Air travel is a major contributor to pollution and global climate change. In order to make the sector pay its due, France is set to introduce a tax on airlines to raise around 180 million euros, starting in 2020. The new French tax will be 1.5 euros per flight within France or the EU, three euros for economy flights out of the EU, and nine euros for intra-EU business class. The tax will go up to eighteen euros for business class outside the EU, but transit flights will remain untaxed.
“We have decided to put in place an eco-tax on all flights from France”, Transport Minister Elisabeth Borne told a news conference. The proceeds of the tax would be used to finance more eco-friendly daily transport in France, such as trains. The government also expects to raise an additional 140 million euros from the reduction of tax benefits on carbon-heavy diesel used in trucks.
It’s a significant move, but one that activists say won’t really affect consumer behaviour in a substantial manner – and a low tax, compared to other countries with similar laws on the books. The Brussels-based NGO Transport and Environment (T&E) estimates that similar taxes raise one billion euros in Germany, and more than three billion in the UK.
“The government is finally targeting tax breaks for the most polluting industries such as trucking and airlines, but these modest measures will not significantly reduce greenhouse gas emissions”, said Climate Action Network’s Lorelei Limousin.
Currently, tax exemptions for airplane fuel cost French taxpayers almost four billion euros annually. But the French government has also stated that it wants the new European Commission to push to end global tax exemptions for jet fuel to curb the sectors immense carbon dioxide emissions. France has also reached out to the Netherlands to convince additional European nations to increase taxation on airline travel.
Prime Minister Emmanuel Macron has made the environment a key pillar of government policies, which has resulted in both praise and pushback. A tax on diesel fuel was rolled back following the “yellow vest” protests.
Such protests are unlikely to occur this time – while almost everyone needs to drive, much fewer people need to fly. Andrew Murphy, air travel specialist at T&E, said the new policy was “a more equitable tax. Driving a car is often unavoidable, but frequent flyers tend to be wealthy urbanites”, he said.
There is a “feeling of injustice among our citizens regarding the taxation of airline transport”, said Transport Minister Elisabeth Borne at a press conference. “With the eco-contribution, air transport will play its part in financing the daily transport of all our citizens”, she added on Twitter. “It is a response to the ecological urgency and sense of injustice expressed by the French.”
However, a similar tax on kerosene, comparable to taxes on petrol, or car gasoline, remains out of reach. This tax exemption dates back to 1944, and was meant to foster international travel and cooperation. However, an EU-wide tax would be difficult to implement as such taxes remain a national matter. Furthermore, Southern European states rely heavily on tourism, and making flights too expensive would negatively impact their economies.
Pushing Back
Unsurprisingly, France’s airlines are not enthusiastic about the new tax. Airline shares, across Europe, took a nose-dive after France announced the news, with Air France (AIRF.PA) down 5.4 percent – the largest tumble in more than two months – Ryanair (RYA.I) down 4.8 percent, EasyJet (EZJ.L) down 4 percent and Lufthansa (LHAG.DE) down nearly 3 percent.
Air France said this new tax would significantly hurt the airline’s competitiveness and incur them over sixty million euros of additional costs, annually. It also claimed it’s already operating at a disadvantage: of the 50 percent of flights it operates out of France – most of them on the domestic network – losses totalled over 180 million euros in 2018, before taxes.
Now, this tax would further limit the French carrier’s ability to invest in planes that pollute less. “This new tax would significantly penalise Air France’s competitiveness”, the French arm of Air France-KLM said in a statement. “The company needs to strengthen its investment capacity to more rapidly reduce its environmental footprint, notably as part of its fleet renewal policy.”
“We are sensitive to the criticism that we are getting a free ride on the environment because frankly it is not true”, Ryanair chief executive Michael O’Leary told a press conference in Brussels, speaking as chairman of lobby group A4E (Airlines for Europe), which includes the continent’s largest airline groups, Lufthansa and British Airways owner IAG.
“We have a very good case to push back against these NGOs like the flight shame movement, because actually this is an industry that is performing remarkably well and meeting its obligations towards a greener, cleaner planet”, he said. The reference is to the Swedish-born anti-flying movement and its concept of “flight shame”, which has tarnished air-travel’s image in the eyes of the public.
A4E says that aviation has roughly halved its carbon footprint per flight over the past three decades and is spending billions of euros on more fuel-efficient aircrafts, while investing in less damaging aviation fuel technologies. O’Leary said his airline paid over 500 million euros of environmental taxes on a fuel bill of two billion euros last year, equivalent to around four euros per passenger.
“We are paying on behalf of our customers a penal level of aviation taxes and these taxes are continuing to rise”, he said.
The French government’s decision to levy this new tax “is all the more incomprehensible as this new air transport tax would reportedly finance competitive modes of transport – including road transportation and not the energy transition in the air transport sector”, Air France said.
In response, Borne said, “there will be no disadvantage for French airline companies”, adding, “the chosen arrangements aim not to penalise them.”
The Effect of Air Travel
There is no one source of pollution, but travel does account for a chunk. According to the European Commission, transportation emissions account for almost a quarter of all greenhouse gas emitted in Europe. Aviation accounts for just 12 percent of transportation-related emissions in Europe, and about 2.5 percent of global emissions today, but that number is expected to rise as more people take to the skies.
Part of the reason is tourism: carbon emissions from tourism are more than four times higher than previously estimated – higher even than emissions derived from international trade. According to the World Wildlife Fund, “If the entire aviation sector were a country, it would be one of the top 10 carbon-polluting nations on the planet.”
That means that if no action is taken, CO2 emissions from aviation will grow by up to 300 percent by 2050 – with devastating effects. Airplanes, specifically, emit not just carbon dioxide, but hydrocarbons, carbon monoxide, water vapour, nitrogen oxides, sulphur oxides, lead, and black carbon, all of which interacts with the Earth’s atmosphere.
And decarbonising the air is no easy task. The industry’s use of fossil fuels – and corresponding emissions – increased in 2018, and there’s been little progress on the creation of more efficient low-carbon technology or fuels. Airlines are looking to experiment with carbon-neutral biofuels, but prices remains a hurdle. New wing designs and the use of electric motors for on-the-ground taxiing would also reduce the amount of fuel used.
Dutch flag carrier KLM has launched a Fly Responsibility campaign to encourage both passengers and airlines to consider the environmental impact of their actions, including urging passengers to take alternative, more environmentally friendly options, such as rail or motor coach for short-haul travel.
However, critics have said all airlines need to consider industry solutions instead of asking people to fly less often. Justin Francis, founder of Responsible Travel, has called carbon-offsetting a “a dangerous distraction” from reducing emissions. Some American airlines, like JetBlue and Delta, offer passengers ways to purchase carbon offsets – ways to pay for planting trees, building windfarms, or other decarbonisation efforts – to mitigate both the carbon emissions for one’s flight, and the sense of guilt for boarding the plane.
“Voluntary initiatives by customers are not enough; the cost of flying must increase (…) Responsible Travel advocates a Green Flying Duty, with the proceeds ringfenced for research and development into decarbonised aviation”, said Francis. “Carbon offsets are no substitute for carbon reduction. At the same time as telling customers to think about flying less, KLM will be telling its investors about its future growth.”
