Liebreich: EU plan for 1% of aviation fuel to be derived from green hydrogen by 2030 'will not be affordable'
Influential analyst says it will cost an extra €24-30bn a year to meet RefuelEU's e-fuel target
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The EU plan, which has been agreed in principle by the European Commission, Parliament and Council of ministers — and could be signed off by the Council as soon as 17 October — aims to significantly reduce greenhouse emissions from planes by 2050 by forcing flights departing EU airports to use increasing quantities of bio-based sustainable aviation fuels (SAFs) and green hydrogen-based synthetic e-fuels from 2025.
This means that aviation fuel in Europe would need to include a 2% blend of bio-SAF from 2025, rising to 6% in 2030, with increases every five years until the level reaches 70% in 2050.
But according to Liebreich, it will be too expensive to meet the 2030 e-fuel targets, and they will have to be rethought.
But he added: “I’m going to be completely honest, I don’t see the e-fuels for aviation being affordable.”
He explains that Europe spends about €600bn on fuel annually, but that e-fuel is four to five times more expensive to produce than conventional jet fuel.
“[So] what you’re actually saying is, instead of buying [the 1% of] fuel for €6bn, we’re actually going to be forcing Europeans either through taxes or through what they spend on that fuel [through increased air fares] to be spending [an extra] €24bn or €30bn every year.
“These seem like quite large numbers, so I would not be at all surprised if we simply fail to get to that 1% because the costs become apparent.
“I can’t see [the 2030 target] happening. I think if you then start to use something like the [European] Hydrogen Bank to help deliver them, you'll very quickly make transparent the scale of the problem, the scale of the subsidy or support that’s required to get to even 1% e-fuel, and I think at the end of the day, there'll have to be a rethinking.”
Liebreich added: “That rethinking, by the way... can only go one or two places — either relaxing the 1% or the whatever per cent, or a lot more biofuels or frankly, combinations. So the carbon coming from bio, but then being enhanced and combined with electrolytic green hydrogen, that’s... the compromise that we'll get to.”