Can an aircraft be a ‘green’ investment? Intuitively, most people will probably say no. Yet the answer to this question in Brussels is not yet clear.
Within the European Commission, opinions on this are divided, according to Reuters news agency. And according to proposals that have now been made by a special advisory board of the European Commission, aircraft could in some cases indeed be labeled ‘green’. In fact, the majority of the aircraft to be built: 90 percent of the aircraft that Airbus now has on order would qualify, according to environmental organization Transport & Environment (T&E) Friday based on own calculations.
Although these aircraft from Airbus, the largest aircraft manufacturer in the world, are slightly less polluting than older models, they still fly “almost exclusively” on fossil fuels, according to T&E. Airbus did not respond to a request for comment on Friday. Aviation is estimated to be responsible for about 2 to 3 percent of global CO emissions2.
‘Clear definition’
What counts as green is determined in Europe by the so-called taxonomy, a kind of handbook containing all economic activities that are regarded as sustainable. Because, Brussels thought, a “clear definition” of sustainable was urgently needed. The idea is that the taxonomy directs more investments to sustainable destinations – thus contributing to the achievement of the Paris climate goals. The taxonomy has now partially entered into force.
Because large investors increasingly care about their investments being green, or at least part of it, companies want to be green too. If, according to the taxonomy, you are not that as a company, then you are also less attractive to investors, is the idea.
Aircraft are not (yet) to be found in the current taxonomy – airports are, by the way, under the heading ‘low-carbon airport infrastructure‘. But the taxonomy is not a static thing, it is sometimes revised.
Last year, the Platform on Sustainable Finance, which advises the European Commission on the taxonomy advised to include aircraft, and then specifically aircraft that emit nothing – they do not yet exist – and aircraft that ‘best in class‘ are. According to Transport & Environment, aircraft quickly fall into that category: if they are slightly more efficient than older generations of aircraft. Pure greenwashing, says T&E.
The aviation industry thinks otherwise: they do deserve a spot on the list, they think. They are doing their best for that: aviation lobby groups have sent letters to the Commission this month urging it. Keeping them out of the taxonomy will hamper “the industry’s efforts to decarbonize,” read one of the letters Reuters saw. Also Airbus considers it “essential” that airplanes enter the taxonomy, the company told the Financial Times.
Credibility
No agreement has yet been reached within the European Commission, Reuters wrote two weeks ago. While some European Commissioners would be in favor of classifying certain investments in aviation as green, others do not want the sector included in the taxonomy at all. There are fears that the inclusion of aviation will undermine the green content of the document even further.
The idea was that the taxonomy would become a gold standard, an authority that would finally put an end to the discussion about what constitutes sustainability. But even before it came into effect, there was a lot of criticism last year about the proposal to include gas and nuclear energy for the time being.
According to the Commission, both will still be needed in the energy transition in the near future and therefore deserve a green label under certain conditions. But critical member states and also parties in the financial world fear for the credibility of the taxonomy. In the end, gas and nuclear energy were included, although there are still two lawsuits pending to undo this. This history puts the Commission in a difficult position: every addition will be assessed with extra scrutiny.
A version of this article also appeared in the newspaper of February 18, 2023