As climate concerns gain momentum in Europe, airlines are being challenged with new environmental taxes which airlines claim miss the mark on making aviation more sustainable. Airlines for Europe (A4E), an association of European airlines based in Brussels counting members among Europe’s largest carriers, issued a statement yesterday warning that these taxes are ineffective and suggesting a more direct path to aviation sustainability.
According to A4E, Europe’s biggest airlines will pay more than €5 billion ($5.6 billion) in national environmental taxes and other payments this year. This includes around €590 million ($665 million) in expected payments to the EU’s Emissions Trading System (ETS). Airlines have participated in ETS since 2013. EU prices per ton of CO2 have risen by 500% in that time from €5 to €25. Aviation is currently the only transport sector that participates in the EU ETS scheme.
A4E also pointed to airlines’ direct investment in technology that will lessen the industry’s impact on the environment, valued at more than €169 billion ($190.45 billion) though 2030. This figure includes adding 800 fuel-efficient aircraft to the fleet and over €1 billion ($1.13 billion) dedicated to research partnerships that will expedite the production of sustainable aviation fuels in Europe.
Europe’s airlines are also active participants in the UN’s global aviation carbon emissions reduction scheme, CORSIA, which has set a goal of carbon-neutral growth by early 2020. CORSIA is expected to mitigate 2.5 billion tons of CO2 between 2021 and 2035, through carbon offsets and other environmental projects.
In the A4E statement, Michael O’Leary, Chairman of A4E and Ryanair CEO described the debate around airline environmental impact in Europe as “badly misinformed.”
“Globally, European airlines are the only airlines paying environmental taxes,” he added. “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 Ireland, Spain, Portugal and the Baltic States, for example.”
As part of its environmental commitment, Ryanair has begun publishing statistics on its CO2 impact and taxes paid. In June, the airline reported total CO2 emissions of 1,167 kilotons equal to CO2 emissions of 66 grams per passenger kilometer. Ryanair expects to pay €630 million ($710 million) in environmental taxes in 2019 (FY20); that is €4.12 per passenger equal to 11% of Ryanair’s average ticket price.
Better airspace management needed
Thomas Reynaert, Managing Director, A4E pointed to other opportunities to reduce the environmental impact of aviation in Europe, which have yet to be acted on despite being on the transport agenda for years.
“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,” Reynaert said. “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.”
The International Air Transport Association (IATA) has made similar claims, pointing out that the greatest opportunity to cut emissions would be from implementing the Single European Sky initiative for airspace management. At its 2019 Annual General Meeting, IATA said that implementation of Single European Sky (SES) could help cut 18 million tonnes of CO2 annually in Europe.
SES would have the added benefit of resolving seasonal disruptions in Europe as airspace closes during ATC strikes in certain countries. According to A4E, ATC capacity and staff shortages caused more than 70% of all en-route flight delays between January and June 2019, impacting around 25 million passengers on A4E member airlines.
As airlines plan routes to avoid known ATC bottlenecks in Germany and in France, flights get longer and burn more fuel, resulting in higher CO2 emissions. A report published this year by the European Union Aviation Safety Agency, the European Environment Agency and EUROCONTROL highlights the link between airspace inefficiencies and airline CO2 emissions.
“When comparing the gate-to-gate actual trajectories of all European flights in 2017 against their unimpeded trajectories12, there is an additional 5.8% gate-to-gate CO2 emissions at European level,” the report’s authors state. In terms of flight deviations, the authors found, “The total additional distance flown in 2017 within the SES area was 222.8 million kilometres, which resulted in approximately 3 million tonnes of additional CO2 emissions.”
Airlines have a built-in incentive to reduce their fuel consumption and, by extension, their CO2 footprint: profits. As the report’s authors state: “Aviation fuel typically comprises 25% or more of airline costs and accounts for over 97% of airline CO2 emissions, so focusing on fuel efficiency makes both commercial and environmental sense.”
While environmental taxes may help raise funds for individual governments, a recent report by CE Delft in the Netherlands found that they have “only a modest impact on CO2 and particulate emissions and noise.”
There is also little evidence that these taxes will affect air travel demand. IATA projects will grow at a CAGR of 2.0% in Europe, with 611 million new passengers by 2037, bringing the total market to 1.9 billion passengers.