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BRUSSELS: The European Commission has asked 20 European airlines to respond to greenwashing charges by the European Consumer Association (BEUC) in relation to their marketing of Sustainable Aviation Fuel.

Alerted by BEUC in 2023, the Commission and the Network of Consumer Protection Cooperation Authorities (CPC) have now asked the airlines to respond by May 30 to the following “misleading practices”:

• creating the incorrect impression that paying an additional fee to finance climate projects with less environmental impact or to support the use of alternative aviation fuels can reduce or fully counterbalance the CO2 emissions;

• using the term “sustainable aviation fuels” (SAF) without clearly justifying the environmental impact of such fuels;

• using the terms “green”, “sustainable” or “responsible” in an absolute way or use other implicit green claims;

• claiming that [an] airline is moving towards net-zero greenhouse gas emissions (GHG) or any future environmental performance, without clear and verifiable commitments, targets and an independent monitoring system;

• presenting consumers with a “calculator” for the CO2 emissions of a specific flight, without providing sufficient scientific proof on whether such calculation is reliable and without the information on the elements used for such calculation;

• and presenting consumers with a comparison of flights regarding their CO2 emissions, without providing sufficient and accurate information on the elements the comparison is based on.

The 17 airline identified by BEUC are Air Baltic, Air Dolomiti, Air France, Austrian, Brussels Airlines, Eurowings, Finnair, KLM, Lufthansa, Norwegian, Ryanair, SAS, SWISS, TAP, Volotea, Vueling and Wizz Air. The Commission has declined to identify the remaining three carriers.

“It is great news that authorities from across Europe acknowledge consumers have been fooled by airlines’ greenwashing,” commented Monique Goyens, BEUC director general. “It is unacceptable that airlines have freely lured consumers into offsetting their flight’s emissions, sometimes at a high price. One can never be sure that the trees planted to compensate a flight’s high emissions will capture the carbon back into the ground – if they are planted at all.”

Emissions from aviation are a significant contributor to climate change and they are growing faster than for any other mode of transport. CO2 emissions from flights within Europe have increased 27.5 percent between 2013 and 2019, while other sectors have reduced emissions.

As a result, the climate impact of all flights departing from a European Union (EU) airport have grown from 1.4 percent of total EU emissions in 1990 to 3.7 percent today.

If unchecked, global aviation emissions are expected to double or triple by 2050, and in doing so consume up to 25 percent of the global carbon budget under the Paris Agreement 1.5˚C goal.

Transport & Environment (T&E), a campaigner for cleaner European transport, has published a guide for companies buying so-called Sustainable Aviation Fuel (SAF) to reduce their ecological footprint.

The NGO warns there are many aspects corporate buyers should consider before purchasing SAF, and suggests not all of what’s on offer is what it seems. Not all SAF is equally sustainable so companies should avoid purchasing crop-based biofuels at all costs and prioritise e-kerosene over other types of biofuels. 

The origin of SAF matters: imported SAF leads to additional Greenhouse Gas (GHG) emissions due to transportation while regulations vary from one geographical area to another. There are also several standards to calculate emissions reductions, which complicates analysis and reporting. 

The SAF price premium ranges widely. It is currently at least twice the price of conventional aviation kerosene but this is likely to decrease over time. Also, buying SAF does not mean flying on SAF. The fuel is not physically available at all airports, which is why most corporate schemes rely on book-and-claim systems. 

T&E says there are two main types of SAF: Biofuels, derived from biomass, and e-fuels synthesized from hydrogen combined with a source of carbon. If produced correctly (with green hydrogen derived from additional renewable electricity and carbon captured from the air), e-kerosene has the potential to be close to CO2-neutral.

The sustainability of biofuels is questionable because it is only available in very limited quantities and crop-based biofuels compete with food security. Waste-based biofuels, derived from used cooking oil, animal fats, or forest residues, are more sustainable but there is limited availability, competing uses in other industries, and fraud risks.

As a result, most airlines or fuel producers already offering the possibility to purchase SAF actually offer the purchase of its environmental attribute via a Scope 3 emissions credit that covers all other indirect emissions that occur in the upstream and downstream activities of an organisation - and not the fuel itself.

The credit can be achieved via so-called book and claim systems already used for renewable electricity. Electricity providers can enter or ‘book’ the electricity they have produced in their systems and customers can ‘claim’ the green energy they have bought. Consumers will then receive a certificate stating the amount of renewable electricity they paid for.

More and more airlines have launched programmes to allow customers pay the SAF premium via voluntary ‘green fares’ or opt-in options to ‘purchase’ SAF during the booking process.

Lufthansa launched a passenger SAF fare in 2023 although only 20 percent is used to reduce particular flight emissions while the remaining 80 percent are offset by funding climate protection projects, the effectiveness of which has been increasingly questioned. So the airline is effectively using passenger guilt to pay for the cost of their offsets.

Meanwhile the SAF fuel does not go into a specific aircraft flight but to the fuel system at an airport close to a SAF production facility.

While several SAF book and claim systems are being developed by the private sector, there is still no official globally accepted reporting system. T&E says the European Commission will have to assess the feasibility of a harmonized book and claim system by July 2024.

The BEUC action follows a March 2024 ruling against KLM for misleading customers brought by Dutch environmental group Fossielvrij.

The Amsterdam district court ruled that a KLM marketing campaign suggesting that flying can be, or is becoming, sustainable and its "offsetting" products reduce or compensate for the climate impact of flying was misleading and therefore unlawful.

KLM’s claim that it was committed to the Paris Agreement was also found to be unlawful with its emission reduction targets painting “too rosy a picture” given the limited measures it was deploying.

According to Fossielvrij campaigner Hiske Arts, ”KLM’s green marketing creates a misplaced trust that even if you are worried about the climate crisis, you can board a plane reassured you are not harming the planet. The judges have put an end to this harmful strategy to lull the public and politicians to sleep.”

The Court also noted the term “sustainable” to describe SAF was not concrete enough to be promoted as a promising solution to aviation’s emissions. “At the moment, SAF's share in total fuel consumption, and hence CO2 emissions reduction, is still very limited. A more substantial share can only be expected in the distant future, and thus uncertain. The expression is therefore misleading,” it declared.

“The fact that European consumer protection authorities are calling on airlines to get their act together shows there’s a wind of change,” concluded Goyens. “Greenwashing is no longer acceptable, and the fact that aviation is one of the most highly polluting sectors makes it even more intolerable.”

BRUSSELS: Following the introduction of the world’s first carbon market for maritime shipping in January, a study by Transport & Environment (T&E) suggests container shipping companies are making significant profits from charging customers a surcharge to offset their emissions.

This year operators will only have to pay 40 percent of the offset cost of their emissions – increasing to 70 percent in 2025 and 100 percent the following year.

T&E looked at 565 journeys of 20 different ships from each of Europe’s four box companies: Maersk, MSC, CMA CGM and Hapag-Lloyd.

Based on an official carbon price of €90, T&E estimates Maersk will average a €60,000 surcharge per voyage this year followed by MSC (€25,000), Hapag Lloyd (€23,000) and CMA CGM (€14,000).

On a single journey from China to Germany the watchdog says Maersk is likely to make €325,000 in surcharge profits while Hapag Lloydʼs most profitable single journey will be €204,000, MSCʼs €125,000 and CMA CGMʼs €139 000.

“Shipping giants are ripping off customers by using environmental measures as a way to charge customers more. Whether it is disruption in the Red Sea or a new carbon price, shipping companies always win,” comments T&E Shipping manager Jacob Armstrong. “Southern European governments are warning that the ETS will cost them business by ships evading their ports, but why would they if they’re making money from it?”

T&E notes ETS costs are also much less than levies imposed in response to attacks by Houthi militants on Red Sea trade. The organisation calculates CMA CGM’s ETS costs on routes from Asia to Europe are less than one percent of a total container cost compared to the Red Sea surcharge of nearly 18 percent.

“The Red Sea disruption is pretty much as bad as it gets and global trade still hasn’t ground to a halt. The ETS is peanuts in comparison. Cost is not a barrier to shipping decarbonisation when the most ambitious green measures would add just cents to most consumer goods,” Armstrong adds.

In its March 2024 update on global trade, the UN Conference on Trade and Development (UNCTAD) explains shipping is a highly international business. So a single attack on a vessel carrying consumer goods, food, medical items and industrial spare parts for several thousands importers and exporters has a worldwide impact:

“A typical (container) ship may be built in the Republic of Korea, crewed by Filippino seafarers recruited through a crewing agency based in Cyprus, owned by a German investment fund, technically inspected by an Indian classification society, registered under the flag of the Marshall Islands, insured by a protection and indemnity club in Norway, fuelled at a bunkering station in Singapore and operated by liner shipping company in Denmark.”

As geopolitical tensions continue to disrupt Red Sea and Suez Canal shipping routes and efforts to maintain water levels in reservoirs supplying the Panama Canal are expected to continue reducing transit volume this year, UNCTAD forecasts a rise in shipping costs “along with extended voyages and disrupted supply chains”.

COPENHAGEN: The Science Based Targets initiative (SBTi) says Maersk’s greenhouse gas emissions’ (GHG) targets will meet the Paris Agreement 1.5˚C pathway.

The validation is an industry first under SBTi’s new maritime guidance published in late 2022.

Maersk’s goal is to achieve net-zero GHG emissions for its entire business by 2040. The latest SBTi validation includes specific and absolute targets to reduce emissions from the company’s own operations (Scope 1 & 2) and across its supply chains (Scope 3).

The SBTi is a collaboration of the CDP (Carbon Disclosure Project), UN Global Compact, World Resources Institute and the World Wide Fund for Nature enabling businesses to halve emissions before 2030 and achieve net-zero emissions before 2050.

“The Science Based Targets initiative represents the highest standard for corporate climate targets,” noted Maersk COO Rabab Raafat Boulos. “We are committed to do our share but we cannot do it alone [as] we are dependent on, and working with, the ecosystem that we are part of, including customers, suppliers, industry peers and regulators.

“Importantly, there is a need for global regulations from the International Maritime Organization (IMO) to close the price gap between fossil and green fuels to secure a level playing field,” he added.

Maersk says almost 60 percent of its top 200 customers have committed to or set science-based targets, including their supply chains. The company describes its net-zero goal as reducing Scope 1, 2, and 3 emissions to zero, or to a residual level that is consistent with reaching net-zero emissions at the global or sector level.

Group revenue for 2023 was US$51.06 billion – down from US$81.53 billion in 2022. Profit before interest and tax was US$3.93 billion compared to US$30.86 billion the previous year.

“2023 was a transitional year following the extraordinary market boom caused by the pandemic. We secured solid financial results despite significantly changed circumstances and we are well positioned to manage the expected headwinds in 2024,” commented CEO Vincent Clerc. “The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results.”
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