Several airlines have launched a proposal for a SAF-BAM. While the acronym might sound like a party for aviation nerds, it stands for “Sustainable Aviation Fuel – Border Adjustment Mechanism”.
The first thing to note is that word “sustainable” there is doing a lot of heavy lifting, as most fuels that the aviation industry considers as “SAF” actually do great harm to biodiversity. However, this blog won’t focus on which types of alternative fuels are really sustainable, you can read about that elsewhere. This blog is all about the current buzzword that all policies must be measured against today in Brussels: competitiveness.
What does the aviation industry mean by competitiveness?
It’s interesting how we often just accept the industry’s definition of competitiveness as a given. But it’s actually a really narrow interpretation of “competitiveness” that puts aviation at the heart of Europe’s economy. This argument falls short on two fronts.
Firstly, the airline definition of competitiveness is synonymous with the short-term profits of legacy carriers. But profitability and competitiveness are not the same, and it is not the case that, as the sector seems to claim, any extra cost to airfares amounts to a loss of market share through ‘carbon leakage’. In the instances where this is a problem it can be addressed with targeted, not blanket measures.
And second, aviation may play some role in Europe’s competitive tourism industry, but this is not true across the board, and increased air travel may even have negative economic impacts as some areas of Europe have tourism deficits.
We must view competitiveness through a holistic lens
More importantly though, this narrow view ignores the broader competitiveness of the European economy. We know that climate change is damaging to almost every economic sector. From rising food production costs to the disruption of airports due to flooding or extreme heat, the toll of unpredictable weather is far more significant on European competitiveness than the operational shifts of a single industry.
Furthermore, long-haul aviation is a service utilised primarily by the most affluent, but the impacts of climate change are felt most acutely by the least wealthy in society – while first and foremost a humanitarian issue, the impact on productivity and market-competitiveness will be devastating. The strain on Europe’s resources compensating for flooding or extreme heat will be immense. We must look at European competitiveness through a more holistic lens: one that is grounded in climate science and social equity.
This leads to my second point. While these airlines are simultaneously asking for a new policy to require non-EU airlines to purchase certificates equivalent to the “sustainable” aviation fuel requirements of EU airlines, they are not supporting the extension of the EU Emissions Trading System (ETS) to international flights. Which is strange, as that much simpler policy is already on the books and is up for review in 2026 anyway; it could actually be the remedy airlines seek.
A simple remedy: bring back the ETS on international flights
An extended ETS would require all carriers to pay for emissions on all international flights departing from EU airports, with revenues mandated for climate action. In contrast, getting the EU to bring in an entirely new policy is always a heavier lift, and flies in the face of the wider industry-led push for “simplification” across the EU. Perhaps it’s that industry doesn’t actually mind regulation, but only when it protects profit margins. Interestingly, the policy that this proposal from the airlines is modelled on is the CBAM – the EU’s Carbon Border Adjustment Mechanism which was originally designed to support the ETS as it applies to heavy industry across the EU.
Indeed, a strengthened ETS is the most effective way to bolster long-term competitiveness. The ETS automatically gives a massive competitiveness boost to sustainable technologies by bridging the cost gap between them and fossil fuels.
Moreover, Opportunity Green has estimated that EU Member States lost approximately €26 billion in revenue since 2012 by leaving international flights unregulated. Portions of these funds could be ringfenced and reinvested into truly sustainable fuels and cutting-edge technologies developed in Europe and supporting new European technological and industrial competitiveness.
ETS revenues are also required to be used for climate action, but this is only fair – it goes some way to internalising the currently externalised costs of climate change caused in part by legacy airlines. But perhaps it’s this that is leading the airlines to call for a SAF-BAM, but not support the ETS? The industry should receive portions of these funds but as a complement to, not a substitute for, investing in its own sustainable future – and evidence suggests to date the aviation industry is not really investing in its sustainable future.
This is why the Skies and Seas Hydrogen-fuels Accelerator (SASHA) Coalition, a group of front-runner businesses developing the technologies needed to decarbonise aviation and shipping (facilitated by Opportunity Green), supports the extension of the ETS to all international flights.
So rather than rushing to design a new policy, we could instead look at the tools that are already on the table and where we can use them. And it’s important to note as well that the ETS on international flights was originally suspended so that there could be a global agreement on how to regulate these flights. And a global agreement was indeed put in place, so environmentally ineffective that the Trump administration reportedly supports it.
It’s time for EU policymakers to take a step back and look at the wider EU economy and wider EU competitiveness. No new complicated policy is needed: simply bring back the ETS on international flights!