Aviation Fit for 55
In July 2021, the European Commission (EC) proposed the Fit for 55 package, which aims to reduce greenhouse gas emissions in the EU by 55 percent in 2030. A number of proposals aim to support the European aviation industry to become more sustainable and to reduce emissions. These components concern the EU Emissions Trading System (EU-ETS), the implementation of ICAO’s Carbon Offsetting and Reducing Scheme for International Aviation (CORSIA) in the EU, a revision of the Energy Tax Directive (ETD) including the introduction of a European kerosene tax, and the ReFuelEU Aviation proposal which introduces an EU sustainable aviation fuel (SAF) blending mandate.
Air France-KLM Group, Groupe ADP, Lufthansa Group and Royal Schiphol Group commissioned SEO Amsterdam Economics and Royal Netherlands Aerospace Centre to conduct an independent assessment of the impacts of the Fit for 55 package on the aviation sector. To do so, we estimated the impacts on ticket prices, passenger demand, CO2 emissions and carbon leakage, based on SEO’s global passenger choice model.
The costs associated with Fit for 55 policies makes European air travel more expensive. Higher costs reduce the demand for air travel to, from and within the European Economic Area (EEA) with respect to a reference scenario of the same year without these policies. Fit for 55 policies cause a net shift in demand to competing non-EEA hub airports and routes. Carbon leakage due to this shift reduces the overall net CO2 emission savings.
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