Better fuels or higher taxes:

how should aviation clean up its act?

With pressure growing on the aviation sector to clean up its carbon act, some EU countries think they have a solution in the form of a tax. The Global Alliance Powerfuels believes there is an alternative as Deutsche Energie-Agentur GmbH acting head of renewable energies and mobility Stefan Siegemund tells Andrew Tunnicliffe.

With scientists, environmental groups and politicians warning the world faces a climate emergency, pressure continues to build on the booming aviation sector to find ways to reduce its carbon footprint.

“For the aviation industry it has to be clear, things can´t just continue,” warns Stefan Siegemund, acting head of renewable energies and mobility at German energy agency, Deutsche Energie-Agentur GmbH (Dena). “The aviation industry has to assume more responsibility for its impact on greenhouse gas (GHG) emission increases,” he says.


Is the aviation sector doing enough?

With predictions the industry will annually carry almost eight billion passengers within the next 15 or so years, according to the International Air Transport Association (IATA), opponents are increasingly encouraging the public to shun flying, and governments to take action. While that approach has its critics too, Siegemund has sympathy with the so-called “flygskam” – which translates from Swedish to mean “flight shame” – trend. 

“From an environmental point of view there are very good reasons to stop and reduce flight connections on short and middle distances, especially where train or bus connections already exist,” he says. “Even in parts of the aviation industry, there is an understanding that such connections have to be increasingly supplied by other transport modes.”

Contrary to popular belief, the industry has been looking to reduce its environmental impact for some time. More than a decade ago it set out plans to cut emissions by the middle of the century to half the level of those in 2005. The International Civil Aviation Organization (ICAO) said the industry should look to develop and use more fuel-efficient aircraft and sustainable low-carbon fuels, increase the efficiency of its operations and make greater use of technologies. In 2016 almost 300 airlines agreed on an initiative to offset more than 2.6 billion tonnes of CO2 emissions by 2035.

From an environmental point of view there are very good reasons to stop and reduce flight connections on short and middle distances

Aviation tax gets mixed response

However, the commitments weren’t enough for some. This year nine EU governments raised the prospect of taxing their way to a solution, making the “polluter” (passengers) pay a “fairer price for the use of aviation transport”. It’s a call which will likely not be well received by travellers. The IATA says its research suggests the public would rather governments encourage the development of new technologies and sustainable aviation fuels.

It said just one in five (22%) believed a tax of this kind would be beneficial. Alexandre de Juniac, IATA’s director general and CEO said: “The way forward for aviation and the environment is sustainable aviation fuels. Promoting their commercialisation will do more than any tax.”

It is a view Siegemund shares, but says there is much to do to promote them: “Today the negative impact of fossil fuels is not charged into the fuel price; fossil fuels are even subsidised. This makes it very hard to integrate new fuels with less negative impacts into the market.” 

The Global Alliance Powerfuels, a cross-sector alliance of companies and associations brought together by Dena, has called on ICAO members to turn their attention to powerfuels – electricity-based, renewable fuels.

Powerfuels are synthetic gaseous or liquid non-biofuels that draw their energy from green electricity to be used as energy carriers and feedstocks. They include hydrogen; synthetic gas such as methane, propane, ammonia; and synthetic liquid fuels like methanol, as well as Fischer-Tropsch products such as kerosene. Siegemund says they represent the only real option to reducing GHG emissions. “Additionally powerfuels will improve fuel quality and help reduce particle emissions too,” he adds.

Today the negative impact of fossil fuels is not charged into the fuel price

A powerfuel quota could hold the answer

The alliance says the first step should be to determine a global quota for the blending of powerfuels, suggesting 2% to begin with, paid for by passengers through an increase of fairs of 2%. This would rise in line with rises in the blend. However, the limited availability of these fuels is a challenge, according to Siegemund. 

“If there was a clear commitment from the aviation industry to use a certain amount of powerfuels, technology providers would quickly take the next steps and scale-up production capacities,” he believes. “Competition would rise which could create new technologies and maybe even better products at lower prices.”

This would also challenge powerfuel producers to raise their capacity from today’s levels to an “industrial scale” he adds.

Raising the spectre of taxation, the nine EU countries said in a letter to the European Commission: “Compared to most other means of transportation, aviation is not sufficiently priced.”

It was welcomed by environmental groups who agreed the industry, and passengers, should be encouraged to do more. It is a strategy unsuccessfully used before, however. In 2008, Dutch authorities introduced such a levy only to abolish it a year later, as passengers simply flew from neighbouring countries.


Siegemund believes this is why it is vital to find “global solutions for a global challenge”.

“That´s why it is so important to define powerfuels quotas for all ICAO members as soon as possible,” he says, adding although some countries and airlines are taking their responsibility seriously, others, including some “very important ICAO members and main polluters”, continue to impede necessary action.

“If we could achieve an agreement of the top five or top ten airlines to use, for all inner EU flights from 2025 for example, 2% and from 2030 10% powerfuels, that would be a breakthrough deal,” he says.

Finding a solution that works for all is a huge task for the industry and regulators. Siegemund fully understands its complexity and the need for a comprehensive approach, stretching beyond individual airlines, airports and countries. Instead, it requires a solution which encompasses the full transportation infrastructure. 

The first step, says Siegemund, is to look at domestic transportation networks and define a maximum amount of CO2 emission per passenger, per kilometre. Then impose penalties for breaching the threshold, including having to exit the market for a period of time. His aim is to level the playing field for all stakeholders – something that hasn’t been the case for many years – but that requires the will.

Compared to most other means of transportation, aviation is not sufficiently priced

Powerfuels could cost more, but the benefits are obvious

The ICAO and IATA too have much to do, he says. “As a first step, powerfuels should be explicitly mentioned and considered in the ICAO Global Framework for Aviation Alternative Fuels and the IATA Sustainable Alternative Aviation Fuels Strategy; so far both of them have been primarily targeting biofuels.”

Although he recognises the benefits of offsetting initiatives, he argues they are in fact stifling innovation as industry players opt to invest in offsetting projects rather than new solutions, mostly because they are less costly. 

“We know fossil fuels cause, and will cause, very high additional costs in the future,” Siegemund concludes, powerfuels are key to achieving net emissions reductions.

As for their use adding a few percent to the cost of a ticket, he’s not phased. “In this context it is very important to realise what kind of social and income groups most frequently fly, and what impact not flying has on basic consumer needs. In comparison to other sectors, increasing prices in aviation would have very limited negative effects on low income groups.”

Given the findings of the IATA, it is a bold statement but one that may well be fair. Perhaps its key selling point is, however, is that it is not a tax, and that the additional charges will go towards improving sustainability and not into government coffers. That is a much more “sellable” narrative to the world’s legion of frequent flyers.

We know fossil fuels cause, and will cause, very high additional costs in the future

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