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Lufthansa is the first airline to pass on the costs of the new European emissions rules to passengers. It has been announced that from next year there will be a surcharge of €1 to €72 per ticket.
The Frankfurt-based group, which operates Eurowings, Swiss and Austrian Airlines as well as the German carrier, said on Tuesday it is imposing the levy on departures from European countries to cover the “ever-increasing additional costs” of new environmental fuel requirements. .
Lufthansa attributed the surcharge’s introduction to EU regulations requiring sustainable aviation fuel (SAF) to account for at least 2 percent of airlines’ fuel consumption, which comes into effect in early 2025. The company also pointed to the European Emissions Trading System and the international CORSIA system, under which airlines buy carbon credits to offset any growth, as factors behind the surcharge.
SAF currently costs at least twice the cost per ton of conventional hydrocarbon-based jet fuel.
The group’s surcharge applies to departures from the 27 European Union member states, the United Kingdom, Switzerland and Norway, all of which participate in the SAF rules and have emissions trading schemes.
Andrew Charlton, from consultancy Aviation Advocacy, said the Lufthansa Group’s move, the first by a European airline, was an “extremely aggressive” response to the European Commission’s introduction of the rules.
Although some airlines had introduced surcharges after airlines entered the Emissions Trading Scheme in 2012, Lufthansa’s move was the first by a European airline in response to the latest measures, Charlton said.
The European Union’s SAF quota will be gradually increased over the coming decades, reaching 70 percent by 2050. Industry is one of the most difficult sectors to decarbonize, due to the challenge of finding non-fossil fuels that are as energy-dense as highly concentrated kerosene. Lufthansa expects that the gradually increasing SAF requirement will cost billions of euros in the coming years.
“The aviation group will not be able to bear alone the increasing additional costs resulting from regulatory requirements in the coming years,” the report said.
The new surcharge would cover some of the costs resulting from the 2025 regulatory requirements, the group said.
Some environmentalists warned that airlines needed to be transparent about the fees they charged.
Jo Dardenne, aviation director at Transport & Environment said: “The announced surcharge does not provide sufficient clarity on the volumes and costs of SAF purchased, nor on the distribution of costs between the airline and its passengers.”
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There are significant concerns about the ability of SAF suppliers to produce sufficient fuel to meet global needs.
Manufacturers produced 500,000 tons of SAF worldwide last year. Lufthansa consumed 8.45 million tons of fuel during the year.
It is not clear whether other European aviation groups will introduce similar explicit surcharges or bear the costs of the new environmental requirements themselves.
Lauren Riley, Chief Sustainability Officer of United Airlines, in an interview with the Financial Times this week, called on pipeline operators to start shipping SAF as part of efforts to reduce fuel costs.