Michael O’Leary claims that BP and Shell have “very high expectations” for investing in the EU following Brussels’ announcement of more favourable incentives for green projects.
Ryanair’s chief executive said that the two oil giants had stated that a recent package of subsides from Brussels made investing on the continent more attractive.
Mr O’Leary also said that Britain is lagging behind.
The EU announced a number of subsidies designed to encourage investment in green technologies and industries. The policies were announced as a response to the Inflation Reduction Act in the US which was passed into law last summer and includes $369bn in funding for net-zero projects and energy security.
Brussels’ subsidies may make sustainable aviation fuel cheaper. The EU will likely become a center for the production of green energy, which is made out of waste, such as used cooking oil.
Mr O’Leary stated: “The Europeans have become much more aggressive in their subsidizing of SAF production and alternative fuels than Britain.”
The UK is still lagging behind. I have spoken to Shell and BP, two major oil companies in the past two weeks. They are excited by the European response against the IRA.
They think that it could be a game changer for the production SAF (sustainable aviation fuel) in Europe within the next five-year period.
Britain has stated that it would be willing to introduce a contract for difference system to support SAF. This is similar to the one introduced 10 years ago to encourage wind energy investments. Details of the scheme have not yet been finalised.
Mr O’Leary stated: “The UK seems to be struggling to formulate a response to IRA… Europe appears to be gonna become much more aggressive.”
Shell declined to make a comment. BP didn’t respond to a comment request.
Ryanair announced its first profit in a year since the Covid pandemic forced the suspension of flights worldwide. The pre-tax profit in the year up to March 2023 was EUR1.4bn, compared to a EUR430m deficit the previous year.
Air fares are around 10pc higher than pre-pandemic and Mr O’Leary predicted that they will continue to increase for the next 2 to 3 years.
He said: “We predict that the average fare will rise from EUR40 to EUR50 over the next four-year period, increasing by average of EUR2.50 per year.”
After a double-digit increase in 2022, flight prices are expected rise by around 12pc.