The Strategist

Le Monde: Flights over Europe can become more expensive

05/13/2019 - 12:47

Le Monde newspaper got access to a study on the feasibility of a tax on aviation fuel, ordered by the European Commission in the middle of 2017. The report states that EU authorities can, without serious consequences for the industry, impose a fuel tax on airlines at the rate of € 0.33 per liter. Authors of the report promise that this innovation will have three consequences: the tickets will become more expensive, there will be less flights, and the sky over Europe will be cleaner.

The French newspaper Le Monde reported on Monday that the European Commission's Central Transport Authority ordered a study on possible implications of imposing a jet fuel tax on both the environment and the air transportation market in April 2017. As a result, in May 2018, the European Commission had a report at its disposal that would be a weighty argument in favor of the new tax.

For several years, the EU authorities have been trying to reduce greenhouse gas emissions from aircraft. Back in 2012, a law was passed on the European Greenhouse Gas Emissions Trading System (EU ETS), according to which all airlines operating flights through EU countries are required to receive emission allowances of 85% of the emission standards of the base 2010 for free, and pay for the rest 15 %. Then this measure caused a wave of indignation among both carriers and non-EU countries. As a result, the law was acting for less than a year and was stopped in November 2012.

Five years later, the European Commission returned to this issue, but now the environmental problem can be solved not directly - through emission quotas, but indirectly - through a fuel tax.
The report’s authors argue that the European authorities should impose a tax of € 0.33 per liter of aviation fuel used. This will allow, according to estimates, to reduce the harmful emissions of aircraft into the atmosphere by 10%.

The mechanism of the new tax is simple: the airlines will inevitably shift additional expenses for passengers, and a rise in price of tickets will inevitably result in a drop in demand for air travel. At the same time, as noted in the report, carriers will not need to cut jobs.

In general, air transport is responsible for only 3% of total CO2 emissions in Europe. But planes themselves, according to the Agency for Environmental Protection and Energy Efficiency, produce twice as much carbon dioxide as cars, and 40 times more trains. In addition, according to forecasts, the volume of passenger air traffic in the world should double by 2037 - from 4.1 billion recorded in 2017 to 8.2 billion people.

Now the European Commission will have arguments for possible introduction of the tax for airlines. In addition, the Netherlands and Belgium have already expressed support for such a move by the European authorities. And in Sweden, from April 1 last year, the climate fee for air tickets was introduced, which varies from € 6 to € 39. Note that the demand for air travel in the country has really fallen - over the year by 4%.