Experts Urge Airlines To Take Lead on Environment Debate

 - July 18, 2019, 9:36 AM

Europe could see a proliferation of so-called environmental taxes if the aviation industry does not take the lead on the conversation over the response to climate change and pollution, warned global managing director of aviation at ICF Samuel Engel. Eco-taxes will not solve the emissions problem, he asserted, but they come in the context of a rising perception across Europe that air travel carries an ecological taboo, even as the industry sees it as a top priority for the industry. “The public conversation seems to be opening the door to this rare gift to a politician: a tax that people want to see,” said Engel.

He pointed to France’s decision earlier this month to introduce, from next year, an environmental levy—of between €1.5 to €18 per ticket—on departing flights. “It is fascinating that in the face of protests from the gilets jaunes (yellow vests), president Macron backed down on his plan to implement a tax on diesel fuel. The same government turned around and slammed a tax on aviation, and somehow this tax is socially acceptable,” Engel said. “It illustrates an interesting social phenomenon that has implications for the future of aviation and the environment.”

The industry has achieved a “phenomenal improvement” of its carbon output per passenger kilometer in the past 20 years, and highlighting that fact in full-page newspaper ads won’t suffice to take the lead on the environmental debate, he noted. “What the industry has to do is make a partnership with customers,” explained Engel. “It can’t be about industry versus government. It has to be industry reaching accord with customers and showing governments that this is the level of concern and participation that customers have in the solution.” Making customers personally responsible for their choices and carbon footprint will illuminate the difficulty of the solutions. “There is no silver bullet,” confirmed Engel. “Real reduction of emissions will come from a combination of many solutions and technologies.” Carbon offsets offer a palpable practical solution for the near-term, he said.

Airlines, globally, are offering voluntary offsets over years, though the interest appears negligible certainly in the U.S., where, according to Engel, many passengers seem more enthusiastic about papers straws and recycling soda cans. “It is a topic that seems much better attuned to protests and Facebook than individual behavior,” he said.

“We all offer voluntary offset opportunities for our customers online and the uptake is not going up,” added Brussels Airlines CEO Christina Foester. “I find that what people say and what people do is not always the same.” Foester, jointly with Ryanair chief executive Michael O’Leary, International Airlines Group CEO Willie Walsh and Brussels-based trade association Airlines for Europe (A4E), called for a rebalancing of the environmental debate in Europe and a focus on solutions with a high potential to decarbonize the industry, rather than imposing new taxes. “We do not really see the relationship right now between levying eco-taxes and making flying more sustainable,” she told a press conference in Brussels last week. “If such taxes are imposed, which we are not in favor of, we would like to see the revenues used to fund initiatives that reduce emissions.”  

According to research by A4E, its members—which include all of Europe’s largest airlines—will pay more than €5 billion in “environmental taxes and other payments” this year, either at the EU or national level. That includes around €590 million in expected payments to the bloc’s emission trading scheme  (ETS), representing an increase of 59 percent over ETS payments in 2018. Aviation has participated in the EU ETS since 2013 and remains the only transport sector to do so, the body remarked.

The €5 billion figure, A4E hopes, will debunk claims that airlines do not pay environmental taxes and get privileged treatment compared with other modes of transport. Much of the contemporary rhetoric by "green" NGOs and movements like the Swedish-born Flygskam (flying shame) that “aviation is getting a free ride on the environment is hugely biased and misinformed,” according to O’Leary, who serves as A4E chairman. Ryanair, he remarked, paid €544 million in environmental taxes and ETS charges on a fuel bill of €2 billion last year, which, he added, equates to a 25 percent tax its fuel. On a per passenger basis, the low-cost carrier paid around €4 in environmental charges and levies on an average fare of €39. “Who says we are not paying our fair share?” O’Leary asked.

O’Leary and Walsh—both are Irish—pushed back against the flying shame movement and highlighted that people living on islands and in countries at the periphery of Europe often had no real alternative to flying. “There should be no shame to admit there is no alternative to flying,” Walsh reckoned. “This is an industry that has a good story to tell. This is an industry that has hugely improved its environmental performance and we are not avoiding investing to further improve our environmental performance.”

According to A4E, its member airlines jointly have committed more than €169 billion in a variety of initiatives and technology to lessen their environmental footprint through 2030. The investment includes the purchase of 800 new fuel-efficient aircraft and over €1 billion in partnerships designed to fast-track the production of sustainable aviation fuels in Europe.