Airlines in line for green fuel funding boost under EU climate law

Airlines could be in line for 2 billion euros in European Union funding to help them switch to sustainable fuels, under reforms to strengthen Europe’s climate change policies.

The European Parliament on Tuesday approved a revamp of the EU carbon market, which would use proceeds from 20 million CO2 permits to compensate airlines that use sustainable fuels.

At today’s CO2 price, that would total 1.9 billion euros, which airlines can claim from 2024 to 2030 to cover the price difference between fossil fuel-based kerosene and greener fuels, which are currently far more expensive.

Aviation is seen as one of the hardest sectors to decarbonise, with zero-emission aircraft not expected for over a decade. In the nearer term, sustainable fuel is one of the few options to air travel’s carbon footprint.The EU carbon market reform still needs formal approval from EU countries, due later this month, before it becomes law.

Separately, the EU is also developing binding targets for airlines to increase their use of sustainable fuels.

via Reuters