Growing support among EU environment ministers for applying further carbon pricing on aviation emissions
Wed 20 Mar 2019 – A recent proposal by the Netherlands finance ministry for an EU-wide aviation tax to deal with the sector’s growing emissions has received backing from a Belgian environment minister at a meeting of the Council of European Environment Ministers. The call was supported by France, Sweden and Luxembourg. The Belgian minister, Jean-Luc Crucke, asked for the issue to be fully debated at the next Council meeting in June. He said a carbon pricing system should be applied to aviation that was in fair competition with other forms of transport, such as rail. The Netherlands is planning an international conference with EU States, also in June, to discuss carbon pricing and aviation, and how States can work together. The UK government said last week it will look at whether travel providers such as airlines should be required to offer carbon offsets to their customers.
In a statement to the Environment Council, Crucke said aviation emissions in the EU had increased in the region of 21% over the last three years. “Belgium believes further efforts are necessary to tackle this increase in emissions from the aviation sector and to stop other economic sectors in Europe having to compensate for this increase. A key element should be fair pricing for air transport.”
He said no carbon pricing or taxation was applied to jet kerosene and although rail transport emitted considerably less emissions, it was taxed more and as a result it was often more expensive to take the train rather than the plane.
“The EU has to play a leading role in the discussion and this has to be done as soon as possible,” he said.
Crucke called for a European pricing system that was fair and coordinated, took into account the externalities of air transport, applied the ‘polluter pays’ principle and established fair competition with other forms of transport. “A European pricing system could encourage airlines and the aviation industry to take the necessary measures to ensure the transition towards a climate-neutral economy,” he told EU environment ministers.
Brune Poirson, Secretary of State at France’s ecological ministry, noted civil aviation was already decarbonising through the EU ETS and shortly through ICAO’s CORSIA mechanism.
“Nonetheless, France fully shares the diagnosis provided by the Netherlands and Belgium,” she said. “We need to go further so that aviation fits into the framework of the Paris Agreement.
“We ask fellow citizens to make efforts in their everyday lives to cut vehicle emissions, for example, while not acting on an important sector like aviation. Consistency is the key word here if we are to have public acceptance of environmental policy. France fully supports thinking about this at the European level.
“All appropriate avenues – such as taxing kerosene and applying VAT – should be investigated, without having any particular instrument from the outset. We also need to think about how these instruments would fit together and the June conference might be an opportunity to do that.”
She added the issue should be part of the working programme for the next five-year term of the European Commission, which will start later this year, and be incorporated into the overall legislative framework.
Sweden’s Minister for the Environment and Climate, Isabelle Lövin, said her country was extremely committed to reducing emissions from aviation. “We recently implemented a tax on air travel and we will be introducing additional measures that may not be directly related to carbon pricing or taxing aviation but we will be investigating taking further action at the national level,” she reported. “However, it will be extremely useful to have an enabling order at the EU and international level, which is crucial to having a level playing field and acceptance for any measures we need to take to reduce emissions from aviation, so we support the issue.”
Luxembourg’s environment minister, Carole Dieschbourg, said with the ratification of the Paris Agreement it was now time for urgent action to implement it in every sector, including aviation.
“The ‘polluter pays’ principle is one we’ve always espoused when it comes to environmental policy,” she said. “Charging so that external costs are factored in is an important step on the way to a carbon-neutral Europe. We would like to discuss every option and explore the analysis of the impacts on business and the environment, which would allow us to improve the consistency between different sector policies.”
Stientje van Veldhoven, State Secretary for Infrastructure and Water Management, said the Netherlands had a strong preference for an EU approach with respect to aviation taxation since divergent national approaches could fragment the EU’s single market, increase tax uncertainty and destabilise a level playing field.
“We only have one planet, and if we do not reduce emissions from aviation then we will have to reduce elsewhere, so we need to be credible and consistent, and work on aviation. It should better reflect environmental and social costs in the ticket pricing.”
She said the Netherlands would be sending out invitations shortly to its high-level conference on June 20-21, in which the focus would be on carbon pricing and aviation taxation.
Closing the debate, the European Commissioner for the environment, Karmenu Vella, said between 1990 and 2016 there had been a near-doubling (+95%) of CO2 emissions from flights departing the EU28 and EFTA countries. He said there was a need to integrate the negative societal costs relating to GHG emissions, air pollution and noise into transport tax systems.
“These external costs are currently not sufficiently factored into the pricing mechanisms and consequently the cost of these external effects is carried by society as a whole,” he said. “Smart taxation will create incentives for using the most climate-friendly modes and support behavioural changes.”
He said there were several existing policy tools for dealing with aviation and the Commission would look at the issue when preparing for the next review of the EU ETS directive. Another potential instrument, he suggested, could be the energy taxation directive, which aims to enhance a level playing field in the single market among energy consumers and suppliers. The Commission is currently reviewing the directive and Vella said it would assess the tax treatment of the aviation sector.
“Following the results of the evaluation and taking into account the global policy context, the Commission will assess the need to make new legislative proposals to better take into account the environmental challenges and align taxation of energy accordingly,” he said.
Meanwhile, in his Spring Statement last week, the UK’s Chancellor, Philip Hammond, announced the government’s intention to give the public the option to travel ‘zero carbon’. It will launch a ‘call for evidence’ to explore consumer understanding of the emissions from their journeys and their options to offset them. The consultation will also look into whether airlines and travel providers should be required to offer carbon offsets to their customers.
The UK government is currently defending a series of legal challenges in the High Court brought by local authorities, the Mayor of London and environmental campaigners against its decision to approve a new runway and expansion at Heathrow Airport. A challenge by Friends of the Earth argues the decision is unlawful “fundamentally because it failed to have regard to the desirability of mitigating climate change in the context of the UN’s Paris Agreement and the non-CO2 contribution of aviation to global warming.”