Fit for 55: Assessment of costs

Fit for 55:

Assessment of costs

24 September 2021

Main observations

• On average (2023-2035), “Fit for 55” will cost airlines about EUR25 billion per year, reaching a total of EUR39 billion by 2035. This would exceed the entire (global) industry’s net profit in 2019 (EUR22 billion).

• By 2035, a ton of CO ₂ will be priced ~EUR380 on intra-EEA flights. This is 3.8 times the estimated external cost of climate change in the short and medium term (up to 2030, EUR100) and 1.4 times the external cost in the long term (2040-2060, EUR269).*

* External costs assumptions are from the European Commission’s Handbook on the external costs of

transport (version 2019).

Assumptions: price and scope

Price in EUR

EUAs (t) 52 64 80 96

SAF (non-

PTL) (t) 1750 1659 1552 1452

PTL (t) 3054 2189 1672 1452

Kerosene (t) 485 485 485 485

Traffic

• Impact of measures on demand was not modelled.

EU ETS

• CH & UK mirror requirements on flights to EEA, but not to/from third countries.

• All SAF from RefuelEU mandate claimed under EU ETS ETD

• Only applied on intra-EEA, not to/from CH & UK RefuelEU

• Only applied on uplifts at EEA airports, not to/from CH & UK CORSIA

• Avoided offsetting costs for non-implementation of CORSIA on intra-EEA flights (only for EEA airlines) not accounted for As sale prices forecasts for SAF are not publicly available, price

assumptions for SAF are based on 2021 HEFA sale prices and production cost forecasts from Clean Skies for Tomorrow

The reference for jet fuel is the 2021 average fuel price paid at the refinery (source: IATA)

Assumptions: CO ₂ emissions

0 50 100 150 200 250

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Emissions, in million tCO2

Annual CO

emissions

EEA <-> third countries exempt from CORSIA EEA <-> third countries

EEA <-> CH <-> UK Intl intra-EEA Domestic CH/UK Domestic EEA

Total cost of “Fit for 55” package

€ -

€ 5,000

€ 10,000

€ 15,000

€ 20,000

€ 25,000

€ 30,000

€ 35,000

€ 40,000

€ 45,000

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Cost, in million EUR

EU ETS (2019-only CORSIA baseline) RefuelEU

ETD EU ETS

Costs: intra-EEA & CH/UK flights

€ -

€ 5,000

€ 10,000

€ 15,000

€ 20,000

€ 25,000

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Cost, in million EUR

EU ETS ETD RefuelEU

Costs: flights between EEA & third countries

€ -

€ 2,000

€ 4,000

€ 6,000

€ 8,000

€ 10,000

€ 12,000

€ 14,000

€ 16,000

€ 18,000

€ 20,000

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Cost, in million EUR

EU ETS Refuel EU EU ETS (2019-only CORSIA baseline)

Costs

€ -

€ 2,000

€ 4,000

€ 6,000

€ 8,000

€ 10,000

€ 12,000

€ 14,000

€ 16,000

€ 18,000

€ 20,000

Cost, in million EUR

Intra EEA/CH/UK flights

EU ETS ETD RefuelEU

€ -

€ 2,000

€ 4,000

€ 6,000

€ 8,000

€ 10,000

€ 12,000

€ 14,000

€ 16,000

€ 18,000

€ 20,000

Cost, in million EUR

Flights between EEA and third countries

EU ETS Refuel EU EU ETS (2019-only CORSIA baseline)

Cost per tCO ₂ (intra-EEA flights)

€ -

€ 50

€ 100

€ 150

€ 200

€ 250

€ 300

€ 350

€ 400

€ 450

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Cost, in million EUR

EU ETS (after free EUAAs and SAF claims) ETD RefuelEU