All of these activities are anchored in the first two objectives (climate change mitigation and climate change adaptation) and especially include:

  • the manufacturing of aircraft and associated components that aim to improve energy efficiency and reduce emissions,

  • the development and operation of airports, especially with regard to energy efficiency, the use of renewable energy, and the minimisation of environmental impacts,

  • air transport services that include efficient flight routing and management to reduce fuel consumption and emissions, and

  • the maintenance and repair of aircraft with the goal of increasing efficiency and reducing emissions.

EU-Taxonomy

The EU Taxonomy is a classification system that defines which investments can be categorised as environmentally sustainable. It is part of the European Green Deal and aims to promote the financing of sustainable growth and to support the transition to a climate-neutral economy.

To qualify as sustainable within the meaning of the EU Taxonomy, the economic activities in the aviation sector must meet certain technical assessment criteria that pertain above all to reducing greenhouse gas emissions and to adaptation to climate change. In addition, the “do no significant harm” criteria must be taken into account and ensure that the activities are not materially detrimental to other environmental objectives. Minimum social standards must also be met.

It is important to note that the EU Taxonomy is designed as a dynamic instrument that will continue to be developed and will be updated regularly to account for new scientific findings and technological developments. This means that the specific criteria and covered activities may change over time. It is possible that economic activities that are currently Taxonomy-compliant may be replaced in future by technological advances and lower-emission alternatives and will thus no longer qualify as sustainable within the meaning of the EU Taxonomy.

The classification as a sustainable, Taxonomy-compliant economic activity is above all intended to facilitate better financing options for more climate-friendly aircraft and more sustainable aviation fuels, and in this way to support the transformation of the aviation industry in the sense of reducing emissions.

Passenger and freight air transport

Let’s take a closer look at the economic activity “passenger and freight air transport”: It contains the purchase, financing and operation of aircraft including transport of passengers and goods and is assigned to objective 1: climate change mitigation, as a transitional activity. This term describes activities where there are currently no technically and economically feasible low-carbon alternatives and where their GHG emissions are considerably lower than the sector or industry average.

The technical screening criteria that sustainable passenger and freight air transport must meet include the use of aircraft with zero emissions or aircraft that were acquired before 11 December 2023 and that comply with certain environmental criteria (until 31 December 2029).

In addition, aircraft acquired after this date may only be used if an older, non-compliant aircraft is withdrawn from the fleet at the same time, subject to certain criteria pertaining to the replacement ratio and airworthiness. At the same time, criteria apply that are intended to ensure that no significant harm is done to any of the other Taxonomy objectives.

In the case of sustainable passenger and freight air transport, objectives 2: climate change adaptation, 4: circular economy, and 5: pollution prevention and control (e.g. measures for avoiding waste in the utilisation phase and waste handling at the end of the service life to make recycling and re-use easier) are relevant.

Magdalena Quell, Raiffeisen Capital Management

Author

Magdalena Quell, Product and Project Manager, Raiffeisen Kapitalanlage GmbH

This content is only intended for institutional investors.

More