Business Aviation Law Blog : Boston Aviation Lawyer & Attorney : Harry Ekblom : Sullivan & Worcester Law Firm : FAA Regulation & Aircraft Transactions

Special thanks to Sullivan & Worcester's Van Hilderbrand and Ari Hoffman, environmental intern, for preparing this post.

In 2008, Boeing predicted that within three years biofuel-powered aircraft could be carrying passengers around the world (The Guardian UK). This month, that prediction came to fruition when on June 18, a Honeywell operated Gulfstream G450 became the first business jet powered by biofuel and the first aircraft to fly to Europe from North America using a 50% camelina derived biofuel and 50% petroleum-based jet fuel blend (WSJ). Camelina is a promising alternative fuel because it can be grown on marginal land in rotation with wheat acreage and therefore does not compete in the food chain. The aircraft used Rolls-Royce engines without making any modifications either to the aircraft or engines. Compared to a petroleum-based flight, the biofuel flight saved approximately 5.5 metric tons of net carbon dioxide emissions.

On June 20, Boeing fulfilled its prediction on the commercial scale. A Boeing 747-8F flight from Everett, Washington landed in Le Bourget, France becoming the first ever trans-Atlantic flight of a large commercial aircraft powered by a biofuel blend. The plane powered all four of its General Electric engines on a blend of 15% camelina-based biofuel mixed with 85% traditional kerosene. Importantly, like the earlier flight, the aircraft did not require modifications to run the biofuel blend.

Although biofuel technology has been around for a number of years, these flights herald a new beginning for large-scale adoption of greener jet fuels in the aviation sector. As this issue progresses, please check back to this blog for future posts.

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Special thanks to Sullivan & Worcester's Van Hilderbrand and Ari Hoffman, environmental intern, for preparing this post.

As a follow-up to our October 20, 2010 post entitled “Climate Change: International Regulation of GHG Emissions From Aircraft,” on June 6, 2011 the European Commission (“EC”) confirmed its earlier March 2011 announcement that the aviation sector will become the second-largest industry in Europe’s carbon Emissions Trading System (“ETS”), behind only power generation. The aviation sector is set to join the market on January 1, 2012, giving airlines an initial 213 million metric ton carbon dioxide (“CO₂”) limit in 2012 and a 208.5 million metric ton limit in 2013. European Union (“EU”) climate commissioner, Connie Hedegaard, states the reason for the aviation sector’s inclusion is that “emissions from aviation are growing faster than from any other sector, and all forecasts indicate they will continue to do so under business as usual conditions.” 

The EU’s carbon cap-and-trade system is the world’s largest, allowing businesses that exceed their CO₂ allowance levels to buy spare permits from companies that do not reach the limit, or else pay a fine. The fine for exceeding the CO₂ allowance level for the aviation sector will be 100 euros for every ton of CO₂ emitted above the limit. The EU is presenting the ETS as a “pollution ceiling” not a tax, stating that “airlines have the choice to reduce emissions or buy allowances.” Either way, the cost will be passed on to passengers. Lufthansa airlines has estimated that joining the carbon market will cost 350 million euros annually. The EC has estimated a rise in airline fares within Europe between 1.80 euros and 9 euros. In addition, the airline industry has estimated that the inclusion in the ETS will increase the cost of a roundtrip flight from New York to Brussels by 15 euros.

Last month, Steve Ridgway, Chairman of the Association of European Airline and chief executive of Virgin Atlantic along with Tom Enders, chief executive of commercial aircraft manufacturer Airbus warned that including the aviation industry in the emissions trading system would create a trade conflict with the world’s major economic and political players. International Airlines Group (“IAG”) chief executive Willie Walsh has voiced fears that Chinese, American and Russian governments will retaliate if forced to participate in the ETS starting next year. The ETS is already being challenged by the American Air Transport Association (“ATA”) in the European courts and Mr. Walsh fears more conflicts are to come. In response to the latest EC move, the head of the China Air Transport Association (“CATA”), Wei Zhenzhong, said: “I believe we have to take legal action.”

Despite the possible competitive disadvantage created for European airlines and harsh criticism from non-European airlines, the EU’s governing bodies “do not intend to back down” and insist that their plan to include the aviation industry in the ETS is entirely consistent with International Law. As this issue progresses, please check back to this blog for future posts.

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