European airlines will miss green jet fuel targets, CEOs warn

By Joanna Plucinska, Julia Payne and Tim Hepher

BRUSSELS (Reuters) -The EU's requirement for 6% of the jet fuel used by its airlines to be sustainable by 2030 is impossible to meet because of the cost and scarcity of green fuels, airline CEOs warned on Thursday ahead of a meeting with the European Commission.

The chief executives of Ryanair, IAG, Lufthansa and Air France-KLM told an annual industry conference in Brussels that the requirements for sustainable aviation fuel were adding to regulatory burdens that risked European aviation falling behind global competitors.

"We urgently need an EU aviation strategy in order to have SAF at competitive prices ... unless action is taken now, the only realistic solution is to move the 2030 SAF mandate to the right," said Luis Gallego, the CEO of British Airways-owner IAG.

The head of industry group Airlines for Europe said regulatory costs had tripled between 2014 and 2024.

SAF costs three to five times more than traditional jet fuel and makes up only 0.3% of global jet fuel supply. European airlines are this year expected to use 2% of SAF in their jet fuel mix, with the mandate rising to 6% in 2030.

A Boston Consulting Group report published on Thursday found that airlines and airports are investing only 1% to 3% of revenue or budget allocation to SAF.

U.S. President Donald Trump's call for more fossil fuel investment is adding to pressure on the fledgling green fuel market.

Ryanair CEO Michael O'Leary said the oil majors - the biggest likely producers - were already cutting back their SAF programmes.

COMPETITIVENESS

The airlines said the European Union's sustainability rules created an unfair cost burden on them, giving an advantage to international carriers that don't have to meet sustainability mandates and can fly longer routes.

"Our market shares are going down not only to government-owned carriers in the East but also private competitors and some partners in the U.S.. European aviation is falling behind," Lufthansa CEO Carsten Spohr said.

As with the car sector, aviation could benefit from an easing of sustainability requirements, executives said.

"We all know we started with a Green Deal that now has been moved into a clean deal. And I think we also need a lean deal, said Spohr."

The European Commission proposed last month in its "Simplification Omnibus" to cut the burden of climate-related reporting but the focus was to relieve the pressure on small and medium companies.

(Editing by Mark Potter)