GREENAIR NEWSLETTER 20 APRIL 2015
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Appeal by India’s Jet Airways against its inclusion in the EU ETS rejected in non-compliance stand-off
Mon 20 Apr 2015 – An appeal by India’s Jet Airways against action taken against it by the UK Environment Agency (EA) for non-compliance with the EU Emissions Trading Scheme (EU ETS) has been rejected by an independent UK legal adjudicator. The case relates to the airline’s intra-EEA flights that took place in 2012 for which the airline did not submit a report of its CO2 emissions nor surrender allowances to cover those emissions, as required by EU and UK law. In its submission, Jet Airways argued that the unilateral action of the EU on the imposition of its scheme did not accord with the global consensus reached by ICAO Assembly resolutions and that the Indian Government had prohibited it from complying. Jet Airways faces a fine of €15,000 ($16,000) to cover the 150 tonnes of CO2 emissions estimated by the EA.
According to Jet’s submission to the adjudicator, David Hart QC, appointed by the Secretary of State for Energy and Climate Change, the Indian Government decided in November 2011 there was no need for its carriers to submit data under the EU ETS and then informed them that any correspondence with EU authorities should only be done after prior consent. In April 2012, national carriers were formally prohibited from participating in the scheme, a position reiterated in May 2014 after the A38-18 climate change resolution reached at the 2013 ICAO Assembly and subsequently confirmed in letters to the European Commission and the EA. India’s other main international airline, Air India, is also meant to report to the EA on its emissions under the EU ETS but has likewise failed to do so.
However, Hart rejected the Indian Government’s view that ICAO resolutions were inconsistent with the EU ETS Directive. “In addition, the views of the Indian Government do not purport to be laws binding Jet; they are plainly political views based upon that government’s view as to the state of negotiations between the EU member states and the rest of ICAO who appear to have wanted to negotiate globally,” he said in his determination of the case.
He noted that despite EA requesting clarification of the legal status of the directions to its carriers by the Indian Government, this had not been forthcoming.
“The underlying issue is whether there is a binding international norm which is capable of trumping the EU Directive, such that Jet do not have to comply with the latter,” he continues. “If I am right in my conclusion that there is not, then the Indian Government was wrong in its conclusion that there was, and its political direction to Jet based upon its erroneous view cannot assist Jet on its appeal. The rule of law requires that the executive cannot override the law by its say-so.”
Irrespective of the Indian Government instruction, Hart argued that tribunals or national courts within EU member states do not have the jurisdiction to accept a challenge to the validity of an EU Directive, in particular one that had already been upheld by the EU’s highest court, the Court of Justice of the European Union (CJEU). However, he said, regardless of whether he had the jurisdiction to declare the Directive invalid, he found the CJEU’s judgement in the case brought by US airlines in 2011 to be persuasive.
He said the A38-18 resolution was not at odds with the EU initiative to make aviation subject to the EU ETS. “The intent within ICAO to come up with a global MBM is not inconsistent with a group of ICAO members deciding that they will resolve upon a sectoral MBM whilst ICAO members as a whole decide upon the terms of a global solution.”
Jet’s reliance on the ICAO Assembly resolution for its case was also undercut, he argued, by the fact that EU member states imposed reservations on those paragraphs that Jet and the Indian Government relied upon.
“Jet assumes a binding consensus within ICAO, but that is not what the resolution as a whole says. Even if the resolution was capable of being binding, it cannot bind the EU member states which entered a reservation in respect of it.”
He noted the CJEU ruling that similar resolutions passed at earlier Assemblies were non-binding political declarations by ICAO contracting states, which was backed up by Article 38 of the Statute of the International Court of Justice that does not list resolutions of international organisations as part of sources which it is to follow.
“Finally, Jet refers to the need to apply fair and equitable justice in the present case. If I am right in my interpretation of the Directive, and that it is unaffected by the ICAO resolutions relied upon by Jet, then there is no room for the operation of these doctrines,” he concluded.
“For all these reasons I dismiss Jet’s appeal. Given that Jet had not reported its own emissions within the timescale provided for in regulation 21, the EA was obliged to determine those emissions under regulation 22. The ICAO resolutions cannot affect that obligation, nor can the directions from the Government of India.”
Link:
Determination of Jet Airways appeal
Sydney becomes first Australian airport to release a sustainability report
Fri 17 Apr 2015 – Sydney Airport has become the first Australian airport to release a sustainability report, which, it says, conforms to the Global Reporting Initiative’s G4 guidelines. The airport says the report responds to stakeholder feedback and supports the environmental, community engagement and other initiatives the airport is undertaking. During 2014 it received government approval for a five-year Environment Strategy that provides the strategic direction for the environmental management of the airport and outlines more than 100 ongoing actions and initiatives to minimise environmental impact and support sustainable growth. Another achievement during the year was Level 1 certification under the industry’s Airport Carbon Accreditation programme and the airport is now developing a revised energy savings and carbon reduction plan.
“Sydney Airport is committed to operating sustainably as well as efficiently, including assessing the impact of our business and making improvements where required,” commented CEO Kerrie Mather. “With 38.5 million passengers a year, we’re focused on responsibly managing the airport to support this growth while also enhancing the passenger experience. Our first annual sustainability report is the culmination of extensive engagement with and feedback from key stakeholder groups.”
Mather said the airport had made a significant investment in reducing waste, energy consumption and water usage, including recycling water in terminals and installing in-ground power for aircraft to improve air quality. She added a number of environmental awards had been received by the airport and its community engagement programme had resulted in investments totaling A$1.48 million ($1.15m) in charities and the community in 2014 through donations, partnerships and in-kind support.
“Late last year, we partnered with Conservation Volunteers Australia to deliver environmentally beneficial outcomes across our local community, including a bush regeneration programme at Kamay Botany Bay National Park,” she said.
Having achieved Level 1 certification in the Airport Carbon Accreditation Programme in May 2014, the airport is working towards Level 2 and is establishing methods, baseline and targets for year on year public reporting of energy consumption and greenhouse gas emissions. Sydney is joined in the programme by four other Australian airports: Brisbane, Adelaide, Parafield and Sunshine Coast.
In 2014, the airport offset the emissions from its vehicle fleet through Greenfield, a not-for-profit carbon offset provider that supports native forest restoration projects. This year it will undertake a climate vulnerability assessment to ensure that any relevant adaptation strategies are factored into future airport planning.
“Sustainability is a key priority for all airports and is increasingly important to airport passengers and stakeholders,” said Simon Bourke, Australian Airports Association Policy Manager. “It’s pleasing to see Sydney Airport leading the way by formalising its commitment to sustainability through its first sustainability report.”
Link:
Sydney Airport Sustainability Report 2014
Aviation emissions covered by the EU ETS edge higher in 2014 to over 54 MtCO2 as emissions from other sectors fall
Fri 17 Apr 2015 – Preliminary data released by the European Commission shows aviation emissions covered by the EU Emissions Trading Scheme (EU ETS) are likely to have increased by 2.6% in 2014 compared to 2013. Analysis by Carbon Market Data (CMD) of the verified emissions reports submitted by the March 31 deadline indicates aircraft operators conducting intra-EEA flights emitted 54.36 million tonnes of CO2 in 2014, compared to nearly 53 MtCO2 in 2013. Once all the emissions are finally reported and entered in the registry, emissions in 2014 are likely to reach around 54.7 MtCO2, estimates CMD. However, this is far lower than the 84 MtCO2 reported in 2012. Since then, the number of aircraft operators covered by the scheme has almost halved as a result of changes to the scope of the scheme a year ago. In the EU ETS as a whole, emissions fell by around 4.6% in 2014 to an estimated 1,809 MtCO2, said CMD.
Due to the changes to the Directive a year ago following an agreement between the EU institutions to continue with a reduced scope until the end of 2016 to enable the development of a global scheme, a decision was made to allow aircraft operators to defer reporting of their 2013 emissions for a year. The extra burden of reporting both 2013 and 2014 emissions by the March 31 deadline has resulted in not all operators meeting the requirement.
According to Brussels-based CMD, in 2012 1,178 aircraft operators then participating in the EU ETS reported their emissions. As a result of many smaller business aircraft operators being taken out of the scheme following the changes, the Commission estimates around 600 operators are now participating during the 2013-2016 period. Additionally in 2012, a number of airlines, including some based outside the EU, may have taken a one-off opportunity to report full-scope emissions for that year in order to take financial advantage of their free allocation of allowances.
As of last week, CMD calculates 429 operators have reported their emissions for 2013 and 410 operators similarly for 2014. The emissions data is collected from entries in the EU Transaction Log and although the deadline has passed, new data is still being added. Some operators, for example, have entered verified emissions for 2013 but not yet for 2014.
The next important deadline is April 30, when operators must surrender the required number of allowances to cover their emissions for both 2013 and 2014.
CMD analysis shows that low-cost carrier Ryanair was by far the highest emitter on routes within the European Economic Area, racking up over 6.6 million tonnes of CO2 (see table below). In 2013, it was followed by Lufthansa (4.4 MtCO2), which in turn was overtaken in 2014 by easyJet (4.5 MtCO2). Lufthansa’s reported emissions fell to just under 4 MtCO2 in 2014, a drop of around 10%.
The table of top 15 emitters shows Thomson Airways may have made a financial gain of around €150,000 ($160,000), based on current carbon market prices, from the scheme as a result of the free allowances it has been allocated for 2013 and 2014 exceeding reported emissions for both years.
The fall in emissions in 2014 from the previous year in the EU ETS as a whole means the scheme has reached its target of emissions falling below 1,816 MtCO2 by 2020 six years year ahead of schedule, says climate campaign and research group Sandbag. However, this has also led to a huge surplus of allowances in the system that is continuing to grow and moves to find a political agreement to fix the problem have been slow. In late February, the European Parliament’s environment committee (ENVI) adopted a revised proposal to establish a Market Stability Reserve (MSR), a mechanism designed to automatically regulate the supply of allowances in the system. An agreement between the EU institutions on a start date is still under discussion.
Links:
Carbon Market Data (more data on the Aviation EU ETS is available after free registration) , European Commission – Aviation and the EU ETS
Top 15 airline emitters covered by the EU ETS in 2013 and 2014 (source: Carbon Market Data):
Breakdown of aviation emissions and allocated allowances by EU State for the years 2012-2014 (source: Carbon Market Data):
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Note 2014 emissions are likely to rise when full reporting is completed
Brazilian rainforest to benefit from JetBlue decision to offset the GHG emissions from all flights during April
Thu 16 Apr 2015 – US carrier JetBlue is offsetting CO2 and other greenhouse gas emissions (CO2e) for all its scheduled flights during the month of April. Calculated on the basis that it will burn around 57.1 million gallons of jet fuel, this amounts to around 500,000 tonnes of CO2e. The airline and its long-term carbon offset partner Carbonfund.org Foundation will purchase the equivalent offsets that will be used to protect a 400,000-acre (162,000ha) rainforest in Brazil. JetBlue is hoping the effort will encourage its customers to purchase carbon offsets in the future and in a further initiative, the city within its network whose members donate the most TrueBlue frequent flyer points to Carbonfund.org during the month of May will receive a new greenspace, such as a park or garden.
Offsets purchased by travellers booking with JetBlue are also used to fund renewable energy and carbon-reduction projects in and around cities served by the airline, dubbed BlueCities. In one such project, JetBlue is sponsoring the planting of 25,000 trees by the US Forest Service, which is expected to be completed by August 2015, following a fire that occurred in 2013 in the Angeles National forest in California.
Another is a landfill gas destruction project outside Salt Lake City, Utah, in which harmful methane is captured and converted into electricity. Help in funding this project has resulted following a decision to offset from last October the CO2e emissions for an entire year on all Airbus A321 flights between San Francisco and New York JFK.
“Within the bounds of what technology currently allows for, we are reducing our greenhouse gas emissions wherever possible,” said Sophia Mendelsohn, Head of Sustainability at JetBlue. “As traditional fuel is still crucial to our operation, we won’t be able to completely eliminate them. However, we offset to lessen our impact. Protecting existing forests is a logical way to fund emission absorption and helps us all adapt to a changing climate.”
Over the past seven years of its partnership with Carbonfund.org, JetBlue says it has purchased offsets totalling over 158,000 tonnes of GHG emissions, including 16,329 tonnes in 2013 alone.
Commented Eric Carlson, President of Carbonfund.org Foundation, which has over 2,000 business and non-profit partners: “With JetBlue’s support, we have been able to develop several forest conservation projects that are protecting nearly one million acres of threatened tropical rainforest, while simultaneously helping local communities and preserving areas with some of the highest levels of biodiversity.”
JetBlue also runs an annual campaign, called ‘One thing that’s green’, in which customers and crew members are encouraged to undertake one green initiative to reduce their carbon footprint. Nearly 3,000 crew members and community volunteers have planted more than 3,500 trees and cleaned nearly three tons of trash in cities including New York, Boston, Los Angeles and Orlando.
In last year’s campaign, JetBlue’s Facebook customers in network cities were asked to vote on where the airline should build a new greenspace. Hartford, Conn. topped the list with 42,000 votes and will receive its greenspace on May 18.
“We are working to change our customers’ behaviour when purchasing flights. As an airline, we are always considering our environmental impact. As we work to lessen our footprint, we are encouraging our customers to also take action to lessen their impact,” said Icema Gibbs, JetBlue’s Director CSR.
Links:
JetBlue Airways – Offsetting , Carbonfund.org
Red Rock’s first commercial scale renewable jet fuel refinery edges closer as it secures venture capital funding
Thu 16 Apr 2015 – Construction could start as early as this summer of Red Rock Biofuel’s first commercial scale refinery in Lakeview, Oregon to produce renewable jet fuels from woody biomass sourced from forests and sawmills. This follows the announcement of a partnership with venture capital firm Flagship Ventures that includes an undisclosed investment in Red Rock. The cost of the refinery is put at $200 million, $70 million of which will come from an award last year by the US Departments of Agriculture, Energy and Navy, and production of jet fuel, diesel and naphtha is expected to start around 18 months after construction begins. Last September, Southwest Airlines announced an offtake agreement with Red Rock to purchase three million gallons of the renewable jet fuel for use at the low-cost carrier’s San Francisco Bay Area operations.
The refinery will take residues from nearby forests and using Red Rock’s proprietary process will be converted into syngas, cleaned and sent to a Fischer-Tropsch unit for onward conversion to a high-grade syncrude. Around 15 million gallons of renewable, liquid transportation fuel are expected to be produced annually from 140,000 dry tons of woody biomass. The fuel would be hauled to customers in Northern California or Pacific Northwest markets.
Flagship Ventures will provide financial and strategic expertise to Red Rock as well as helping secure additional funding and customers. Brian Baynes, a Flagship partner and now on the board of Red Rock, said he expects to see an increasing demand for renewable fuels.
“With its innovative technology and strong team, Red Rock has created a market-leading position in the woody biomass conversion sector,” he said. “Their product saves money for customers and offers a stable alternative to the volatile crude oil market, while reducing carbon emissions – a growing priority for companies.”
Terry Kulesa, co-founder and CEO of Red Rock said the company was formed as a result of devastating wildfires in the Western US and the rising demand for drop-in, cost-effective renewable jet and diesel fuels. “By removing and repurposing the excess biomass that fuels destructive fires, we see great potential in the ‘waste to value’ sector, creating cleaner fuels, healthier forests and delivering sustainable biofuels,” he said.
New jobs are promised in the construction and running of the refinery and in local forests, although some local residents are concerned that the facility will add to the town’s already poor air pollution problem, with levels of particulate matter caused by wood stoves exceeding federal limits. Several environmental groups have petitioned the US Environmental Protection Agency to have Lakeview designated as a ‘non-attainment area’ under the Clean Air Act. If successful, Red Rock could be required to reduce or offset its air emissions.
The company says it plans to expand its team during the year and is looking at other possible locations in the US where there is a substantial timber industry presence, and is considering countries such as Canada, Australia and Brazil.
Links:
Red Rock Biofuels , Flagship Ventures
Heathrow proposes to reduce domestic passenger charges by increasing environmental landing fees
Wed 8 Apr 2015 – With domestic connectivity having fallen as airlines increasingly use valuable slots for international flights, London’s Heathrow Airport is seeking to turn the tide by reducing its domestic passenger charges by a third, with the discount to be paid for by raising environmental landing charges. The hub airport is proposing to cut its passenger charge to airlines flying from Heathrow to domestic airports from £29.59 ($44) to £19.59 from the start of next year. With passenger charges capped by the government regulator, the reduction would be covered by increasing noise and emissions charges from 21 per cent to 28 per cent of the total paid by airlines to the airport. This will further encourage airlines to switch to cleaner and quieter airplanes, says the airport. Meanwhile, Heathrow has published its sixth Fly Quiet league table of airline noise performance that rates the top 50 carriers operating at the airport.
Domestic routes served at the capacity-constrained airport have fallen from 18 in 1990 to just seven today. A recent report by the National Connectivity Taskforce recommended that this trend should be reversed in order connect the UK’s regions to global markets. In order to encourage better utilisation of European slots and encourage fuller planes, Heathrow is also proposing a £5 reduction to £24.59 for Europe-bound passengers.
To cover the cost of the discounts, Heathrow is seeking to almost double NOx emission charges from £8.57 ($12.80) per kg to £16.51 per kg. Although 99% of Heathrow aircraft movements meet the quietest Chapter 4 and Chapter 14 international noise standards, those carriers operating noisier Chapter 3 aircraft will pay more. The airport operator says it is already engaging with those carriers “to better understand” when their noisier aircraft will be replaced.
“We’re serious when we say Heathrow is committed to making sure that businesses across Britain can benefit from the connections to growth markets that only the UK’s hub can provide, whilst incentivising only the quietest and cleanest planes to operate from Heathrow,” commented its CEO, John Holland-Kaye.
Although it cannot force airlines to reduce fares on domestic routes, Heathrow believes “there is a reasonable expectation” the savings will be passed on to passengers.
The airport says it has already held a number of informal engagement sessions with airlines and representative bodies over the proposals but is inviting email responses from interested parties by May 14.
The quarterly Heathrow Fly Quiet League is now in its second year and enabling the airport to better monitor progress in the noise performance of airlines serving the airport. The airlines are ranked according to six noise related criteria: noise efficiency, noise certification, arrival operations (continuous descent approaches), departure operations (noise preferential route adherence) and two night-time arrivals operations. Each metric is assigned a red, amber or green status based on the performance bands set for that indicator. As a result, operators towards the top of the league will have more green scores than those towards the bottom although because scores fluctuate within a band, it is possible for an airline with all green scores to be ranked lower than those with amber or red scores.
The latest quarter, covering October to December 2014, shows airlines are moving away from operating noisier aircraft at the airport and are increasing use of continuous descent approaches (CDAs), which require less engine thrust and keep the aircraft higher for longer, so helping to reduce noise.
Although British Airways’ short-haul operations continue to be ranked highest (see table below) Heathrow singles out Cathay Pacific for its performance over the past year due to its improved adherence to CDAs and its continued engagement with the airport’s technical teams. US Airways is also praised for its impressive jump of nine places in the league due to its use of quieter, more modern aircraft during a busier period of activity for the airline.
The airport’s 10-point plan to cut aircraft noise, called the Blueprint for Noise Reduction, and the Fly Quiet League has driven improvements, says the airport, which claims aircraft flying in and out are on average 15% quieter than those flying in the fleets of the same airlines at other world airports.
“Through hard work and open communications between us and airline partners, we have assured quieter skies for local residents over the past year,” said Heathrow Sustainability Director, Matt Gorman. “Undoubtedly, more work remains to be done, but we are encouraged by the improvements we have seen this year, and what is more, the innovation of airlines in finding ways to reduce noise and be better neighbours to residents.”
Links:
Heathrow – Community & Environment , Heathrow – Fly Quiet
Fly Quiet League Table Oct-Dec 2014:
COMMENTARY: Ending international aviation’s $65 billion fuel tax exemption an essential step towards decarbonisation
Thu 16 Apr 2015 – With the Paris COP only eight months away, the expectation remains that an agreement to cover all Parties, all sectors and all emissions can be reached. The objective is to limit any global temperature increase to below 2 degrees C, with many calling for a more ambitious target. Whatever the exact target, there is broad acceptance that it can only be achieved by the widespread decarbonisation of the world economy. This approach is now well recognised including by the key actors, China, the EU and the US, who are engaging on a serious energy transition to renewables.
For aviation, decarbonisation must include phasing out the fuel tax exemption which is inflating demand but is without any rational economic basis. This exemption, as Alejandro Piera points out in his recent GreenAir article, is rooted in legal agreements, but that is no reason to exempt it from scrutiny, argues Andrew Murphy.
Efforts to combat climate change are often short on good news. However, the recent statement from the International Energy Agency that emissions have stabilised in 2014, even though global economic growth continues, shows that it is possible to decouple the two. Carbon emissions from international aviation though continue to grow unabated. With international air passenger demand projected to grow annually at around 4.1% – and potentially more if oil prices stay low – any regulatory and technological moves to reduce emissions will surely be outstripped by growth from the sector. Demand is growing at a greater clip than global economic growth partly due to the fuel tax exemption, which is a distortive subsidy driving demand above what it otherwise would be.
ICAO is now in its fifth year of developing a CO2 standard for new aircraft that is intended to reduce emissions from these aircraft beyond the business-as-usual scenario. States have a responsibility to push back on manufacturers’ – and incredibly IATA’s – opposition and adopt a standard that actually reduces emissions and contributes to ICAO’s goal to improve fleet-wide fuel efficiency by 2% annually. Applying the standard only to new aircraft types and based upon 2016 state-of-the-art technologies – as insisted upon by industry – would provide absolutely no benefit for either the environment or consumers who would end up paying more and potentially having to fly less to reduce emissions. But you may never be able to prove that because ICAO intends to keep all the real details secret.
To bridge the gap between emissions growth and reduction measures, ICAO and industry plans a global offsetting scheme for emissions over 2020 levels (the global market-based mechanism proposed at the 2013 ICAO Assembly) coupled with an increase in the use of alternative fuels. The offsetting scheme is due to be approved at the 2016 Assembly and come into force in 2020.
However, prospects for ICAO to agree stringent quality criteria for offsetting are poor: at worst they will accept all programmes, including voluntary carbon offsets, and at best they will merely defer to the UN’s Clean Development Mechanism (CDM), including its flawed rules on proving that its emissions reduction offsets are additional to the business-as-usual scenario. Even so, offsets by their nature will not see emissions reductions in the aviation sector, nor is a 2020 carbon neutral growth target anywhere near in line with the global objective of limiting a temperature increase to under 2 degrees C. A failure to act by international aviation will place a greater burden on all other sectors of the economy.
The airline industry predicts a massive increase in the use of alternative fuels, although most experts predict an uptake of only a few percentage points in the coming years. More optimistic projections remain purely speculative at the moment. Whether these alternative fuels will actually lead to emissions reductions on a lifecycle basis and after taking into account of indirect land use change are major question marks ICAO is yet to resolve.
All these issues point to aviation remaining a persistent laggard in efforts to decarbonise the world economy, meaning further measures are required. One obvious measure is to finally end aviation’s generous fossil fuel subsidies.
As the Piera article outlines in detail, international aviation benefits from a fuel tax exemption that is rooted partially in the 1944 Chicago Convention, but is largely the result of ICAO and industry lobbying to enshrine the exemption in thousands of bilateral Air Service Agreements (ASAs). This exemption amounts to the mother of all global sectoral fossil fuel subsidies – matched only by international shipping – that is artificially inflating the growth of international aviation.
International air transport, for all the economic and social benefits it brings, remains the preserve of a privileged minority – some 140-280 million – of the world’s population. These travellers overwhelming constitute the wealthiest percentile.
Based on converting international aviation CO2 emissions totalling 477 million tonnes in 2012 into fuel and taxed at €0.33 ($0.35) per litre (the minimum kerosene tax stipulated under the EU Fuel Directive, but which has never been implemented for the legal reasons outlined in this article), we calculate the fuel tax exemption amounts to an annual subsidy of €61 billion ($65bn) per annum to the sector. Using ICAO’s carbon calculator, which estimates a return flight between Europe and the US generates 782kg of CO2 per economy passenger, this works out at a generous subsidy of almost $102. All the while, those worst affected by climate change remain the world’s poorest and most vulnerable, as demonstrated by the recent Pacific cyclones. Legal realities may explain, but they cannot justify, what is essentially a hefty tax break enjoyed by the corporate world and the world’s wealthiest at the expense of its poorest.
Piera describes ICAO’s support for this exemption as a “logical approach” given the organisation’s mission to develop international aviation. However there is nothing “logical” about this subsidy especially when aviation is by far the most carbon intensive form of transport and climate change now the greatest challenge facing mankind. The IMF and the World Bank have not held back in describing the fuel tax exemption as an anomaly, and with negative consequences for the environment. While the exemption may have had some merit at the dawn of international aviation in the aftermath of WWII, it has no place in the 21st century, when the greatest challenge is to decarbonise our economies and arrest the growth in global emissions.
Piera identifies a path towards indirectly ending the exemption by increasing embarkation (departure) taxes on passengers, which are levied by many countries around the world. It is certainly an option, though once again such a move is likely to be predictably opposed by the airline industry as US airline trade body A4A has done with its legal challenge to the German departure tax.
Efforts to end this subsidy must target that subsidy’s origin – the relentless, outdated and counterproductive lobbying by ICAO and industry, a product of institutional bias and the airline sector’s profound failure to appreciate that its only future is a sustainable one. ICAO continues to promote the fuel tax exemption, highlights it as a key element for inclusion in all ASAs and restates its position in various Council Resolutions. The organisation founded to oversee the peaceful development of civil aviation continues to see fit to lecture States on national tax policies.
As the world – both developed and developing – steps up efforts to decarbonise their economies, such policies are increasingly unacceptable. It is essential States move to reform ICAO’s position on fuel subsidies to bring them into line with well-established global objectives to phase out subsidies for fossil fuel consumption. This should begin with ending ICAO’s opposition to fuel duty in the form of an updated Council Resolution, which should garner support from those States leading on climate change, and those States facing its worst effects.
Change will not materialise overnight, but without first steps it will never come. Such a move should be matched by increased departure taxes, the introduction of fuel duty in the major economies starting with intra-EU flights and an increase in the US domestic aviation gasoline tax – the world’s two largest aviation markets. What an irony that the two largest domestic aviation fuel taxes worldwide are levied in India and Brazil while foreigners jetting in pay nix.
Piera describes the legal barriers to this outcome, but the reality is that most measures to rein in international aviation emissions face legal barriers. It is still unclear, for example, how a global market-based mechanism to offset emissions above 2020 levels will be legally established. Maybe the model ICAO paragraph that so embeds the fuel tax exemption in ASAs will need to be deployed. In such a laborious but potentially necessary process, perhaps one could replace the other?
Legal barriers cannot be ignored and a strategy to overcome them must be drafted. They should not, however, be used as an excuse for inaction. This fossil fuel tax exemption, so long as it exists, will continue to run counter to global efforts to decarbonise and has no place in the 21st century.
The author, Andrew Murphy, is with Brussels-based NGO Transport & Environment (T&E).
