-jet and refinery processes this would cover 25% of global jet fuel demand today.

• Explore pathways to push down the cost of advanced bio-SAF, but do not mandate its introduction until it is no more than 2x the cost of jetfuel.

• Introduce a robust book-and-credit scheme to allow airlines to use permanent removal credits - and ONLY PERMANEMT removal credits to meet their decarbonization requirements.

These measure could halve aviation’s climate impact from the current ~4% of total emissions to 2% over the coming 20 years, despite aviation demand doubling.

I would consider that a big win - and definetely more of a win than throwing public money at solutions that are wildly expensive and bad for the climate.

Selah.