Soaring jet kerosene prices and airspace closures caused by the U.S.-Israeli war on Iran are creating growing headaches for European airlines. The EU imports half of its jet fuel from the Persian Gulf, whose main exit point is the Hormuz Strait that’s currently blocked by Iran’s threat to hit any vessel that tries to pass it. As a result, jet fuel prices jumped to a 28-month high of $1,001.50 per ton in Europe, according to the specialized publication Argus, calling it a “record premium.” That puts airlines in a very difficult position, as they were able to recover from the Covid-era collapse of air travel thanks to cheap fuel. Presenting Lufthansa’s results for last year, the airline group’s CFO Till Streichert said on Friday that “low fuel costs had a positive effect. Our fuel costs fell by more than half a billion euro compared with the previous year.” Despite concerns over rising fuel prices, Lufthansa is confident that its fuel reserves will protect the airline from higher costs. But if gridlock at sea lasts, it could dry up the supply of kerosene while sending prices even higher. Fuel worries come on top of concerns that the war will also shut flight paths between Europe and Asia. The EU Aviation Safety Agency on Friday extended its request for airlines to avoid the airspace of 11 countries in the Gulf region including crucial air hubs like Dubai, Qatar and Kuwait as well as Iran, Iraq and part of Saudi Arabia. The original recommendation — issued on Feb. 28 when the U.S. and Israel attacked Iran — is now valid until March 11. “All-altitude capable air-defence systems, cruise and ballistic missiles and the use of air assets … make the entire affected airspace vulnerable to spill-over risks, misidentification, miscalculation and failure of interception procedures,” the EASA bulletin said. That recommendation leaves only a very narrow path for many airlines to fly between Europe and Asia — forcing them along Turkey’s northern Black Sea coast, then over Azerbaijan and the Caspian Sea. European carriers can’t fly over war-torn Ukraine and they’ve also been barred from Russian airspace since Moscow invaded Ukraine four years ago. However, Turkish, Chinese and other Asian competitors can still overfly Russia, creating growing competition problems for EU carriers. The Ukraine war closures already forced airline groups such as Lufthansa and Air France-KLM to reroute their long-haul flights to and from Asia — increasing fuel and staffing costs. Now, even that narrow passage across Azerbaijan is at risk after the country was reportedly targeted by a drone strike near the Iranian border. In response, the Baku government closed the southern half of the country’s airspace but left the rest available to airlines. “We continue to monitor closely the overall risk and threat situation in the region and its impact on the safety of airspace, including this event,” said EASA spokesperson Janet Northcote after an attack that Azerbaijani President Ilham Aliyev called an “act of terror” from Tehran.  The Iranian government denied responsibility for the strike.

BRUSSELS ― The EU is planning to spend as much as €16 million over the next four years to fly its top officials by private jet, according to a tender document. This is an increase of €3 million from the previous four-year period and is 50 percent higher than the period before that, which ended in 2021. “In a time where ordinary people can’t afford traveling during their summer holidays, this sends a very weird signal,” said Green MEP Rasmus Andresen. It’s “embarrassing,” and “doesn’t fit” the EU’s climate goals. The contract, whose buyers are named as the European Commission, Parliament, Council and the European External Action Service, is described as being “fully or partially financed with EU funds.” For the highest officials within these institutions, international travel is a key part of their role as they hold discussions with foreign leaders and make speeches around the world. But while the EU prioritizes commercial transport, the Commission said, sometimes it deems that impossible or too dangerous ― especially when staff travel to conflict zones. No company has yet been awarded the contract for “non-scheduled air-taxi transport services” worth €15.67 million despite it being out for tender for more than a year. The four-year contract from 2021 amounted to just over €12 million. That previous agreement, which was due to expire at the end of 2025, has been extended until June while the tender procedure continues, the Commission said. The increase in the estimated cost takes into account “the broader geopolitical context and increased volatility in international affairs, which may generate more short-notice travel needs,” a Commission spokesperson said. Market developments, including “higher aircraft charter rates and fuel costs,” have also been factored into the projections, the spokesperson said. “It is important to stress that charter air taxi services are not the primary means of transport,” adding that they’re used “only when scheduled commercial flights are incompatible with official agendas or when urgent, unforeseen political developments require rapid travel or when this is necessary for security reasons.” The EU already stumped up extra cash for private jet use in 2021, with the previous contract — which ran from 2016 to 2021 — set €10.71 million as the maximum value that could be spent on private jets. At the time, the Commission said the rise was down to a potential increase in demand, largely because of the Covid-19 pandemic. Prices in the eurozone have risen roughly 30 percent between 2016 and 2026. “If the Commission is serious about its leadership on climate change, it should start by leading by example, closing the tax loopholes that allow the most polluting form of flying to remain one of the least regulated, and it certainly should not increase its own use of private jets,” said Diane Vitry, aviation director at the NGO Transport and Environment. Private jets polluted “five to 14 times more than commercial flights and 50 times more than trains per passenger,” she said. In its response, the Commission said that increased private jet spending was not a row-back of its climate ambitions and that it retained its commitment “to be a front runner in the transition towards a climate-neutral society.” EU officials have faced criticism for their use of private jets in the past. The bloc’s joint presidents used one to fly to U.N. climate talks in Egypt in 2023, according to data seen by POLITICO that revealed heavy use of private flights by the then-Council President Charles Michel. The EU’s commitment to tackling climate change is being questioned by NGOs which criticize the bloc for prioritizing competitiveness and red-tape cutting. A key piece of climate legislation, the EU’s tough rules on car emissions, has been watered down in recent weeks. “Increasing spending on private jets for top officials in times of financial constraints and climate crisis is not only scandalous but also irresponsible,” said Green MEP Tilly Metz. “Sustainable forms of traveling such as high-speed trains are available and must become the rule also for EU’s political elite,” she added. “For overseas travel commercial flights can easily be used, no need for PJs!” Max Griera contributed reporting.

One year after the European Commission launched the Clean Industrial Deal to tackle mounting competitiveness challenges for EU industry, Neste ― the world’s leading producer of sustainable aviation fuel and renewable diesel ― is calling for urgent action to deliver on the Commission’s promise of turning “decarbonization into a driver of growth for European industries.” POLITICO Studio spoke to Jenni Männistö, vice president, strategy, M&A and business development at Finland-based Neste, about the company’s investments in the EU, how renewable fuels can be scaled and what they offer the continent’s economic future.  POLITICO Studio: How does the scale-up of renewable fuels strengthen the EU’s competitiveness, and why should the EU prioritize this? Jenni Männistö: Commission President Ursula von der Leyen provided a clear diagnosis when she began her second term in 2024: the world is in a race to develop the technologies that will shape the global economy for decades to come as we move toward climate neutrality. This global race is still on today, and Europe must seize the economic opportunities that clean tech provides amid increasing pressure on traditional fossil markets. One in five European oil refineries has closed since 2009. Going backward and falling economically behind in the global race is not an option. The EU is seeing its competitiveness challenged in some clean tech sectors, but there are also areas where it is a leader, such as biofuels. Our story shows what is possible: Neste has grown from a regional Finnish oil refinery into the global leader in renewable fuels. Forward-looking EU and global policies to reduce greenhouse gas emissions have helped accelerate innovation and growth. PS: Neste is investing €2.5 billion in expanding its Rotterdam refinery to make it the world’s largest biofuels production facility. What’s needed for more investments of this scale when many businesses are delaying projects or even shutting down sites in the EU? JM: The expansion of our Rotterdam refinery is a major investment. EU refinery and chemical sectors have lacked projects of this scale in recent years. Instead, we have seen new projects cancelled or delayed, all while traditional crude oil refineries close. This is a very concerning trend. To turn the situation around and strengthen Europe’s competitiveness and energy security, we need long-term certainty and a strong business case for early movers. And EU businesses should, of course, compete on a level playing field with imports. via Neste PS: Long-term certainty is a common request from businesses, but what’s specifically needed? JM: The first ingredient is long-term certainty about Europe’s commitment to climate neutrality and emissions reduction. The EU’s 2040 climate targets set a clear direction, and their adoption means we can now focus on the policies that get us there. The second ingredient is long-term regulatory certainty. We have a clear framework in place for SAF, for which the ReFuelEU Regulation sets targets until 2050. These targets must remain in place. > We are calling for new, strong enabling conditions for airlines to uplift SAF > beyond the EU minimum SAF targets, for instance by increasing support under > the Emission Trading System.” However, other areas are lacking: the EU’s Renewable Energy Directive currently has no transport sector target after 2030. Moreover, the EU Effort Sharing Regulation, which notably includes the national decarbonization objectives for the road sector, provides no visibility beyond 2030. That is a major issue, because biofuels producers cannot make major business and investment decisions based only on one customer segment — aviation — or a short-term regulatory outlook. PS: Why is it important that the EU supports early movers who invest in solutions to reduce transport greenhouse gas emissions?   JM: We were pleased with the direction of the Clean Industrial Deal and the EU’s Competitiveness Compass at the start of 2025; it clarified that there needs to be a business case for “clean production” with “lead markets and policies to reward early movers.” These commitments would address some of the big challenges for early movers that we see at Neste. We have invested heavily in expanding SAF production capabilities, but demand is failing to pick up as expected. Once the €2.5 billion expansion of our Rotterdam refinery is completed in 2027, Neste’s SAF production capacity alone could be sufficient to meet the EU’s current 2 percent SAF mandate. Today, we are a year on from the launch of the EU’s flagship competitiveness plans at the start of 2025, but we still need new policies that translate commitments to early movers into action. That is disappointing, and 2026 must be the year when the Commission acts to turn Europe’s early SAF lead into a long-term competitive advantage. That is why we are calling for new, strong enabling conditions for airlines to uplift SAF beyond the EU minimum SAF targets, for instance by increasing support under the Emission Trading System. PS: A level playing field is a vital factor; what makes it so crucial? JM: Although Europe currently leads in the scale-up of renewable fuels, other countries and regions are supporting their domestic companies to expand production capacity. This raises major level-playing-field concerns, similar to those we have seen in many other sectors. The EU must align its trade and industrial policies, especially for newly scaling markets. For instance, the EU’s SAF target is just 2 percent until 2030, and other countries and regions are only starting to roll out their own requirements for SAF use. This creates a risk that global SAF volumes end up flowing into the EU. > Renewable fuels can strengthen Europe’s energy security in today’s uncertain > geopolitical environment.” In 2025, the European Commission introduced new protective measures on biodiesel imports. In Neste’s view, there should be immediate measures to protect Europe’s biofuels industry as a whole, including SAF production, from unfair competition. The current approach falls short and endangers EU players’ competitiveness, as well as their ability to continue to invest in production capacity and future-proof innovation. PS: There’s a push to revisit and simplify some of the rules agreed during the last Commission, such as the carbon dioxide standards. How do you view this? What’s the balance between renewable fuels and electrification? JM: The approach of the Clean Industrial Deal is the right one — climate action and competitiveness must go hand in hand to deliver a growth strategy for Europe. That is why it is good that we revisit some of the EU rules with these twin objectives in mind. Neste is leading the way with its investment in the Netherlands; we believe that the EU industry can still lead in renewable fuels if we are bold. We need to ask how we can implement policies that cut greenhouse gas emissions and build on Europe’s competitive strengths. With this in mind, it is a step in the right direction to recognize the role of renewable fuels in the legislation on CO2 standards, but their actual and immediate greenhouse gas contribution needs to be better reflected. Electrification plays a role, especially in light-duty vehicles and urban transport, but it is not a silver bullet for the transport sector as a whole. Once EU rules enable a range of low greenhouse gas emission options, users can choose the solutions that best fit their operational needs. PS: There’s also the issue of EU autonomy and energy in an increasingly volatile world. What’s the role of renewable fuels in that context? JM: Renewable fuels can strengthen Europe’s energy security in today’s uncertain geopolitical environment. A key priority is diversifying supply; expanding European-produced renewable fuels can reduce our reliance on volatile global markets. In 2023, which is the most recent data available, the EU’s import dependency for oil was nearly 95 percent, underscoring the need to de-risk and diversify. The aim is not to be an island ― EU companies will need global supply chains and partners. Scaling up renewable fuels brings opportunities for new partnerships, such as the pledge by several major countries at COP30 to boost biofuels significantly by 2035. Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Neste * The advertisement is linked to is linked to the ReFuelEU and the Clean Industrial Deal. More information here.

Canadian Prime Minister Mark Carney publicly backed Kevin Warsh as the next chair of the Federal Reserve on Friday, calling him a “fantastic choice,” in a rare point of alignment amid an escalating U.S.-Canada trade war. “Kevin Warsh is a fantastic choice to lead the world’s most important central bank at this crucial time,” Carney wrote on X shortly after President Donald Trump announced he will nominate the former Fed board member to replace current chair, Jerome Powell. Carney is an experienced central banker himself. He oversaw the Bank of Canada from 2008-2013, briefly overlapping with Warsh’s first tenure as a Fed governor, before leading the Bank of England from 2013-2020. The endorsement stood out as relations between the Trump administration and Canada continue to strain, with Canadian officials warning that Trump’s trade agenda and broader foreign policy are destabilizing both the U.S. and Canadian economies. On Saturday, Trump threatened to impose a 100 percent tariff on Canada if it follows through on a planned trade deal with China. In his latest threat Thursday, he said he would impose a 50 percent tariff on Canadian-made aircrafts after a dispute over aviation certification. “Canada is effectively prohibiting the sale of Gulfstream products in Canada through this very same certification process,” the president wrote on Truth Social. “If, for any reason, this situation is not immediately corrected, I am going to charge Canada a 50% Tariff on any and all Aircraft sold into the United States of America.” Earlier this week, the Bank of Canada said U.S. tariffs are expected to have a “lasting negative impact” on Canada’s economy, citing prolonged uncertainty tied to Trump’s trade policies. “It’s pretty clear that the days of open rules-based trade with the United States are over,” Bank of Canada Gov. Tiff Macklem said. “It’s not a good thing for Americans. It’s not a good thing for Canadians.” In an interview with Reuters on Wednesday, Macklem said Trump’s actions could derail the central bank’s economic forecasts, pointing to Trump’s repeated tariff threats against Canada and other actions abroad, including repeat pressure on Greenland and the capture of Venezuelan President Nicolás Maduro. “There is unusual potential for a new shock, a new disruption,” he said. “Geopolitical risks are elevated.” Macklem also voiced his support for Powell, telling Reuters that he told Powell in a private conversation that he was “doing a good job under difficult circumstances.” Several global central bank leaders, including Macklem, issued a joint statement earlier this month in support of Powell and the Federal Reserve after the Department of Justice launched a criminal investigation into the Fed chair. They warned that political pressure on central banks could undermine global financial stability. “We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell,” the statement said. “Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”

BRUSSELS — Senior European Commission officials hardly ever get the sack. On Thursday, one did. That was the twist in a tale that up until that moment had been classically Brussels. The protagonist: A little-known bureaucrat who had spent two decades working in the EU civil service. The allegations: Taking expensive gifts that aroused suspicions over conflicts of interest. “After nearly 22 years at the Commission, I am obviously disappointed,” Henrik Hololei told POLITICO only hours after he was informed of the decision. “But I’m happy that this long process has finally come to a conclusion.” While commissioners, the EU’s 27 political appointees, have been known to fall on their swords, there are few precedents for the dismissal of such a high-ranking civil servant, two senior officials familiar with the inner workings of the Commission said. Neither of the officials, who have several decades of EU experience between them, could remember any previous examples. Like other people interviewed for this article, they were granted anonymity so they could speak freely about Hololei and his downfall. The “long process” Hololei described totaled three years. It was in 2023 that POLITICO first revealed that the Estonian, who was then the EU’s top transport official, had accepted free flights from Qatar at the same time as negotiating a transport deal with the Gulf state that was beneficial to the country’s airline.   It couldn’t have come at a more inauspicious time. The initial reports emerged just a few months after the so-called Qatargate corruption scandal in the European Parliament, named after one of the countries linked to allegedly offering cash and gifts in return for favors. Hololei was not involved in that affair, but it added fuel to the argument from politicians and transparency campaigners that the EU needed to clean up its act. He resigned from his job within a month but didn’t leave the Commission. Soon after, he became special adviser in its international partnership division. The following year, French newspaper Libération reported additional allegations, including that he exchanged confidential details of the Qatar aviation deal in return for gifts for himself and others, including stays in a five-star hotel in Doha. This led to a probe by the EU’s Anti-Fraud Office (OLAF), which in turn led to the Commission’s investigation. On Thursday, the Commission announced that a senior official had breached the EU institution’s rules. These concerned conflicts of interest, gift acceptance and disclosures, according to three officials with knowledge of the investigation. They later confirmed the person in question was Hololei. ‘A LEGEND’ By his own admission, Hololei is a colorful character. Belying the clichéd image of a faceless bureaucrat, he’s known to do business over a drink or two. Michael O’Leary, the outspoken CEO of Irish airline Ryanair, who shared the occasional tipple with him, told POLITICO in 2023 that Hololei was “terrific.” His colleagues are just as glowing. On Thursday, a lower-ranking official who worked with him at the Commission described him as a “legend,” while a former transport lobbyist recalled seeing selfies of him holding up beers with industry representatives. “The feeling is they’re making an example of him,” said a person who works in the aviation field and met him during the course of his work. “He was undoubtedly passionate and determined to make EU transport better. He was a guy who just enjoyed the position he had. He was a people person.” Hololei talks to Czech Transport Minister Martin Kupka at the European Transport Ministerial Meeting in Prague in 2022. Colleagues and industry figures might mourn the departure of a gregarious, engaging figure, | Martin Divisek/EPA What ultimately led to his dismissal was an investigation by IDOC, the Commission’s internal disciplinary body, the result of which is not public.  IDOC’s conclusions were shared with a disciplinary committee made up of staffers who have equal or superior rank to Hololei — a relatively small pool given his seniority. Following a series of interviews with Hololei, the committee sent its recommendation to the College of Commissioners for a final vote. That decision was taken in the past few days.  ‘LONG OVERDUE’ While colleagues and those in the industry might mourn the departure of a gregarious, engaging figure, European propriety campaigners are less sympathetic. “It’s almost three years to the day since revelations of Mr. Hololei’s impropriety broke,” said Shari Hinds, senior policy officer at Transparency International, an accountability-focused NGO. “Though long overdue, it is encouraging that the European Commission finally appears to be dealing out consequences proportionate to the gravity of these ethics violations.” Hololei, 55, who had taken a pay cut when he moved to the role of hors classe adviser from DG MOVE, as the transport department is known, will receive his pension from the Commission when he reaches retirement age. He has three months to lodge a complaint against the decision with the Commission. “Good to see there is an actual reaction,” said Daniel Freund, a Green member of the European Parliament, who campaigns on issues of accountability in the EU institutions. “So far, so good.” ‘MUCH MISSED’ A decade in Estonian politics — where he largely focused on European affairs — preceded his time at the Commission, starting in the cabinet of then-Estonian Commissioner Siim Kallas, the father of current EU foreign policy chief, Kaja Kallas, before moving into transport. It was in that role he became a “very much-loved boss,” according to the person who worked with him. “Even now he is still very much missed in DG MOVE. He was a good person to be around.” In the comments Hololei gave to POLITICO on Thursday afternoon, he was as gracious as so often described by those who know him. But in the end, the personality traits that endeared him to so many he worked with, in the Commission and in industry, weren’t enough to save his job.

BRUSSELS — Powerful political allies helped automakers force the EU to water down climate laws for cars — and now the aviation sector is borrowing those tactics. Their big target is getting the EU to dilute its mandate forcing airlines to use increasing amounts of cleaner jet fuels, alternatives to kerosene that are also much more expensive and harder to source. Aviation is emerging as the next crucial stress test for the EU’s climate agenda, as key leaders push to do whatever it takes to help struggling European businesses. With industry and allied governments pressing for relief from costly green rules, the fight will show how far Brussels is willing to go — and what it is willing to give up — in pursuit of its climate goals. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” French energy giant TotalEnergies CEO Patrick Pouyanné predicted at the World Economic Forum in Davos earlier this month. Carmakers provide a model on how to get the EU to backtrack. The bloc mandated that no CO2-emitting cars could be sold from 2035, essentially killing the combustion engine and replacing it with batteries (possibly with a minor role for hydrogen). But many carmakers — allied with countries like Germany, Italy and automaking nations in Central Europe — pushed back, arguing that the 2035 mandate would destroy the car sector just as it is battling U.S. President Donald Trump’s tariffs, sluggish demand and a rising threat from Chinese competitors. “I will make a bet today that what happened to the car regulation will happen to the SAF [Sustainable Aviation Fuels] regulation in Europe,” Patrick Pouyanné said. | Ludovic Marin/ AFP via Getty Images In the end, the European Commission gave way and watered down the 2035 mandate, which will now only aim to cut CO2 emissions by 90 percent. AVIATION DEMANDS The aviation sector has a similar list of issues with the EU. It is taking aim at a host of other climate policies, such as including aviation in the bloc’s cap-and-trade Emissions Trading System and intervening on non-CO2 impacts of airplanes like contrails — the ice clouds produced by airplanes that have an effect on global warming. Brussels introduced several regulations over the last 15 years to address the growing climate impact of air transport, which accounts for about 3 percent of global CO2 emissions. Those policies include the obligation to use sustainable aviation fuels, to put a price on carbon emissions and to take action on non-CO2 emissions. Each of these green initiatives is now under attack. The ReFuelEU regulation requires all airlines to use SAF for at least 2 percent of their fuel mix starting this year. That mandate rises to 6 percent from 2030, 20 percent from 2035 and 70 percent by 2050. “Today, all airline companies are fighting even the 6 percent … which is easy to reach to be honest,” Pouyanné said, but then warned, “20 percent five years after makes zero sense.” He is echoed by CEOs like Ryanair’s combative Michael O’Leary, who called the SAF mandate “nonsense.” “It is all gradually dying a death, which is what it deserves to do,” O’Leary said last year. “We have just about met our 2 percent mandate. There is no possibility of meeting 6 percent by 2030; 10 percent, not a hope in hell. We’re not going to get to net zero by 2050.” Brussels-based airline lobbies are not calling for the SAF mandate to be killed, rather they are demanding a book-and-claim system. Under such a scheme, airlines could claim carbon credits for a certain amount of SAF, even if they don’t use it in their own aircraft. They would buy it at an airport where it’s available and then let other airlines use it. That would make it easier for airlines to meet the SAF mandate even if the fuel is not easily available. However, so far the Commission is opposed. LOBBYING BATTLE The car coalition only worked because industry allied with countries, and there are signs of that happening with aviation. The sector’s lobbying effort to slash the EU carbon pricing could find an ally in the new Italo-German team-up to promote competitiveness. The German government last year announced a plan to cut national aviation taxes — with the call made during the COP30 global climate conference, something that angered the German Greens. Italian Prime Minister Giorgia Meloni and German Federal Chancellor Friedrich Merz attend the Italy-Germany Intergovernmental Summit at Villa Doria Pamphilj. | Vincenzo Nuzzolese/LightRocket via Getty Images Italian Prime Minister Giorgia Meloni said Friday that she and German Chancellor Friedrich Merz wanted to start “a decisive change of pace … in terms of the competitiveness of our businesses.” “A certain ideological vision of the green transition has ended up bringing our industries to their knees, creating new dangerous strategic dependencies for Europe without, however, having any real impact on the global protection of the environment and nature,” she added. Her far-right coalition ally, Italian Transport Minister Matteo Salvini, has called the ETS and taxes on maritime transport and air transport “economic suicide” that “must be dismantled piece by piece.” COMMISSION SAYS NO As with the 2035 policy for cars, the European Commission is strongly defending its policy against those attacks. Apostolos Tzitzikostas, the transport commissioner, stressed the EU’s “firm commitment” to stick with aviation decarbonization policies. “Investment decisions and construction must start by 2027, or we will miss the 2030 targets. It is as simple as that,” the commissioner said in November when announcing the bloc’s new plans to boost investment into sustainable aviation and maritime fuels. Climate campaigners fought hard against the car sector’s efforts to gut 2035, and now they’re gearing up for another battle over aviation targets. “The airlines’ whining comes as no surprise — yet it is disappointing to see airlines come after such a fundamental piece of EU legislation,” said Marte van der Graaf, aviation policy officer at green NGO Transport & Environment. She was incensed about efforts to dodge the high prices set by the EU’s ETS in favor of the U.N.’s cheaper CORSIA emissions reduction scheme. Airline lobbyA4E said its members paid €2.3 billion for ETS permits last year. “By 2030, [the ETS cost] should rise up to €5 billion because the free allowances are phased out,” said Monika Rybakowska, the lobby’s policy director.  A recent study by the think tank InfluenceMap found that airlines are working to increase their impact on policymakers by aligning their positions on ETS. T&E also took aim at a recent position paper by A4E that asked the EU to postpone measures to curb non-CO2 pollution — such as nitrogen oxides and soot particles that, along with water vapor, contribute to contrails. The A4E paper said that “the scientific foundation for regulating non-CO2 effects remains insufficient” and “introducing financial liability risks misdirecting resources.” This is “an outdated excuse,” responded T&E, noting that the climate impact of contrails has been known for over 20 years.

BRUSSELS — After decades spent lambasting European politicians, Michael O’Leary is now targeting Donald Trump and Elon Musk. In less than a week, the outspoken Ryanair boss slammed both the U.S. president and his on-again, off-again supporter Musk. The latter hit back on social media, launching a feud and threatening to buy the Irish airline just to fire O’Leary, a proposal the airline CEO called “Twitshit.” Everyone involved is a seasoned infotainment warrior — they’ve all used outrageous attacks and language to further their financial and political goals. But this fight is putting O’Leary into a different league; his targets are a lot richer and more powerful than his normal punching bags of European Commission President Ursula von der Leyen, officials from Spain, the Netherlands and Belgium or UK Reform leader Nigel Farage. After telling POLITICO that Trump was “a liar” and taking aim at the U.S. president’s foreign policy and tariffs he said were harming business, O’Leary told Irish radio that Musk was “an idiot” in response to the world’s richest man calling him “misinformed” about the cost of installing Starlink systems on its fleet. Ryanair has publicly ruled out installing Starlink across its more than 600 Boeing 737s, arguing the external antennas would increase drag and fuel consumption. O’Leary’s keenness to scrap with Trump and Musk contrasts sharply with the approach taken by most of his fellow CEOs, who often balk at crossing the powerful. But insulting politicians and rivals is part of O’Leary’s DNA. He’s also insulated from blowback because his airline doesn’t fly to the U.S.; because it’s one of Boeing’s largest customers; and because Ryanair is protected against a hostile Musk acquisition by EU rules mandating that airlines have to be majority-owned by EU shareholders. The online scuffle escalated quickly, with Musk calling O’Leary “a retarded twat” and O’Leary telling Musk on Wednesday “to join the back of a very, very, very, very long queue of people who already think I’m a ‘retarded twat,’ including my four teenage children.” The airline said it was “launching a Great Idiots seat sale especially for Elon and any other idiots.” So far, Trump hasn’t responded to needling from O’Leary. But the dissing contest is more than a casual brawl among tycoons. It reflects what O’Leary has been doing for a long time in Europe: offending anyone who crosses his path, getting public attention and selling more tickets. After days of mutual insults between the flamboyant airline chief and his quasi-equivalent in the space industry with come-and-go ties to the White House, O’Leary offered Musk “a free ride air ticket, to thank him for the wonderful boost in publicity which has seen our bookings rise significantly.” “They’re up about 2 or 3 percent in the last five days,” he added at a press conference in Dublin. The company’s shares were also up over 2 percent on Wednesday. “O’Leary’s complaint about Starlink was an absolutely classic Michael O’Leary complaint: operationally driven, cost-based, almost certainly technically correct, quite probably an attempt to negotiate the price down by Musk,” said Andrew Charlton, managing director of the Aviation Advocacy consultancy. O’Leary confirmed on Wednesday that he had been in talks for over a year with Starlink and its rivals Amazon and Vodafone to provide Wi-Fi on Ryanair planes at no extra cost to passengers. This is just the latest cost-cutting crusade taken by the Irish businessman, who spent the first weeks of the new year threatening to slash flights to and from Belgium over a ticket tax increase of less than €10. “He’s the Trump of aviation, the same kind of idiot,” said Toto Bongiorno, a former union leader from Belgium’s now-defunct flag carrier, Sabena. “He’s the guy who once said he was going to allow standing seats on planes. He’s the one who said people would have to pay to use the [onboard] toilets at some point,” Bongiorno told the Belgian TV channel LN24. “He invented a different way of doing aviation.” CURSING DOESN’T COST In a market previously dominated by flag carriers that offered larger seats and free luggage, drinks and snacks — but also charged higher prices and occasionally received state aid from governments — Ryanair and other low-cost European airlines, such as easyJet and Wizz Air, have gained market share thanks to cheaper airfares and minimal extras. However, O’Leary built Ryanair not only by slashing costs at the expense of the passenger experience; he also harangued European leaders, demanding fewer rules and lower taxes. Von der Leyen is often referred to as “Derlayed-Again” by Ryanair due to her alleged failure to guarantee the right of airlines to overfly countries affected by air traffic controller strikes. After Ryanair was fined by Spain’s Minister for Consumer Affairs Pablo Bustinduy for unfair practices, O’Leary called him “a crazy Spanish communist minister” and showed a cardboard cutout of Bustinduy dressed as a clown and wearing an apron with the words “I raise prices.” Now it’s Trump’s turn. “If Trump threatens Europe with tariffs, Europe should respond in like measure and Trump will chicken out. He generally does,” O’Leary said on Wednesday. 

LONDON — The U.K. and Poland have agreed to cooperate more closely to shoot down air and missile threats, as they seek to strengthen the protection of their skies. The two NATO allies will step up joint training of helicopter pilots and work together on new capabilities to counter attacks from the air. British and Polish military personnel will train together in virtual environments to improve air defense techniques, while eight Polish military helicopter pilots will undertake training in the U.K. under NATO’s military aviation program. Two Polish helicopter instructors will be permanently stationed at RAF Shawbury in the West Midlands for a full rotational tour. The announcement came during a visit by Polish President Karol Nawrocki to Downing Street on Tuesday. U.K. Defense Secretary, John Healey, hailed Poland as “a crucial ally for the U.K. in this era of rising threats” and said together they were “stepping up to defend Europe and face down the threat from (Vladimir) Putin.” British fighter jets conducted an air defense mission over Poland as part of an allied response to Russian drone incursions into Polish airspace, with pilots from the two countries flying together as part of NATO’s Eastern Sentry mission. Healey announced last year that British armed forces would get fresh powers to bring down suspicious drones over military sites as part of the Armed Forces Bill, amid a spate of aerial incursions across Europe. Ministers have committed to improving the U.K.’s aerial defenses, following concerns that it is increasingly vulnerable given the changing nature of threats from the air. The U.K. and Poland have cooperated extensively on air defense in the past, including a £1.9 billion export agreement announced in April 2023 to equip 22 Polish air defense batteries, and a separate deal worth over £4 billion to continue the next phase of Poland’s future air defense programme, Narew. 

BRUSSELS — Donald Trump blew up global efforts to cut emissions from shipping, and now the EU is terrified the U.S. president will do the same to any plans to tax carbon emissions from long-haul flights. The European Commission is studying whether to expand its existing carbon pricing scheme that forces airlines to pay for emissions from short- and medium-haul flights within Europe into a more ambitious effort covering all flights departing the bloc. If that happens, all international airlines flying out of Europe — including U.S. ones — would face higher costs, something that’s likely to stick in the craw of the Trump administration. “God only knows what the Trump administration will do” if Brussels expands its own Emissions Trading System to include transatlantic flights, a senior EU official told POLITICO. A big issue is how to ensure that the new system doesn’t end up charging only European airlines, which often complain about the higher regulatory burden they face compared with their non-EU rivals. The EU official said Commission experts are now “scratching their heads how you can, on the one hand, talk about extending the ETS worldwide … [but] also make sure that you have a bit of a level playing field,” meaning a system that doesn’t only penalize European carriers. Any new costs will hit airlines by 2027, following a Commission assessment that will be completed by July 1. Brussels has reason to be worried.  “Trump has made it very clear that he does not want any policies that harm business … So he does not want any environmental regulation,” said Marina Efthymiou, aviation management professor at Dublin City University. “We do have an administration with a bullying behavior threatening countries and even entities like the European Commission.” The new U.S. National Security Strategy, released last week, closely hews to Trump’s thinking and is scathing on climate efforts. “We reject the disastrous ‘climate change’ and ‘Net Zero’ ideologies that have so greatly harmed Europe, threaten the United States, and subsidize our adversaries,” it says. In October, the U.S. led efforts to prevent the International Maritime Organization from setting up a global tax to encourage commercial fleets to go green. The no-holds-barred push was personally led by Trump and even threatened negotiators with personal consequences if they went along with the measure. In October, the U.S. led efforts to prevent the International Maritime Organization from setting up a global tax aimed at encouraging commercial fleets to go green. | Nicolas Tucat/AFP via Getty Images This “will be a parameter to consider seriously from the European Commission” when it thinks about aviation, Efthymiou said. The airline industry hopes the prospect of a furious Trump will scare off the Commission. “The EU is not going to extend ETS to transatlantic flights because that will lead to a war,” said Willie Walsh, director general of the International Air Transport Association, the global airline lobby, at a November conference in Brussels. “And that is not a war that the EU will win.” EUROPEAN ETS VS. GLOBAL CORSIA In 2012, the EU began taxing aviation emissions through its cap-and-trade ETS, which covers all outgoing flights from the European Economic Area — meaning EU countries plus Iceland, Liechtenstein and Norway. Switzerland and the U.K. later introduced similar schemes. In parallel, the U.N.’s International Civil Aviation Organization was working on its own carbon reduction plan, the Carbon Offsetting and Reduction Scheme for International Aviation. Given that fact, Brussels delayed imposing the ETS on flights to non-European destinations. The EU will now be examining the ICAO’s CORSIA to see if it meets the mark. “CORSIA lets airlines pay pennies for pollution — about €2.50 per passenger on a Paris-New York flight,” said Marte van der Graaf, aviation policy officer at green NGO Transport & Environment. Applying the ETS on the same route would cost “€92.40 per passenger based on 2024 traffic.” There are two reasons for such a big difference: the fourfold higher price for ETS credits compared with CORSIA credits, and the fact that “under CORSIA, airlines don’t pay for total emissions, but only for the increase above a fixed 2019 baseline,” Van der Graaf explained. “Thus, for a Paris-New York flight that emits an average of 131 tons of CO2, only 14 percent of emissions are offset under CORSIA. This means that, instead of covering the full 131 tons, the airline only has to purchase credits for approximately 18 tons.” Efthymiou, the professor, warned the price difference is projected to increase due to the progressive withdrawal of free ETS allowances granted to aviation. The U.N. scheme will become mandatory for all U.N. member countries in 2027 but will not cover domestic flights, including those in large countries such as the U.S., Russia and China. KEY DECISIONS By July 1, the Commission must release a report assessing the geographical coverage and environmental integrity of CORSIA. Based on this evaluation, the EU executive will propose either extending the ETS to all departing flights from the EU starting in 2027 or maintaining it for intra-EU flights only. Opposition to the ETS in the U.S. dates back to the Barack Obama administration. | Pete Souza/White House via Getty Images According to T&E, CORSIA doesn’t meet the EU’s climate goals. “Extending the scope of the EU ETS to all departing flights from 2027 could raise an extra €147 billion by 2040,” said Van der Graaf, noting that this money could support the production of greener aviation fuels to replace fossil kerosene. But according to Efthymiou, the Commission might decide to continue the current exemption “considering the very fragile political environment we currently have with a lunatic being in power,” she said, referring to Trump. “CORSIA has received a lot of criticism for sure … but the importance of CORSIA is that for the first time ever we have an agreement,” she added. “Even though that agreement might not be very ambitious, ICAO is the only entity with power to put an international regulation [into effect].” Regardless of what is decided in Brussels, Washington is prepared to fight. Opposition to the ETS in the U.S. dates back to the Barack Obama administration, when then-Secretary of State Hillary Clinton sent a letter to the Commission opposing its application to American airlines. During the same term, the U.S. passed the EU ETS Prohibition Act, which gives Washington the power to prohibit American carriers from paying for European carbon pricing. John Thune, the Republican politician who proposed the bill, is now the majority leader of the U.S. Senate.

With his lightning raid to snatch Venezuelan strongman Nicolás Maduro, U.S. President Donald Trump has shown that President Vladimir Putin’s self-proclaimed “multipolar” world of anti-Western dictatorial alliances from Caracas to Tehran is essentially toothless. Beyond the humiliation of the world seeing that Putin isn’t a dependable ally when the chips are down — something already witnessed in Nagorno-Karabakh, Syria and Iran — there’s now also the added insult that Trump appears more effective and bolder in pulling off the sort of maverick superpower interventions the Kremlin wishes it could achieve. In short, Putin has been upstaged at being a law unto himself. While the Russian leader would presumably have loved to remove Ukrainian President Volodymyr Zelenskyy in a blitz attack, he’s instead been locked in a brutal war for four years, suffering over 1 million Russian dead and wounded. “Putin must be unbearably jealous [of Trump],” political analyst and former Kremlin speechwriter Abbas Gallyamov told POLITICO. “What Putin promised to do in Ukraine, Trump did in half an hour [in Venezuela].” The sense that Moscow has lost face was one of the few things independent analysts and Russia’s ultranationalists seemed to agree on.    Discussing the Caracas raid on his Telegram account, the nationalist spy-turned-soldier and war blogger Igor Girkin, now jailed in a penal colony, wrote: “We’ve suffered another blow to our image. Another country that was counting on Russia’s help hasn’t received it.” UNRELIABLE ALLY For years, Russia has sought to project itself as the main force resisting American-led Western hegemony, pioneering an alliance loosely united by the idea of a common enemy in Washington. Under Putin, Russia presented itself as the chief proponent of this “multipolar” world, which like the Soviet Union would help defend those in its camp.  Invading Ukraine in 2022, Moscow called upon its allies to rally to its side.  They largely heeded the call. Iran sold Russia drones. China and India bought its oil. The leaders of those countries in Latin America and Africa, with less to offer economically and militarily, gave symbolic support that lent credence to Moscow’s claim it wasn’t an international pariah and in fact had plenty of friends.  Recent events, however, have shown those to be a one-way friendships to the benefit of Moscow. Russia, it appears, won’t be riding to the rescue. The first to realise that cozying up to Russia had been a waste of time were the Armenians. Distracted by the Ukraine war, Moscow didn’t lift a finger to stop Azerbaijan from seizing the ethnic-Armenian region of Nagorno-Karabakh in a lightning war in 2023. Russian peacekeepers just stood by.   A year later, the Kremlin was similarly helpless as it watched the collapse of the Syrian regime of Bashar al-Assad, which it had propped up for years. Russia even had to abandon Tartous, its vital port on the Mediterranean. Moscow didn’t lift a finger to stop Azerbaijan from seizing the ethnic-Armenian region of Nagorno-Karabakh in a lightning war in 2023. | Anthony Pizzoferrato/Middle East Images/AFP via Getty Images Further undermining its status in the Middle East, Russia was unable to help Iran when Israel and the U.S. last year bombed the Islamic Republic at will. Russia has long been an important strategic partner to Iran in nuclear technology, but it had no answer to the overwhelming display of military aviation used to strike Iran’s atomic facilities. Now, Venezuela, another of Putin’s longtime allies, has been humiliated, eliciting haughty condemnation (but no action) from Moscow. GREEN WITH ENVY Moscow’s energy and military ties to Caracas run deep. Since 1999 Russia has supplied more than $20 billion in military equipment — financed through loans and secured in part by control over Venezuela’s oil industry — investments that will now be of little avail to Moscow. Maduro’s capture is particularly galling for the Russians, as in the past they have managed to whisk their man to safety — securing a dacha after your escape being among the attractions of any dictator’s pact with Russia. But while ousted Ukrainian leader Viktor Yakunovych and Assad secured refuge in Russia, Maduro on Monday appeared in a New York court dressed in prison garb. Russian officials, predictably, have denounced the American attack. Russia’s foreign ministry described it as “an unacceptable violation of the sovereignty of an independent state,” while senator Alexei Puskov said Trump’s actions heralded a return to the “wild imperialism of the 19th century.” Sovereignty violations and anachronistic imperialism, of course, are exactly what the Russians themselves are accused of in Ukraine.   There has also been the usual saber-rattling.  “All of Russia is asking itself why we don’t deal with our enemies in a similar way,” wrote Aleksandr Dugin, a prominent ultranationalist | Matt Cardy/Getty Images Alexei Zhuravlev, deputy chairman of Russia’s parliamentary defense committee, said Russia should consider providing Venezuela with a nuclear-capable Oreshnik missile.  And the military-themed channel ‘Two Majors,’ which has more than 1.2 million followers, posted on Telegram that “Washington’s actions have effectively given Moscow free rein to resolve its own issues by any means necessary.” (As if Moscow had not been doing so already.) The more optimistic quarters of the Russian camp argue that Trump’s actions in Caracas show international law has been jettisoned, allowing Moscow to justify its own behavior. Others suggest, despite evidence to the contrary in the Middle East, that Trump is adhering to the 19th century Monroe Doctrine and will be content to focus on dominance of the Americas, leaving Russia to its old European and Central Asian spheres of influence. In truth, however, Putin has followed the might-is-right model for years. What’s embarrassing is that he hasn’t proving as successful at it as Trump. Indeed, the dominant emotion among Russia’s nationalists appears to be envy, both veiled and undisguised.  “All of Russia is asking itself why we don’t deal with our enemies in a similar way,” wrote Aleksandr Dugin, a prominent ultranationalist. Russia, he continued, should take a leaf out of Trump’s playbook. “Do like Trump, do it better than Trump. And faster.” Pro-Kremlin mouthpiece Margarita Simonyan was even more explicit, saying there was reason to “be jealous.” Various pro-Kremlin commentators also noted tartly that, unlike Russia, the U.S. was unlikely to face repercussions in the form of international sanctions or being “cancelled.”  To many in Russia, Trump’s audacious move is likely to confirm, rather than upend their world view, said Gallyamov, the analyst. Russian officials and state media have long proclaimed that the world is ruled by strength rather than laws. The irony, though, is that Trump is showing himself to be more skillful at navigating the law of the jungle than Putin. “Putin himself created a world where the only thing that matters is success,” Gallyamov added. “And now the Americans have shown how it’s done, while Putin’s humiliation is obvious for everyone to see.”