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Global response of aviation industry to climate challenge far too timid and complacent, says EU transport chief

Global response of aviation industry to climate challenge far too timid and complacent, says EU transport chief | Taxes,Henrik Holohei

Tue 30 July 2019 – Arguing the ICAO CORSIA global carbon offsetting scheme is a sufficient tool in meeting the industry’s contribution to the climate challenge is not enough anymore, the European Commission’s Director-General for Mobility and Transport, Henrik Holohei, said in a keynote speech at last week’s meeting of the International Aviation Club in Washington DC. In a hard-hitting message, he said societal and political priorities in Europe had evolved and sustainability had become the new number one challenge for aviation, requiring the airline industry to “step up”. Proposals on the taxation of kerosene and passengers were being discussed at the European level, he told the US audience. His comments follow a move by France to impose an ‘eco-tax’ on tickets for all outgoing flights and consideration by Germany on raising its aviation tax to make flying more expensive in order to cut emissions.

 

Managing the environmental footprint of aviation is arguably the greatest current challenge facing the sector, said Holohei.

 

“In order to maintain its ‘licence to grow’ – one pessimist referred to its ‘licence to exist’ – emissions have to come down,” he warned. “In Europe, we observe that peoples’ mindset is changing very fast and without the slightest doubt, public demand and societal expectations for cleaner and much more sustainable air transport will grow rapidly in the coming years.

 

“We already see these significant and disruptive signs that we did not witness just a year or two ago. If industry is not delivering credible responses to show that it can continue to grow while reducing emissions, this pressure will only mount and, sooner than later, regulatory intervention follows. Europe’s sentiment and societal expectations on this are today ahead of other regions but, trust me, it is just a matter of time before this wave spreads to the rest of the world.

 

“If this challenge is not constructively and jointly met then individual governments will consider unilateral action – because they are under increasing political pressure to do so.

 

“I have to say that the global response of the industry has so far been very timid and complacent. Far too timid. Arguing that CORSIA is a sufficient tool is not enough anymore. I think the industry has not been able to grasp nor understand the changing societal trends and expectations. It is high time now. This innovative industry just cannot manoeuvre itself into being defensive on this important global and political issue.”

 

He added that although continued fuel efficiency gains had partially decoupled emissions from expanded air transport services, the sector was one of the few where emissions continued to grow.

 

“This is not sustainable,” he said. “The airline industry has to step up and not hide its head in the sand. I would also encourage considering all actions that show clear commitment to sustainability and which display the societal responsibility of the sector.”

 

Holohei acknowledged the industry was making progress on the issue, “but the overall public perception does not recognise this at all.”

 

He praised airlines like KLM for being “ahead of the curve” over its latest ‘Fly Responsibly’ campaign (see article) and others that had announced becoming plastics-free. There was no “magic formula” to make aviation much more sustainable in the short term, he admitted.

 

“It is without doubt that a basket of different measures is the best and only way forward. Innovation, new aircraft types, new and more efficient engines, and more efficient use of airspace are just a few examples,” he said, adding the Commission was currently working on proposals to incentivise the use of sustainable aviation fuels (SAF), including blending mandates.

 

However, he recognised there were challenges related to the infrastructure and accelerated uptake of SAF that required a regulatory and legal framework to incentivise investment in production and innovation.

 

“I have discussed this idea with a number of key airline CEOs as well as fuel producers and they all agree that this is definitely one additional avenue that needs to be pursued,” he said. “So stay tuned and hear how we intend to take our proposal forward.”

 

He regretted ICAO had not been able to agree SAF quantitative targets. “A global commitment through ICAO would have been a strong message but I am sure we will eventually get there,” he said. “Europe is ready to show the lead.”

 

On European taxation of kerosene and passengers, Holohei said direction and action would be decided by the incoming new Commission and “our new political masters”.

 

Germany’s Environment Minister Svenja Schulze said recently a Europe-wide approach to aviation taxation would be the best way to tackle the sector’s growing emissions but the country would act sooner if necessary.

 

“I believe air traffic must bear the costs of greenhouse gas emissions and this must be reflected in air fares,” she told the Rheinische Post, adding that flying on certain routes was less costly than travelling by train.

 

French Transport Minister Elisabeth Borne announced a tax of €1.50 ($1.70) on economy class tickets for domestic and EU flights, rising to €18 ($20) on business class tickets for flights outside the EU. The tax is expected to raise around €180 million ($200m) annually from 2020, with the money raised invested in less-polluting alternative forms of transport such as rail.

 

The Dutch finance ministry recently held a conference in The Hague to bring government representatives from other EU countries to discuss the issue of aviation taxation and carbon pricing (see article) and possible joint action.

 

Responding to the growing call for more action on aviation emissions, trade body Airlines for Europe (A4E) said European airlines are expected to pay over €5 billion ($5.6bn) in environmental taxes and payments under the EU Emissions Trading System (EU ETS) in 2019. A4E estimates EU ETS payments this year will reach €590 million ($650m), a 59% increase over 2018. It also points out that more than half the States so far participating in the voluntary phases of the global CORSIA scheme from 2020 are European.

 

In addition, it said its airline members would be investing €169 billion ($188bn) in environmentally-friendly technologies until 2030, which included the purchase of around 800 fuel-efficient aircraft, and over €1 billion to help fast-track the production of sustainable aviation fuels in Europe through partnerships.

 

“The claim that airlines are not paying environmental taxes is completely false,” said Michael O’Leary, Chairman of A4E and Ryanair CEO. “This environmental debate has been badly misinformed. Globally, European airlines are the only airlines paying environmental taxes. More aviation taxes are a knee-jerk reaction that will undermine European competitiveness and particularly hurt the integration and free movement of EU citizens, especially for peripheral and island Member States such as, for example, Ireland, Spain, Portugal and the Baltic States.”  

 

Added A4E Managing Director Thomas Reynaert: “The fact is, EU policy-makers have missed an opportunity to reduce aviation emissions by failing to reform the European Sky or by making sustainable fuels sufficiently available for aviation. Rather than introducing new taxes, which do nothing to make flying more sustainable, EU governments should recognise and support airlines’ sustainability initiatives with better research and development opportunities.”

 

Meanwhile, ICAO has posted a working paper (A40-WP/59) that proposes revisions to the CORSIA resolution (A39-3) passed at its 2016 Assembly in respect of a new resolution to be considered for adoption at September’s 40th Assembly. Paragraph 18 states the Assembly “Determines that the CORSIA is the only global market-based measure applying to CO2 emissions from international aviation so as to avoid a possible patchwork of duplicative State or regional MBMs, thus ensuring that international aviation CO2 emissions should be accounted for only once.”

 

 

 

Editor’s note: European taxation and carbon pricing of aviation will be a key session at this year’s Aviation Carbon 2019 conference (co-organised by GreenAir) to be held in London on November 4/5.


 

 

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