"All the parties involved in Norwegian aviation must share responsibility to reduce greenhouse gas emissions. It is extremely good news that it will be possible to achieve a 30% cut in emissions thanks to large-scale investments in sustainable biofuels. The increase in production would also create new businesses and jobs in Norway", said Dag Falk-Petersen, CEO of Avinor.
Cutting emissions—if politicians are willing
At the moment, very little sustainable biofuel is produced on a global scale and the small amount available is not priced competitively. This means that achieving the target of a 30% blend, and the corresponding cut in emissions, would only be possible with the help of public funding.
"The authorities and politicians will have to facilitate large-scale investment in the commercial production of biofuel in Norway, with financial incentives that work. The environmental charges currently paid by the airlines would have to be used for activities that benefit the climate. This would allow us to create a commercial market for the production of biofuel for aviation as quickly as possible. The sustainable biofuel would also have to go to those sectors of the aviation industry which currently have no other technological alternatives", said Torbjørn Lothe, Director General of the Federation of Norwegian Aviation Industry.
The Rambøll report outlines two detailed models that could finance the production of sustainable biofuel for aircraft in Norway. This is how the first would work:
- The airlines continue to pay the same charges as they do now
- This money goes into a fund
- The airlines subscribe to the fund
- The fund pays the additional costs required to blend the biofuel into the mix
- Producers sell through contracts signed with the airlines
An alternative model is for a similar fund to be responsible for drawing up purchase agreements for biofuel on behalf of the airlines. The fund could initiate a tender process and invite bids to supply a given number of litres of fuel for a specified period. The fund would achieve economies of scale and better contracts than if the airlines worked independently.
"The fund system could help the Norwegian aviation industry to reduce greenhouse gas emissions by 30% by 2030. It would also have a knock-on effect in terms of emissions trading allowances, and would achieve reductions in other sectors. We have outlined the options, and now it is up to the authorities and politicians to turn the aviation industry’s green initiative into reality", said Lothe.