KLM and TUI face soaring costs as free EU emission rights end this year.

European airlines are entering a costly new era. For years, carriers received free carbon credits. These credits helped them manage environmental costs. That support is now ending quickly.

Starting this year, free emission rights are disappearing. The European Union is phasing them out. This follows the "polluter pays" principle. Airlines must now buy rights for every ton of CO2.

Rising Costs for Major Carriers

Financial impacts are already visible. KLM reported paying €25 million in 2019. By 2024, that cost hit €152 million. The airline expects even higher bills soon.

By 2030, costs could reach €325 million. This represents a massive budget shift. Airlines must find ways to pay. Most will likely pass costs to passengers.

The Push for Greener Fleets

Airlines are trying to lower emissions. TUI and Corendon are buying new planes. These modern aircraft are more efficient. They use much less fuel than older models.

TUI reports a 16 percent improvement. Newer engines burn fuel more cleanly. This reduces the number of credits needed. However, fleet renewal takes many years.

The Challenge of Sustainable Fuel

Sustainable Aviation Fuel (SAF) is a key solution. KLM is a leading buyer of SAF. This fuel comes from waste or hydrogen. It cuts carbon significantly compared to kerosene.

• SAF is currently very expensive.
• Supply remains extremely limited globally.
• Most flights still use 98% fossil fuel.

According to IATA, scaling SAF is difficult. Production must grow to meet demand. For now, it is often cheaper to buy credits.

Future Outlook

Economists warn that going green is hard. Electric planes are not ready yet. Batteries are too heavy for long flights. Hydrogen power is still in testing.

Airlines face a difficult financial path. They must balance high taxes with green investments. The era of cheap carbon is over. Flying in Europe is becoming more expensive.

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