Lufthansa is adding up to €72 to ticket prices to pay for sustainable fuel

Lufthansa is adding an environmental charge to its ticket prices. The German airline group says the funds are needed to comply with EU regulations on reducing emissions.

A fee of up to €72 will be added to fares to offset the cost of introducing sustainable aviation fuels (SAFs) and other carbon-cutting initiatives, the group says.

The fee will come in on flights from 1 January 2025.

Lufthansa is one of the first in Europe to introduce a fee like this but it could be a sign of things to come from other airlines.

Which flights will the environmental charge be added to?

Airlines have warned for years that the cost of introducing more expensive SAFs will impact ticket prices. Now Lufthansa is the first in Europe to introduce what it calls an “Environmental Cost Surcharge”.

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Fares will increase by between €1 and €72 depending on the type of ticket for flights departing from all 27 EU member states as well as the UK, Norway and Switzerland.

Tickets booked from today (26 June) for journeys starting 1 January 2025 will have the new fee applied to them.

Airlines that are part of the Lufthansa group include Lufthansa, Eurowings, Austrian, Swiss, Brussels Airlines and the newly launched Lufthansa City Airlines.

Why do airlines say an environmental fee is needed?

Lufthansa says the environmental surcharge is intended to “cover part of the steadily rising additional costs due to regulatory environmental requirements”.

This, the airline adds, includes the initial quota for a 2 per cent blend of SAFs in fuel for departures from EU countries from 1 January 2025. Also other green adjustments such as the EU Emissions Trading System (EU ETS) alongside other regulatory environmental costs like carbon offsetting.

The aviation industry is one of the EU’s fastest-growing sources of greenhouse gas emissions. It is also one of the toughest to decarbonise with limited alternative power sources for flights. Some European countries are instead forcing their citizens to take fewer flights by introducing bans on short-haul flights.

SAFs are seen as one of the most viable ways to reduce emissions from flights. As part of its Fit for 55 climate programme, the EU has set mandatory SAF quotas for airlines that will gradually increase from 2 per cent in 2025 to 6 per cent in 2030 and rise to 70 per cent in 2050.

They are currently up to five times more expensive to produce than traditional jet fuel, however. Earlier this year, industry body Airlines for Europe (A4E) warned that production was far below the levels needed to keep up with the EU requirements.

In 2023, SAF production worldwide was just over 600 million litres. This year the International Air Transport Agency (IATA) expects that to triple to over 1.8 billion litres but this is still just 0.53 per cent of aviation’s global fuel requirements. Limited supply keeps costs high, according to the industry body.

A4E said EU policymakers needed to “supercharge” production to ensure Europe can “future-proof flying”, be at the forefront of the sustainable aviation transition and support decarbonisation.

Which other airlines have introduced environmental levies?

Lufthansa is one of the first European airlines to introduce fees linked to upcoming EU SAF requirements but industry experts expect others are likely to follow suit.

Air France-KLM was the first major airline group to introduce a SAF contribution charge in January 2022, adding up to €12 to business class tickets and €4 to economy fares at the time.

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Some countries are taking a different approach. Singapore’s government announced earlier this year that it would be introducing a green fuel levy on all flights from 2026 to pay for the transition to SAFs.

It will vary depending on the type of ticket with longer journeys seeing a bigger increase. The country’s Transport Minister Chee Hong Tat said that the government is aiming for all departing flights to use 1 per cent SAFs from 2026, rising to between 3 and 5 per cent by 2030.