Dutch government urged by airlines to drop tax proposals as NGOs take it to court over ICAO aircraft CO2 standard
Thu 14 Dec 2017 – Eight years after ditching an air passenger ‘eco’ tax introduced a year earlier, the Dutch government is reportedly planning new aviation taxation measures to address the sector’s environmental impact. International airline associations have written to the Dutch finance minister urging the government not to proceed with the policy. They believe the government envisages a Europe-wide aviation tax resulting from negotiations due in 2019 over the Paris climate objectives and a tax on noisy and polluting aircraft. If the two measures are deemed insufficient then an aviation passenger tax may be introduced in the Netherlands from 2021, they fear. Meanwhile, the government is being taken to court by three NGOs for refusing to release ICAO documents on the global aircraft CO2 standard adopted by the UN agency in March this year.
A Dutch aviation tax could generate around €200 million ($230m) annually from the sector, but KLM and Schiphol Group say it would not help the environment and instead would interfere with maintaining a competitive aviation market. When an air passenger tax was introduced in July 2008, it was expected to raise in the region of €300 million a year but was scrapped a year later following a steep decline in passenger traffic at the main Dutch airports, particularly at Amsterdam Schiphol, with air travellers said to have taken flights from airports in Belgium and Germany to avoid the tax (see article).
Not only would the proposed new tax would have the same negative impact on the Dutch economy, it would contradict international law, standards and principles, claim the nine associations – IATA, ERA, AIRE, AFRAA, A4A, AACO, AAPA, ALTA and NACC. The taxation policy would be “at odds with the principles that underlie all of ICAO’s requirements regarding environmental levies,” they said, pointing out that the resolution underpinning ICAO’s CORSIA scheme was to be the sole market-based measure applying to CO2 emissions from international aviation. “Moreover,” they added, “intra-EU flights are subject to the EU Emissions Trading Scheme, in which airlines already pay their contribution towards reducing the environmental impact.
“As an absolute minimum, the associations request that the Dutch government undertakes an independent evaluation of the economic and environmental impact of the policy and holds an open and constructive public consultation process before making any final decisions.”
In October, another airline association, Airlines for Europe (A4E), released a study it commissioned from PwC that showed abolishing the German air passenger tax would boost the country’s GDP by €67 billion ($79bn) cumulatively over the next 12 years. PwC estimated that Germany’s revenues from air passenger taxes would raise €1 billion in 2017.
“The study demonstrates the impact of passenger taxes, which hinder economic growth and tourism. Countries that have scrapped them have seen a boom in air traffic, which has benefited their economies,” said Thomas Reynaert, A4E’s Managing Director. “Removing all air passenger levies would add more than 24.6 million passengers by 2020.”
The study estimated that around 79% of the additional passengers would come to Germany for leisure purposes and the remaining 21% for business reasons. Currently, air passenger taxes are collected in Austria, Croatia, France, Germany, Greece, Italy, Latvia, Luxembourg, Norway and the UK, with Germany the second largest collector after the UK.
NGOs counter that the European sector is under-taxed as it escapes taxation on its aviation fuel and airline tickets.
The standard was ineffective as a result of commercial pressure, said the NGOs, who claimed that two-thirds of the observers on ICAO’s rule-making environment committee CAEP were industry lobbyists and accused aircraft manufacturer Airbus of having undue influence in drafting the EU’s position on the CO2 standard.
“We’re exclusively reliant on tidbits of information from ICAO and governments about how they are addressing aviation emissions,” said Andrew Murphy, Aviation Manager at T&E. “That makes it difficult for civil society groups and outside experts to examine claims about ICAO’s effectiveness. Only by making such reports public is it possible to conduct a fair assessment of ICAO’s efforts to take climate action.”
Supported by T&E and ClientEarth, the lawsuit is being taken by Natuur & Milieu at Utrecht district court to appeal a previous decision by the Dutch government not to disclose the information.
“Emissions from aviation have a global impact that cannot be ignored. The public has the right to access information on how emissions from aircraft will be reduced and to participate in decisions that affect their health and environment,” said Ugo Taddei, a clean air lawyer at ClientEarth. “By making these decisions behind closed doors, the Dutch government is breaking EU transparency rules and putting business interests before those of the planet as a whole.”