Norway will make airlines use more environmentally friendly fuel from 2020

OSLO (Reuters) - Airlines operating in Norway must use more environmentally friendly jet fuel mixed with biofuel from 2020, according to an announcement by the Ministry of Climate and Environment on Thursday.

As part of Norway’s push to cut greenhouse gas emissions, the minority center-right government said the aviation fuel industry must mix 0.5 percent advanced biofuel into jet fuel from 2020 onwards, a move which will force airlines to use the more costly fuel.

“The government’s goal is that by 2030, 30 percent of the airline fuel will be sustainable with a good climate effect,” said the ministry.

This corresponds to around 6 million liters of what is also known as second-generation biofuels, a product of waste and leftovers, and cannot be based on palm oil, Norway’s Climate and Environment Minister Ola Elvestuen said in an emailed statement to Reuters.

Biofuels for aviation cost around two or three times more than regular jet fuel, according to a report by Norway’s environmental agency, the civil aviation authority and state-owned operator Avinor, he added.

However, as there is no functioning market for biofuels in aviation, the real prices are uncertain, said Elvestuen.

“According to the report, a quota obligation of 0.5 percent advanced biofuels can correspond to a price increase for the airlines of around 54 million Norwegian crowns annually,” he said.

This cost amounts to roughly $6.6 million.

Even though there are other initiatives and trials around the world, Elvestuen said Norway’s move to legislate biofuels use in aviation may be the first bill introduced worldwide on the topic.

“As far as we are aware, no other country has proposed legislation similar to the Norwegian plans,” said the minister.

Aviation biofuels, now produced in small volumes from renewable sources, are expected to play an important role in delivering the goal of carbon-neutral growth in airline CO2 emissions from 2020.

Airlines Norwegian Air and SAS were not immediately available for comment.

Editing by Elaine Hardcastle