European airports' planned expansions are incompatible with national climate targets and global warming limits, according to a new Transport & Environment (T&E) study. Twenty of Europe's largest airports, including London, Paris, Madrid, Lisbon, Dublin, Frankfurt, and Brussels, are set to overshoot their fair-share 1.7°C carbon budget by two to three times. The research reveals that every airport will exceed its carbon budget, even when accounting for Sustainable Aviation Fuel (SAF) uptake and more efficient aircraft.

The largest budget overshoots in the current airport expansion plans are in Lisbon and Porto (Portugal), at 2.8 times the budget, followed by Dublin (Ireland) at 2.6 times. Portugal's emissions increase from the planned new Lisbon airport is equivalent to half a year of emissions from Portugal's entire economy. In the UK, the extra emissions from a third runway at London Heathrow between 2035 and 2050 would equal a full year of emissions from Croatia’s entire economy.

This development underscores the potential for significant regulatory risk and capital allocation misalignment. European governments may face legal action for breaching their climate obligations if they approve airport expansions that exceed national climate limits. Moreover, the economic case for expansion in most of Western Europe no longer holds, as demonstrated by the UK and French examples that have defined national aviation carbon budgets or decarbonisation pathways including international flights.

Comparatively, the Netherlands has developed and modeled binding carbon caps at the individual airport level. To address this risk, regulators must prioritize transparent and rigorous reporting on aviation emissions under frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). This will enable investors to assess and manage the associated risks and opportunities more effectively.

In conclusion, Europe's airport expansion push risks jeopardizing climate targets. Governments must carefully evaluate the long-term implications of these plans, considering both the direct environmental impact and the potential for regulatory and legal challenges. A proactive approach that aligns with TCFD and SASB recommendations is crucial to ensure sustainable development while promoting responsible investment decisions.