In terms of European Union regulations, the business and general aviation sector experienced an intense year in 2023 with the adoption of new green financing rules and legislation commanding a sustainable aviation fuel (SAF) blending obligation in the bloc’s 27 member states plus Iceland, Liechtenstein, and Norway.
However, 2024 is poised to be even more demanding with nearly 10 parliamentary elections set to take place across the continent. Notably, a new EU Parliament is scheduled to be elected in June, and the appointment of the new EU Commission is slated for the fourth quarter of 2024.
“There are a few things we're still actively pursuing from a legislative regulatory perspective,” General Aviation Manufacturers Association (GAMA) v-p for European affairs Kyle Martin told AIN.
This includes further work to include business aviation in the EU’s sustainable investment criteria, known as the taxonomy, and the future adoption of a book-and-claim system in the ReFuelEU Aviation regulation to overcome the complexities in the SAF supply chain.
The EU developed the taxonomy to provide a clear definition of what is “sustainable” for investment and financing projects. Industry leaders are concerned that the exclusion of business aviation in the taxonomy could result in higher interest rates or dry up green financing altogether as banks and other investors will look at other projects to support.
“I think we lost the fight on the taxonomy case, but we are not giving up. We are now working directly with some of the banks to try and make sure they understand what business aviation is doing and their sustainability advances,” Martin noted. “We are also working with the European Commission’s DG Fisma [the commission department responsible for EU financial policy] to see if there's a different way of interpreting what they have proposed.”
The taxonomy criteria and disclosure requirements linked to the new activities are applying gradually from January 1, following their publication in the EU’s Official Journal in late November. Concurrently, the Commission has set up a request mechanism for stakeholders to submit suggestions on new activities that could be added to the EU taxonomy or on changes to existing activities. An expert group of the European Commission has already been tasked with developing a new batch of taxonomy criteria, including for the manufacturing of emergency aircraft.
“We understand from the Commission that if we meet certain standards, on—for instance—SAF usage, all of business aviation might still be included in the taxonomy,” said European Business Aviation Association (EBAA) COO Robert Baltus. EBAA is currently placing a strong emphasis on understanding the interpretation and implementation of the new taxonomy criteria and disclosure requirements, he said, expressing his view on the EU's decision to exclude the manufacturing and maintenance of business aviation aircraft from the list of green investments as “unfair.”
“If you want to move to newer and more efficient equipment or invest in change, you want to have access to capital at the best rates,” he explained.
EBAA and its members have been extremely active in environmental sustainability in Europe, Baltus maintained. “We want to make sure that the business aviation commitment to climate change is also reflected in the legislation and meets or exceeds the standards of whatever Europe comes out with,” he told AIN.
He feels that, despite the sector’s dynamic outreach and advocacy, still too many “don’t understand what we do and what the merits are of business aviation.”
EBAA's primary focus in its lobbying efforts this year will be to familiarize itself with the new members of the EU Parliament and the incoming Commission. “It’s going to take some time for us to see who we need to talk to and who will take which portfolio,” said Baltus. The task will be extensive, given that an increasing number of Commission departments are becoming involved in both business aviation and aviation as a whole. “We're very, very active always with DG Move [directorate-general for transport and mobility]. And there are some very smart and capable people there; we know them well. But I think that the playing field in the Commission has changed whereby we see that, for instance, DG Clima [directorate-general for climate action], DG Taxud [directorate-general taxation and customs union], and the DG for energy have taken a more front seat in some areas that really affect us. So we’ll have to monitor that as well as the transition to a new Commission and assuring that they appreciate what we do.”
Lobbying for SAF Book-and-Claim, against Taxes
GAMA and its fellow industry trade bodies are continuing their efforts this year to establish a fully-fledged EU-wide SAF book-and-claim mechanism. The ReFuel regulation has now entered into force, with the first SAF mandates applying from Jan. 1, 2025.
The text, however, incorporates an SAF flexibility mechanism which, among other things, requires that the European Commission by July 1 draft a proposal to the EU member states and the European Parliament on how an SAF book-and-claim system could be integrated into the ReFuel regulation. The Commission has tasked a consultancy to work on the file. “We are actively following that and working with other stakeholders, including the fuel suppliers, to make sure we make a strong case for that,” said Martin. “So the process has started and we're gathering evidence from our members as to how we can make it clear to the Commission that a [SAF] book-and-claim is essential.”
Baltus named the full implementation of the Single European Sky (SES), a package of regulatory reforms to streamline Europe’s patchy air traffic management, as “the one file” EBAA wants the current Commission to complete before the end of its five-year term on October 31. “We've seen a lot of good work by some parliamentarians and the Commission on trying to make the SES work,” he remarked while refraining from confirming widespread concern the SES will never be fully implemented. “There's a lot of skepticism because it's been taking so long and some key member states still prefer to protect their own ANSP [air navigation service provider] over the environment. There is a solution to reduce CO2 by up to 10 percent. The member states that are attacking the industry for the CO2 it emits are the same member states that block the SES. It is extremely frustrating.” Progress, however, is unlikely. Negotiations on the SES2+ proposals—which were proposed by the Commission in 2013—between representatives of the Parliament, the Council (which represents the member states), and the Commission were deadlocked all of last year; Belgium, which currently is holding the six-month rotating Council presidency, has not put the topic on the agenda.
Another challenging topic that both EBAA and GAMA, along with their members, will closely monitor in 2024 revolves around curbing the proliferation of aviation taxes at both EU and national levels. The European Commission aims to eliminate the current tax exemption on kerosene throughout the EU as part of its proposal to revise the Energy Taxation Directive (ETD) and achieve the objectives outlined in the Green Deal. Achieving the proposal's approval requires unanimity among the 27 member states, but discussions have stalled, with some governments opposing the measures. But, as Martin pointed out, while some member states reject the idea of introducing EU-wide taxation on aviation fuel, many are simultaneously imposing various forms of new aviation taxes at the national level. Portugal, for instance, in July expanded its carbon tax on passengers departing from the country’s airports to include non-commercial business jet flights.
“What we find particularly objectionable is the notion of governments imposing taxes on kerosene or carbon without any commitment to reinvest the revenues in the decarbonization of aviation,” Martin asserted. “Charging the industry for its climate pollution and then not actively supporting efforts to decarbonize the industry doesn't make any sense. Whether it's SAF, electric propulsion, or hydrogen propulsion, these initiatives require massive investments.”
Addressing the EASA Resources Gap
One more regulatory issue at the forefront of GAMA's agenda for current and future EU decision-makers involves formulating essential policy and legislative measures to expedite the advancement of electric aviation in Europe. This entails ensuring augmented public funding for the EU Aviation Safety Agency (EASA). “EASA has done a very good job of working together with industry, developing regulations for companies that are actively developing electric aviation solutions and helping educate member states to develop infrastructure,” Martin observed. “Europe is actually in a good place [but only] in some ways,” he said, warning that there's a concern about the limited financial and human resources in the Cologne-based agency. This constraint could potentially hinder the efficient execution of rulemaking and certification tasks, thereby slowing down the introduction of AAM aircraft.
Many of GAMA's members are making significant strides in their programs aimed at developing solutions for zero and low-emissions air mobility through battery-electric, hybrid-electric, and hydrogen fuel-cell powered flight. German aircraft manufacturer Volocopter is planning to offer the world’s first paying passenger services aboard an eVTOL aircraft during the Olympic Games in Paris this summer. “We are very much looking forward to that,” commented Martin.