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European Aviation Industry Faces Further Scrutiny and Costs Over Emissions
The discussion on the aviation industry’s impact on climate change continued in Europe this month with the conclusion on Sunday of a two-week United Nations climate conference (COP 25) in Madrid and the European Commission (EC) releasing a “European Green Deal” last week. Airline executives were watching both events closely as the industry seeks to finalise rules on which programs would be a focus for the International Civil Aviation Organization’s (ICAO) Carbon Offsetting Reduction Scheme for International Aviation (CORSIA).
CORSIA aims to cap carbon emissions for international flights from 2021, potentially affecting flights operated by airlines of every country that is a member of the United Nations, of which the ICAO is an agency. For the European aviation industry, the European Green Deal outlined potential measures that may be implemented to meet the commission’s plan to reach zero net emissions by 2050.
The conference in Madrid failed to reach an agreement between the negotiators of the 197 parties in attendance on the management of international carbon markets, impacting the regulations which ICAO may seek to adopt for CORSIA as debate had been ongoing on how best countries should record carbon-offsetting. There was continued conjecture on the effectiveness of the Clean Development Mechanism (CDM) decided in Kyoto in 1997 and superseded measures in the Paris Agreement at COP 21 in 2015.
The Environmental Defense Fund, a non-profit advocacy group, stated: “with the COP having failed to allow CDM credits to be used, ICAO should follow suit – and ensure that the pre-2020 CDM surplus does not crowd out the potential for new and additional emission reductions under CORSIA.”
The newly-elected EC President Ursula von der Leyen highlighted the dilemma regulators face when implementing necessary climate change action by saying that “the European Green Deal is on the one hand about cutting emissions, but on the other hand it is about creating jobs and boosting innovation.”
One of the approaches the EC is considering to reduce emissions is an EU-wide jet fuel tax which could gather 13 billion euros ($14.5 billion) a year but may result in a drop in passenger demand potentially resulting in the loss of 30,000 full-time roles in the aviation industry. By EU estimates, aviation within the member states is responsible for 3 percent of greenhouse gas emissions while those gases emitted by cars are 12 percent.
Unsurprisingly, opposition to the jet fuel tax by European airlines has been swift with carriers citing unfair international competition and a reduction in the investment of alternative biofuels. The Wall Street Journal reported Lufthansa envisaging that “the tax could force airlines to refuel abroad and even result in relocation to non-European hubs.”
Low-cost carriers may be particularly hard hit by increased tax costs airlines will need to pass onto passengers with Ryanair stating that it “will be very damaging for certain economies in the periphery of Europe.” Fares are expected to rise across the continent should the tax be levied.
International Air Transport Association Director-General and Chief Executive Officer Alexandre de Juniac has been a vocal opponent of increased taxes on the industry.
“Taxation aimed at stopping people from exercising their freedom to fly will make travel more expensive but do very little to reduce emissions,” he said. “It is a politician’s feel-good solution, without taking responsibility for the negative impact it has on the economy or the mobility restrictions it imposes on people with lower incomes.”
Airline concerns may fall on deaf ears however as Karima Delli, chair of the European Parliament transport committee, is quoted in the WSJ as saying “all people can talk about is the danger with the jobs, my target is CO2 emissions.”
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