COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the Proposal for a Regulation of the European Parliament and of the Council on ensuring a level playing field for sustainable air transport
Date: 2021-07-14
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: air quality, air transport, aviation fuel, biofuel, greenhouse gas, reduction of gas emissions, renewable energy, sustainable mobility

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   EUROPEAN COMMISSION  Brussels, 14.7.2021  SWD(2021) 634 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the Proposal for a Regulation of the European Parliament and of the Council  on ensuring a level playing field for sustainable air transport {COM(2021) 561 final} - {SEC(2021) 561 final} - {SWD(2021) 633 final}  
 
 
Executive Summary Sheet 

Impact assessment on a Proposal for a Regulation on ensuring a level playing field for sustainable air transport 

A. Need for action 

Why? What is the problem being addressed?  
Whereas maintaining a level playing field in air transport is essential, GHG emissions from the aviation sector have 
increased since the early 1990’s at EU and global level and are expected to further grow by 2050. As the EU has 
adopted  ambitious  climate  targets  for  2030  and  2050,  aviation  must  accelerate  its  decarbonisation.  However,  the 
sector  has  limited  options  to  reduce  its  carbon  footprint,  notably  due  to  its  reliance  on  fossil  fuels  and  the  lack  of 
mature and price-competitive alternative fuel technologies. As underlined by the Commission’s 2030 Climate Target 
Plan, Sustainable aviation fuels (SAF) have the potential to significantly contribute to the sector’s decarbonisation. 
SAF are technologically viable, and compatible with existing aircraft technology and fuelling infrastructure. However, 
the SAF market is at a standstill, where (i) production and (ii) demand for SAF are low. This is due to (a) industrial 
and  commercial  challenges  including  high  production  costs  and  competing  demand  for  feedstock  and  renewable 
electricity, (b) high-risk investments to scale up production, and (c) the regulatory and fiscal framework in place that 
does not enable the uptake of SAF, all in the context of the highly competitive nature of the air transport market. 

What is this initiative expected to achieve?  
The  general  objective  of  this  initiative  is  to  ensure  a  level  playing  field  in  the  air  transport  market  while  reducing 
aviation CO2 emissions in line with the EU’s climate objectives for 2030 and 2050, by transitioning away from fossil 
jet  fuel  and  tapping  into  the  high  decarbonisation  potential  of  SAF,  by  establishing  a  competitive  market  for  SAF, 
while  at the same time ensuring  a  level playing field  in  aviation. On the one  hand, this means (i)  achieving large-
scale  SAF  production  and  supply  at  competitive  costs;  optimising  existing  production  capacity  and  boosting  the 
development of new SAF plants in the EU; and lowering production costs through economies of scale and learning 
effects. On the other hand, this means (ii) achieving a gradual and continuous uptake of SAF by airlines; mitigating 
risks  of  carbon  leakage  and  ensuring  that  airlines  have  access  to  the  SAF  market  on  the  basis  of  a  level  playing 
field. 

What is the value added of action at the EU level?  
Aviation  is  a  highly  integrated  market  operating  in  a  network  dimension  across  the  whole  of  the  EU.  The  cross-
border dimension is inherent to air transport, which makes any fragmented regulatory framework a significant hurdle 
for economic operators. A patchwork of national measures could lead to unintended counterproductive effects. The 
CO2 emissions from aviation are also of transboundary nature and as such cannot be addressed at national or local 
level only. The EU’s climate objectives are most likely to be effectively achieved if policy is set at EU level. Finally, 
the objective of achieving large scale-up of SAF production and supply is best addressed at EU level, as the energy 
sector is considerably integrated with market actors operating largely across the EU. 

B. Solutions 

What legislative and non-legislative policy options have been considered? Is there a preferred choice 
or not? Why? 
The  measures  proposed  are  structured  around  a  regulatory  requirement  consisting  ensuring  a  competitive  level 
playing field in air transport and a SAF obligation. Policy options provide different ways to design the obligation. A 
first set of Options (A1 and A2) include an obligation on fuel suppliers to distribute SAF at all EU airports. A second 
set of Options (B1 and B2) include an obligation on airlines to uptake SAF when flying from EU airports (B1 covers 
all flights, B2 covers intra-EU flights only). Finally, a third set of Options (C1 and C2) include obligations on the fuel 
suppliers to distribute SAF with some flexibility at the start, and on airlines to uptake jet fuel before departing from 
EU airports. Targets are designed in SAF volume terms for options A1, B1, B2 and C1, and in jet fuel CO2 intensity 
reduction terms for A2 and C2. All options contain incentives to support RFNBOs1. All options are accompanied by 
flanking measures, which are outside the scope of this initiative. These include intensifying European action at ICAO 
to establish global  SAF use targets, steering funding  towards SAF deployment,  establishing a strategic alliance to 
support  Renewable  and  Low  Carbon  Fuels,  and  facilitating  the  SAF  certification  process.  Other  pieces  of  EU 
regulatory framework currently under revision (e.g. EU ETS, ETD and RED2) can further support the deployment of 
SAF. Options C1 and C2 are the preferred options as they allow to scale up significantly SAF production and uptake 

1   Renewable  fuels  of  non-biological  origin  (RFNBOs)  as  defined  in  the  recast  Renewable  Energy  Directive 

(EU) 2018/2001). Commonly referred to as ‘e-fuels’ or ‘Power-to-Liquid fuels’. 

2   EU Emissions Trading System, Energy Taxation Directive and the Renewable Energy Directive. 

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in line with the climate ambition, with minimal market distortions and carbon leakage, in a cost-effective way. 

Who supports which option? 
The  large  majority  of  stakeholders  of  the  aviation  and  fuel  industries,  Member  States  and  NGOs  support 
establishing  a  SAF  obligation  as  an  effective  policy  mechanism  to  boost  SAF  production  and  uptake  and 
successfully decarbonise the aviation sector. Stakeholders are quite divided on the specific design of the option but 
a  majority  of  fuel  suppliers,  Member  States,  NGOs  and  some  airlines  support  a  supply-side  SAF  obligation  with 
flexibility in the fuel distribution, and covering jet fuel supplied for all flights departing from EU airports. At the same 
time,  the  majority  of  stakeholders  see  the  need  for  measures  preventing  carbon  leakage  and  distortion  in  the 
aviation  internal  market.  A  majority  of  stakeholders  also  support  specific  incentives  to  support  RFNBOs.  All  these 
measures are included in POs C1 and C2. 

C. Impacts of the preferred option 

What are the benefits of the preferred option? 
POs C1 and C2 lead to a significant  reduction of well-to-wing CO2 emissions in the aviation sector, i.e. by  around 
60-61%  by  2050,  compared  to  the  baseline  scenario.  Air  pollutant  emissions  decrease  by  around  9%  by  2050 
relative  to  the  baseline.  Overall,  environmental  costs  of  aviation  (related  to  CO2  emissions  and  air  pollutants 
emissions) are reduced by around €87-88 billion compared to the baseline, expressed as present value over 2021-
2050  period.  SAF  production  capacity  increases  by  an  additional  25.5-25.6Mt  by  2050.  SAF  emergence  on  the 
market  leads  to  a  large  reduction  of  aviation’s  reliance  on  fossil  jet  fuel,  whose  consumption  reduces  by  65%  by 
2050  compared  to  the  baseline.  The  energy  security  of  the  EU  improves  as  imports  of  fossil  energy  from  third 
countries decrease and feedstock and renewable electricity for SAF production are sourced in the EU (EU-produced 
SAF  represents  92%  of  total  SAF  use  in  2050).  Under  POs  C1  and  C2,  SAF  technologies  with  the  highest 
decarbonisation  potential  emerge  on  the  market  in  significant  quantities  earlier  than  without  policy  action.  SAF 
prices decrease compared to current estimates, which contributes to reducing the price gap with fossil jet fuel over 
time.  POs  C1  and  C2  lead  to  net  job  creation  in  the  EU,  i.e.  around  202,100  additional  jobs  compared  to  the 
baseline.  Finally,  the  reduction  in  air  pollution  has  positive  effects  on  public  health  (i.e.  external  costs  from  air 
pollution decrease by about €1.5 billion over the period 2021 to 2050, compared to the baseline). 

What are the costs of the preferred option?  
Overall POs C1  and C2 lead to an increase of the costs of €20.3 billion (C1) and €14.6 billion (C2) relative to the 
baseline over the period 2021 to 2050. These costs are largely driven by an increase in jet fuel cost relative to the 
baseline, i.e. €103.5 billion (C1) and €88.2 billion (C2), expressed as present value over 2021-2050. The increase in 
fuel  costs  is  reflected  on  air  fares,  which  are  estimated  to  increase  by  around  8.1-8.2%  by  2050.  Higher  air  fares 
lead to a slight reduction in total passenger air transport activity relative to the baseline, despite still growing by 77% 
by 2050 relative to 2015. This triggers lower capital and operational costs for air transport relative to the baseline, 
i.e. by €84 billion (C1) and €74.5 billion (C2). Additional logistics costs amount to €0.19 billion (C1 and C2). Airlines 
also incur an increase in reporting costs of €0.34 billion (C1 and C2) relative to the baseline, expressed as present 
value over 2021-2050. For the SAF producers, the investment needs over the period 2021 to 2050 are estimated at 
around €10.4-10.5 billion. Indeed, 104 to 106 additional SAF plants need to be built in the EU by 2050 to cater for 
the necessary SAF production capacity. 

How will businesses, SMEs and micro-enterprises be affected? 
The  impact  of  this  initiative  on  businesses,  SMEs  and  micro-enterprises  is  likely  to  be  marginal  and  is  difficult  to 
predict. No detailed assessment. 

Will there be significant impacts on national budgets and administrations? 
Whereas this initiative relies to a large extent on existing administrative and enforcement processes already in place 
under other EU regulatory frameworks, authorities incur an increase in administrative costs of €0.27 billion (C1 and 
C2). This corresponds to higher costs for Member States, i.e. €264 million and for EU authorities €2.7 million. 

Will there be other significant impacts? 
No other significant impacts are expected. 

D. Follow up 

When will the policy be reviewed? 
The policy will be evaluated allowing for an adequate period of time after the proposal’s adoption, for measures to 
be effective and to have generated impacts. Unless implementation issues occur this will not be less than five years 
after the legislation comes into force. 

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