BP and Shell are “very excited” about investing in the EU after Brussels unveiled more favourable incentives for green projects, Michael O’Leary has claimed.
The Ryanair chief said the two oil majors had indicated that a recently announced package of subsidies from Brussels had made investing in the Continent more attractive.
Meanwhile, Mr O'Leary said Britain was lagging behind.
The EU has unveiled a series of subsidies to attract investment into green industries and technologies. The policies were announced in response to the Inflation Reduction Act (IRA) in the US, which was signed into law last year and includes $369bn of funding for net zero projects and energy security.
Brussels’ subsidies could make the production of sustainable aviation fuel (SAF) cheaper. As a result, the EU is likely to become a hub for the production of the green fuel, which is made from waste such as used cooking oils.
Mr O’Leary said: “The Europeans are now much more aggressive about subsidising production of SAF and alternative fuels than the UK.
“The UK is still running well behind them and I spoke to two oil majors Shell and BP in the last two weeks who are very excited about the European response to the IRA in the States.
“They think it could be the game-changer for the production of SAF [sustainable aviation fuel] in Europe over the next five years.”
Britain has indicated that it is willing to roll-out a contracts for difference regime to support SAF, similar to that introduced a decade ago to incentivise wind energy investment. However, details of the regime have yet to be finalised.
Mr O’Leary said: “The UK is sort of struggling to form a response to the IRA… Europe looks like it's gonna be much more aggressive.”
Shell declined to comment. BP did not respond to a request for comment.
Mr O’Leary’s comments came as Ryanair posted its first annual profit since the Covid pandemic shut down flights around the world. Pre-tax profits in the year to March 2023 were €1.4bn compared with a €430m loss in the previous year.
Air fares were around 10pc above pre-pandemic levels and Mr O’Leary said they would continue to rise for the next two to three years.
He said: “We're predicting that our average fare would run from €40 to €50 euros over the next four years, rising by [an average of] €2.50-a-year.”
Flight prices are expected to rise around 12pc this year after a double-digit percentage increase in 2022.