Lufthansa introduces surcharge to offset rising environmental compliance costs

Germany-based Lufthansa Group is one of the first European airlines to introduce an environmental surcharge on fares in a bid to cover the rising costs of complying with environmental requirements. They include sustainable fuel quotas, emissions trading systems in Europe, and the carbon offsetting scheme for international aviation, the company said.

As part of the European Union’s Fit-for-55 legislative package, airlines will be required to apply a 2% mandatory blending quota for sustainable aviation fuel (SAF) from January 1, Lufthansa recalled, adding that the quota will increase to 6% in 2030, to 20% in 2035, and to 70% in 2050. “For the Lufthansa Group, this will lead to additional costs in the billions in the future,” the airline said.

Sustainable fuel alone will cost Lufthansa “billions in the future”

SAF is made from non-petroleum feedstocks and reduces emissions from air transportation. Another alternative that could help decarbonize the aviation industry is synthetic, or e-fuel, produced using renewable electricity. However, the option is not viable for Lufthansa as producing enough fuel for the airline’s needs would require half of Germany’s renewable electricity output, according to Carsten Spohr, the company’s CEO.

As for the EU Emissions Trading System (EU ETS), Lufthansa Group is subject to it for all flights within the European Economic Area (EEA), while additional obligations exist under the emissions trading systems of Switzerland (CH-ETS) and the United Kingdom (UK-ETS), the airline explained.

Under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), all emissions from aviation exceeding the baseline set by the International Civil Aviation Organization (ICAO) are offset by the purchase of emission certificates. For the years 2024 to 2035, it amounts to 85% of the emissions from 2019, Lufthansa said.

Lufthansa’s surcharge, of up to EUR 72 per ticket, apply to flights from January 1, 2025

Lufthansa Group’s environmental surcharge applies to all flights departing from the 27 EU countries as well as the UK, Norway, and Switzerland. In addition to Lufthansa, the group includes Austrian Airlines, Swiss, Eurowings, and Brussels Airlines.

The amount of the surcharge ranges between EUR 1 and EUR 72, depending on the flight route and fare. It is levied on all tickets issued from June 26, 2024 and applies to departures from January 1, 2025, Lufthansa said.

Another major European airline, Air France-KLM, was the first to introduce a SAF charge in 2022. According to Euronews, the charge hiked ticket prices by up to EUR 12 for business class and EUR 4 for economy class.