Who should pay for the added cost of sustainable kerosene in Europe?

Confidence summary: Strong agreement on passenger payment mechanisms, with sharp division on how to prevent regressive impacts.

1. The core argument

The €1-24 surcharges already appearing on European tickets reveal the deeper question the ReFuelEU mandate cannot answer: whether climate transitions should preserve or reshape existing patterns of access. Schmidt sees energy dependency dressed as environmental policy. Thatcher finds market signals buried under regulatory mandates. Keynes frames the entire aviation system as insurance against scenarios where planes stop flying altogether. Ostrom maps the institutional complexity that makes any single solution insufficient. Sen exposes the distributional reality that flat pricing creates green apartheid in European skies. The council agrees on passenger payment but splits on whether regressive pricing undermines the transition's legitimacy.

2. How each member frames it

Helmut Schmidt draws direct lines from 1973's oil embargo to 2026's fuel mandates, arguing that energy transitions imposed by external forces destroy sovereignty. His experience managing stagflation in the 1970s makes him suspicious of policies that hide true costs. He would reject carbon pricing that shifts SAF expenses to general taxation because it breaks the connection between consumption and consequence. The surcharge mechanism preserves Germany's hard-won lesson that energy users must face energy realities.

Margaret Thatcher reframes the ReFuelEU mandate as a distortion that nevertheless requires market correction through pricing. Her privatisation of British Gas in 1986 established the principle that environmental costs belong in consumer bills, not government budgets. She would oppose tax-funded SAF subsidies as fiscal illusion but accepts regulatory mandates when they force true-cost pricing. Airlines compete on total ticket price; green premiums drive efficiency faster than subsidy programmes ever could.

John Maynard Keynes abandons conventional cost-benefit analysis for scenarios where commercial aviation becomes impossible. His wartime experience with compulsory savings shapes his view that survival sometimes requires collective action beyond individual choice. He sees passenger surcharges as insurance premiums against systemic collapse, distributed across those who benefit from aviation's existence. The alternative is not cheaper flying but no flying at all.

Elinor Ostrom maps aviation fuel as a global commons requiring coordination across airlines, airports, fuel producers, member states, and passengers. Her climate research shows that polycentric governance creates redundancy when single authorities fail. The EU sets frameworks; member states adapt implementation; airlines choose surcharge levels; passengers respond through booking decisions. This multiplies experiments rather than betting everything on one regulatory approach.

Amartya Sen exposes how flat surcharges transform aviation from a capability-enhancing service into luxury consumption. His entitlements research shows that policies designed without attention to who bears costs often destroy the freedoms they aim to protect. Fixed surcharges of €1-24 per ticket reduce lower-income travelers' capability to maintain family connections or pursue economic opportunities. Green transition should expand human capabilities, not make climate protection a luxury good.

3. Where the council agrees

The transition to sustainable aviation fuel is necessary and costs must be allocated somewhere rather than absorbed through fiscal illusion. All members accept that the ReFuelEU mandate creates legitimate new expenses that cannot be wished away through accounting. They converge on passenger payment as the least distortive mechanism for preserving market signals about fuel reality. Even Sen, despite his distributional concerns, prefers transparent surcharges to hidden subsidies that disguise true costs. The council also agrees that polycentric implementation across EU member states creates valuable experimentation rather than rigid uniformity. Finally, they share scepticism toward solutions that completely disconnect fuel consumption from fuel payment, viewing such disconnection as either economically destructive or politically unsustainable.

4. Where the council splits

Schmidt and Thatcher hold the market purist position: passengers should pay through transparent surcharges that preserve price signals and drive innovation. Keynes takes the collective insurance view: aviation represents systemic infrastructure requiring shared funding through whatever mechanism distributes costs most broadly. Sen advocates progressive pricing that maintains market signals while protecting low-income access through graduated surcharge structures. Ostrom stands apart by arguing that institutional design matters more than pricing mechanism, viewing the split itself as evidence that multiple approaches should be tested simultaneously across different European markets. Neither side is wrong because each addresses a different market failure: information asymmetries, collective action problems, distributional inequities, and institutional coordination challenges.

5. For a policymaker to decide on

Whether to maintain current flat surcharges, shift to progressive pricing based on ticket price or passenger income, or move SAF costs into general taxation. The council cannot resolve this because it depends on a value judgment about whether aviation should remain accessible to lower-income Europeans during the green transition, or whether climate urgency justifies concentrating flying among those who can afford sustainability premiums.