European politicians are planning legislation that requires airlines to use more sustainable fuel by 2030, but there's very little going around. One solution is to start building more production plants now, to create enough in time. But what Amex GBT's chief Paul Abbott wants to know is who's paying to build them?
The boss of the world’s biggest corporate travel agency has clashed with a top European politician over the best way to lower carbon emissions.
As the European Commission looks at rules that would require airlines to fill planes with a certain percentage of sustainable aviation fuel in the future, he argued there weren’t enough financial incentives to scale up the production of that fuel fast enough.
Paul Abbott, CEO of American Express Global Business Travel, said that 300 sustainable aviation fuel plants would need to be built, if the industry wanted to get to (as a practical example) 10 percent sustainable fuel by 2030.
The problem is that the production plants take five years to build, and cost $300 million each, he said.
Speaking at the Global Business Travel Association’s inaugural Sustainability Summit, held in Brussels on Tuesday, Abbott said the industry now needed to figure out how to find $90 billion, with a decision needed to be taken this year or next, in order to start building the plants in 2024 or 2025.
“That’s respectfully what I think we should be doing as an industry, and what we should be doing across the public and private sector is figuring out where do we get that $90 billion, and where are we going to build those production facilities,” he said. “And that will decarbonize large parts of the sector, of the industry.”
Abbott was responding to a question on stage as to whether fewer flights would help reduce carbon emissions, to which he said no because the overall business travel element wasn’t that big compared to leisure flights, while non-passenger related travel like military, air freight and private aviation also needed to be considered.
He argued to achieve net zero, you’d have to start with leisure travel, which would be difficult as flights continue to rebound.
“Our focus has to be scaling the solution that decarbonizes the entire industry — and for me that comes back to sustainable aviation fuel. We have a drop-in solution today that works … But we don’t have enough supply and production. We should be saying now, how do we achieve that,” he added.
Speaking during a previous on-stage interview, Mark Cuschieri, global head of travel at UBS and vice president of the Global Business Travel Association, said it was a challenge to get sustainable aviation fuel at scale.
“It requires investment, and the challenge for many (travel) buyers today is looking at the cost of travel (using the fuel) and looking at governments to incentivize and put concessions in place to ensure we can scale SAF,” he told Walter Goetz, head of cabinet for the transport commissioner at European Commission, during the on-stage interview.
Goetz replied: “Bringing sustainable fuel into market, it’s not a single solution. We have to force a blending mandate, first of all, so the regulatory frame would be every plane that refuels has, by a certain time, after 2026, 2030, in the European airports would have 2 percent, 5 percent SAF as drop-in fuel.”
The other part is bringing industry and stakeholders together, he continued.
“When it comes to the costs, there are regulatory possibilties to incentivize it, looking at the taxation system … that’s under negotiation. Member states have the possibility to subsidize the sustainable fuel.”
But during his panel appearance, Abbott later said: “Walter was saying we regulate and set the rules … but the problem with that is: you can set the rules, and then you can say we’re the regulator, we set the rules but then it’s up to member states and companies to pick up the baton, (but) you’ve got to create incentives with member states and corporations to pick up the baton and actually make it happen.”
Photo credit: The European Commission is planning rules that require airlines to fill planes with a certain amount of sustainable aviation fuel in the future. Joshua Sukoff / Unsplash