EU's green fuel mandate costly with little environmental gain, says IATA
'The idea that you're buying sustainable fuel and then transporting it to use in Europe isn't the right way to do it, because you're clearly increasing the carbon footprint of that fuel as a result of the transportation costs,' IATA's director-general Willie Walsh said at a media roundtable in Singapore.
IATA estimated in June that production of SAF, which is considered a low-carbon replacement for traditional jet fuel, is expected to reach 2 million metric tons, or 0.7% of airlines' fuel consumption, in 2025.
'Mandating the use of a product that isn't available doesn't lead to any environmental benefit,' Walsh said, adding that fuel companies that have an obligation to produce SAF are also increasing the cost of traditional jet fuel.
By IATA's assessment, he said 'the cost that they're charging is way in excess of the actual cost of the limited supplies of sustainable fuel.'
'The EU in effect has facilitated monopoly suppliers to increase prices with no environmental benefit,' said Walsh, adding that the region needs to re-evaluate its SAF targets.
Under the ReFuelEU Aviation requirement, airlines need to have a 6% SAF blend in their jet fuel usage by 2030. The EU is offering some subsidies for SAF purchases by airlines, Reuters reported in June.
On the supply front, at least five SAF projects in Asia, outside of China, have started up or are earmarked to start production this year, targeting exports regionally and to Europe. Singapore is among key exporters of the green fuel to the EU.
Walsh also questioned the use of palm oil as a means to produce sustainable fuel.
'I think that you could argue there is sustainable palm oil and there is palm oil that wouldn't be considered sustainable, and I think in some parts of the world there it's too black and white,' Walsh said.
We need to have a much more 'nuanced approach' to the usage of palm oil as a feedstock and 'much more detailed assessment of the sustainability of the feedstock', he added. - Reuters
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
2 hours ago
- The Star
Oil holds decline with trade, Russia curbs in focus
SYDNEY: Oil was little changed after its first weekly drop this month, with the focus on US trade deal progress – including with the European Union (EU) – and the bloc's efforts to curb Russian energy exports. Brent crude held near US$69 a barrel after falling 1.5% last week, while West Texas Intermediate was above US$67. EU envoys are set to meet as early as this week to formulate a plan for measures to respond to a possible no-deal scenario with US President Donald Trump, whose tariff negotiating position is seen to have stiffened ahead of an Aug 1 deadline. Late last week, the 27-nation bloc agreed to a lower price cap for Moscow's crude as part of a package of sanctions against Moscow. The measures include curbs on fuels made from Russian petroleum, additional banking limitations and a ban on a large oil refinery in India and a few Chinese entities. The United Kingdom joined the EU efforts. Beijing yesterday protested the EU sanctions and said it will take necessary measures to resolutely 'safeguard the legitimate rights and interests of Chinese firms and financial institutions'. China and India became the main buyers of Russian crude when global flows were reshaped following Moscow's 2022 invasion of Ukraine. The shipments have so far not been impeded by Western restrictions on supplies from Moscow. 'The fact that the United States has yet to support the new EU price cap will obviously make it hard to enforce,' said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. 'However, (last) Friday's EU ban on imports of petroleum products made from Russian crude will add to the tightness of products in the West.' Oil has trended higher since early May, but Brent is still down about 7% this year as Trump ratchets up his trade war and the Organisation of the Petroleum Exporting Countries and its allies relax supply curbs. — Bloomberg
The Star
2 hours ago
- The Star
Oil prices inch down on expected minimal sanctions impact
LONDON: Oil prices dipped slightly on Monday, with the latest European sanctions on Russian oil expected to have minimal impact on supplies while U.S. tariffs ensure demand concerns remain. Brent crude futures dropped 20 cents, or 0.3%, to $69.08 a barrel by 1100 GMT after settling 0.35% down on Friday. U.S. West Texas Intermediate crude eased by 6 cents, or 0.1%, to $67.28 after a 0.3% decline in the previous session. The European Union on Friday approved the 18th package of sanctions against Russia over the war in Ukraine, which also targeted India's Nayara Energy, an exporter of oil products refined from Russian crude. "The latest round of EU sanctions aren't necessarily going to change the oil balance. That's why the market is not reacting much," said Harry Tchiliguirian at Onyx Capital Group. "Russians have been very good at circumventing these kinds of sanctions." Kremlin spokesperson Dmitry Peskov said on Friday that Russia had built up a certain immunity to Western sanctions. The EU sanctions followed U.S. President Donald Trump's threats last week to impose sanctions on buyers of Russian exports unless Russia agrees to a peace deal within 50 days. ING analysts said the part of the package likely to have an impact is the EU import ban on refined oil products processed from Russian oil in third countries, though it said it could prove difficult to monitor and enforce. Iran, another sanctioned oil producer, is due to hold nuclear talks with Britain, France and Germany in Istanbul on Friday, an Iranian Foreign Ministry spokesperson said on Monday. That follows warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran. In the U.S., the number of operating oil rigs fell by two to 422 last week, the lowest total since September 2021, Baker Hughes said on Friday. U.S. tariffs on European Union imports are set to kick in on August 1, though U.S. Commerce Secretary Howard Lutnick said on Sunday that he was confident the United States could secure a trade deal with the bloc. "Tariff concerns will continue to weigh in the lead up to the August 1 deadline, while some support may come from oil inventory data if it shows tight supply," said IG market analyst Tony Sycamore. "It feels very much like a $64-$70 range in play for the week ahead." Brent crude futures have traded between a low of $66.34 a barrel and a high of $71.53 after a ceasefire deal on June 24 halted the 12-day Israel-Iran war. - Reuters
New Straits Times
2 hours ago
- New Straits Times
S&P 500 and Nasdaq notch record high closes
NEW YORK: The S&P 500 and the Nasdaq notched record high closes on Monday, lifted by Alphabet and other megacaps ahead of several earnings reports this week, while investors bet on potential trade deals to blunt economic damage from the Trump administration's global tariffs. Google-parent Alphabet rallied 2.70 per cent ahead of its quarterly report on Wednesday. It and Tesla, also reporting on Wednesday, kick off earnings from the so-called "Magnificent Seven", and their results may set the tone for other heavyweight companies reporting in the next several days. Tesla dipped zero point three five per cent, while Apple gained zero point six two per cent and Amazon rose 1.43 per cent, both lifting the S&P 500 and Nasdaq. Verizon rallied over four per cent after the telecommunications company boosted its annual profit forecast. Analysts on average expected S&P 500 companies to report a 6.70 per cent increase in earnings for the second quarter, with Big Tech driving much of that gain, according to LSEG I/B/E/S. "So far, companies that have reported have, in general, met or beat guidance from the prior quarter, and we haven't seen any degradation either in corporate profits or consumer spending," said Tom Hainlin, national investment strategist at US Bank Wealth Management in Minneapolis. With US President Donald Trump's August 1 tariff deadline approaching, the S&P 500 is up about eight per cent year to date, with investors betting the economic damage from tariffs will be less than feared. US Commerce Secretary Howard Lutnick said on Sunday he was confident the United States could secure a trade deal with the European Union, even as EU members explored possible countermeasures against the United States. Trump has threatened 30 per cent tariffs on imports from Mexico and the EU, and sent letters to other trading partners, including Canada, Japan and Brazil, setting tariffs ranging from 20 per cent to 50 per cent. The S&P 500 climbed 0.14 per cent to end the session at 6,305.60 points. The Nasdaq gained 0.38 per cent to 20,974.18 points, while the Dow Jones Industrial Average declined 0.04 per cent to 44,323.07 points. Seven of the 11 S&P 500 sector indexes rose, led by communication services, up 1.90 per cent, followed by a 0.60 per cent gain in consumer discretionary. Volume on US exchanges was relatively heavy, with 19.70 billion shares traded, compared to an average of 17.70 billion shares over the previous 20 sessions. The S&P 500 has gained about seven per cent in 2025, while the Nasdaq has climbed almost nine per cent. Investors focused on how tariff uncertainty is impacting the US economy will scrutinise jobless claims data and the July business activity report, expected on Thursday. They will also watch a speech by Federal Reserve Chair Jerome Powell on Tuesday for clues about when the Fed might cut interest rates, especially after mixed inflation signals last week. Traders have largely ruled out a July rate cut, and they now see a greater than 50 per cent chance the Fed will cut by its September meeting, according to CME Group's FedWatch tool. Declining stocks outnumbered rising ones within the S&P 500 by a 1.7-to-one ratio. The S&P 500 posted 17 new highs and nine new lows; the Nasdaq recorded 97 new highs and 56 new lows.
