Aviation Industry Grapples with the Cost of SAF As EU Pushes for Clean Buses: GMPB

Covered in this week’s Green Mobility Policy Brief: Aviation Industry: SAF to save aviation, but questions of costs arise; EU to push for cleaner buses & strategic autonomy; Europe can use its soft and financial powers to build a successful electric vehicle value chain; and Uber and Lyft in New York required to be zero-emission by 2030, officials say.

Aviation Industry: SAF to save aviation, but questions of costs arise. Sustainable aviation fuels (SAF), which will reduce emissions by up to 80% from conventional fuel, is seen as the carbon saviour for the aviation sector executives meeting in Dublin this week. Greener fuel is the only way airlines will meet strict global carbon emission targets, but there’s little consensus on who should foot the hefty production bill which costs between three to five times more than traditional jet fuel with Aengus Kelly, chief executive of lease giant AerCap, citing an estimated investment of $1.5 trillion over 30 years for the transition. There is debate about whether governments, airlines, or oil producers – or a combination of all three – should fund the expansion of production required to hit a proposed European Union target of 20% by 2035. Some airlines called on the EU to catch up with the United States, where the Inflation Reduction Act is spurring spending. IAG’s sustainable fuels and carbon manager said in an emailed statement that “With the right policy support, 30 SAF plants could be built across Europe over the next eight years”. Ryanair agreed to buy its SAF from Shell in steps towards its target of powering 12.5% of flights with the fuel by 2030. However many complain that action is pointless until huge emerging market emitters like China and India agree to play their part, one executive said. – Charlotte Goldstone

EU to push for cleaner buses & strategic autonomy. The European Commission is considering mandating that all new city buses sold by 2030 have net-zero emissions, which is part of a broader review of emissions standards for trucks and other large vehicles, expected by February 14th. New rules would amp up existing heavy vehicle greenhouse gas legislations agreed in 2018 as the EU’s first standards for trucks, buses, and coaches, which account for around a quarter of CO2 emissions from the transport sector. However, whilst this legislation is crucial in meeting the bloc’s climate goals, the target is also aimed at Beijing. Chinese companies control a third of the EU’s electric bus market, helped by their rapid electrification of transport and their domination of global battery supply chains. Zhengzhou-based Yutong says its e-buses are already on the road in 21 European cities, including in parts of Denmark, France and Slovakia, while BYD, which is headquartered in Shenzhen, has signed deals to send its vehicles to Spain, Finland, Hungary and the Netherlands among other places. Transport executives say the possible Commission plan is aimed both at getting European manufacturers to make more e-buses as well as pushing local authorities to go electric, and by setting an early green bus target, European companies will be spurred to move faster.– Charlotte Goldstone

Europe can use its soft and financial powers to build a successful electric vehicle value chain. The European Green Deal shall direct the European Union onto a path aiming for net zero by 2050. Although Europe has already invested heavily into electric vehicle (EV) and battery production, the Deal must ensure a push for further green technology within the Union. The announcement of the incentives produced by the American Inflation Reduction Act (IRA) for EV production has caused Europe to react and create its own response so it can maintain and grow value chains for green tech. Currently, Europe monetarily supports EV supply chains and sales. Nevertheless, the EU must streamline state aid rules and concentrate on EV production aid, objectives the IRA implicates, so the Union does not lose out against the IRA policies; a green simplification strategy to speed up green tech production. However, solely simplifying state aid would not equally help every member state. Therefore, the European Sovereignty Fund (ESF) should be formed with the financial backing of at least EUR 350 billion via joint debt issuance from the European Commission. The ESF must support the sectors which the IRA directly impacts to keep Europe competitive in the green tech market – Tia Fishlock

Uber and Lyft in New York required to be zero-emission by 2030, officials say. Eric Adams, mayor of New York, stated the above initiative which is a part of his ‘Working People’s Agenda’. Both Uber and Lyft support the transition, where the shift should not cost extra to drivers albeit these details have not been released. This new target will affect over 100,000 vehicles in New York. Each company already has its own initiatives to encourage drivers to switch to EVs. For instance, Uber offers slightly extra money for drivers with EVs, and Lyft has spoken of expanding EV rental prospects. However, as of September 2022, only 1% of rideshare drivers in NY use EVs so the target aims to increase this figure. This target follows similar ideas seen in California and Canada. For example, California has also called for ridesharing companies to switch to EVs by 2030. California’s targets stem from the Clean Miles Standard which aims to clean the transport sector. Incentives for those drivers in California who lease/buy an EV include the Clean Vehicle Rebate Project and the Clean Fuels Rewards. Moreover, Uber has also signed on to Electric Mobility Canada’s 2030 EV Action Plan which aims to help Canada switch to EVs. Uber and other rideshare companies are actively promoting switches to EVs, showing their pledges towards net zero.  – Tia Fishlock