The different policies of the European Union in sustainability will have a strong impact on ticket prices for all modes of transport, but especially air travel (one of the least environmentally friendly), as Brussels is imposing a 55% reduction in polluting emissions by 2030.
By sectors, air transport is one of the most affected, as they must bet on green hydrogen, renewable fuels of origin non-biological renewable fuels and biofuels advanced biofuels to power aircraft. This, according to a study by Bain & Company, will cost companies close to two trillion euros, which is already translating into price increases that will continue to rise until at least 2026.
In Europe, Bloomberg notes, airlines are losing a quarter of their free emissions allowance this year, the first in a series of reductions already estimated to be added to ticket prices.
While policies differ from country to country, the common goal is to clean up an aviation industry that for a century has been dependent on fossil fuels to operate. Airline executives worry that unless they show they are serious about reducing emissions now, they will face fines, flight limits or, worst of all, be suspended altogether.
The new fuel
Sustainable jet fuel, a cleaner-burning liquid made from used oils or agricultural feedstocks, is the industry’s primary means of reaching its goal of zero net emissions by 2050. But the new fuel is in short supply and can cost more than twice the price of regular jet kerosene, leaving airlines with no choice but to pass the cost on to passengers.
It means little respite for travelers who have been hit by rising prices since air travel resumed after the pandemic. Now they will also have to pay to neutralize aviation’s carbon footprint.
On the other hand, sustainable aviation fuel can reduce emissions by up to 80%. Greener fuel is essential to reduce emissions from long-haul flights, the source of most air pollution, because electric planes do not have sufficient range. Hydrogen propulsion is not expected to have a significant impact for decades.
It’s not just the price of fuel that will be absorbed by passengers. The cost of buying new, cleaner aircraft is also being reflected in fares. Qantas, which has begun taking delivery of the first of dozens of new-generation aircraft ordered, has said it is increasing fares on most domestic routes by an average of 2% to 3%.