IBA's Sustainability Watch - November 2023

Feasibility study concluded that Ireland is set to produce enough SAF to meet its EU-mandated volumes 

A feasibility study led by SAF supplier SkyNRG and SFS Ireland, and supported by Boeing, Avolon and ORIX Aviation concluded that Ireland could be self-sufficient in SAF if public-private cooperation and other government-supported mechanisms such as tax incentive policies and capital allowances are put into place.  

The report ‘Ireland’s Sustainable Aviation Fuel Opportunity’ also suggested that ten SAF production plants would be needed to meet its own EU-mandated SAF requirements by 2050, generating €2.55 billion in revenues and creating around 1,000 skilled jobs. As SAF production is an issue within the industry, IBA welcomes such studies to track progress and help aviation players focus their efforts on detected gaps.  

EU to include taxing aviation fuel at the ongoing COP28 Summit

The European Union, represented by Wopke Hoekstra, the EU’s climate commissioner, plans to champion the implementation of an aviation fuel tax at the upcoming 28th Conference of the Parties (COP28). Hoekstra envisions the tax as a significant revenue source, with charges applied per flight. The Commissioner's strategy involves thorough discussions during COP28 to address the rationale, specifics, and execution of the aviation tax. Additionally, COP28 aims to establish a fund for loss and damage associated with global warming, a contentious topic with the EU committing a substantial amount, contingent on positive outcomes. The financial requirements for addressing climate change impacts, estimated in the trillions annually, have led to proposals such as the EU's "polluter pays" principle, making fossil fuel producers financially responsible for climate damage and renewable energy transitions in developing nations. Eamon Ryan, the Irish climate minister, emphasizes the need for taxing the aviation industry and sourcing diverse financing solutions in the final COP28 agreement. IBA agrees with this inclusion into the agenda as such policies promote aviation decarbonisation. Furthermore, as the discussion unfolds, it would be two steps in the right direction to have a conversation around the incentivisation of SAF as one of the potential outcomes. Additionally, taxing the fuel producers causes a ripple effect impacting airlines and passenger cost. 

ICAO’s third Conference on Aviation and Alternative Fuels  

Participant countries of the Third ICAO Conference on Aviation and Alternative Fuels (CAAF/3), which took place in Dubai from 20 to 24 November 2023, agreed on the necessity of a global framework to support the industry’s clean energy transition. To achieve the global interim goal of a 5% reduction in emissions some countries will need support for capacity-building assistance, finance and infrastructure. For that, a collective ‘Vision’, in which harmonised regulatory foundations, support for implementation initiatives and improved access to financing was launched. ICAO’s Council President stated that the idea behind the Framework is to “facilitate the scale-up of the development and deployment of SAF, LCAF and other aviation cleaner energies on a global basis, and mainly by providing greater clarity, consistency and predictability to all stakeholders, including those beyond the aviation sector”. 

IBA sees the initiative as good progress towards the industry goal of NetZero by 2050. Differences between nations on infrastructure and tech deployment have to be taken into account and addressed by positive initiatives. 

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