French proposal for higher eco taxes on flying and Greenpeace legal threat over KLM bailout angers industry
Mon 21 Sept 2020 – Proposals put forward by the French citizens climate assembly for higher passenger taxes and other measures to reduce aviation emissions have been heavily criticised by industry body IATA, which said such a move would lead to heavy losses in jobs and GDP. The eco-taxes suggested could range from €30 ($35) for an economy class flight of less than 2,000km up to €400 ($470) for a longer flight in business class. According to the French civil aviation authority (DGAC), annual tax revenue from air passengers could rise nearly ten-fold to reach over €4 billion euros in a business-as-usual scenario if implemented in 2021. The UK’s citizens climate assembly has recommended that frequent fliers and those who fly further should pay more. Meanwhile, Greenpeace Netherlands has filed a lawsuit to force the Dutch government to discontinue its bailout of KLM on the grounds that the climate conditions attached to the agreement do not go far enough.
The Citizens’ Convention for the Climate (CCC) has adopted 149 proposals to reduce France’s greenhouse gas emissions, eight of which affect air transport. They have been put before a consultation meeting organised by the Ministry of Ecological Transition to bring together CCC participants, industry, trade unions, civil servants and NGOs. A bill on the measures decided is due to be presented by the end of the month.
Measures include the phasing out of domestic flights where an alternative train journey of less than four hours is available, an end to the construction of new airports and the extension of existing airports, promotion of the idea of a European ‘eco contribution’, a higher fuel tax on recreational aviation, support for aviation sector R&D and biofuels, and a guarantee that emissions that cannot be eliminated are fully offset by funding carbon sinks. The most controversial proposal is a heavy increase in eco taxes on passengers.
“If these proposals are implemented, it will be the death of several airlines and airports in France, which are already suffering the most violent shock in their history,” said Thomas June, President of the Union of French Airports. “We will see massive closures of air links, with serious consequences for tourism and the economy.”
The DGAC estimates the additional taxes would result in a loss of traffic between 14% and 19% and 120,000 to 150,000 jobs. The outcome for the environment, it says, would be a saving of 3.5 million tonnes of CO2 out of a national total of 441 million tonnes, based on 2019 figures, a reduction of 0.79%, although it points out the gain would be offset by travellers using airports outside France.
“This proposal cannot be taken seriously. It will all but eliminate the 160,000 jobs that the government is trying to create with the €100 billion in its economic re-launch plan,” said Alexandre de Juniac, IATA’s Director General and former CEO of Air France-KLM in a statement. “In this time of crisis we need coherent policies that will save jobs, not policies that will destroy them.
“Aviation is a leader in decarbonising – the first to deliver against global sectoral emissions commitments despite being heavily carbon dependent. If the CCC is really serious about decarbonising aviation, it should provide the sector with support to achieve its green roadmap.”
IATA also warned a unilateral approach to reducing aviation’s emissions could compromise global action.
“If France imposes this debilitating unilateral national tax it could jeopardise CORSIA, an international scheme that will mitigate a billion tonnes of carbon emissions,” said de Juniac. “A net environmental impact of the CCC proposal will be horrendous if doing so gives large emitters or developing nations an excuse not to support CORSIA.”
Greenpeace Netherlands wants the Dutch government to implement an annual reducing cap on emissions for KLM as part of the airline’s Covid-19 bailout package and has given the government until October 1 to respond.
“Though this bailout is supposed to ensure job security, that is exactly what our government does not achieve. Even though KLM is propped up for now, the major polluter is not made future-proof and thousands of jobs are lost. And that is not only bad news for the climate, the environment and public health, but also for KLM’s employees who will not have job security in the long run,” said Dewi Zloch, the environmental group’s climate and energy expert.
“More sustainable aviation will not be accomplished with the slow measures that are currently in place. Electric planes or planes that fly with sustainably sourced fuel, for example, will not be available in time. So the number of flights needs to reduce substantially, starting with revoking short-distance flights under 1,000 kilometres. It is unnecessary to fly multiple planes between Amsterdam and Brussels or Paris every day.”
Ben Smith, CEO of Air France-KLM group said the French CCC proposal did not support emissions reductions and was instead counter-productive as it deprived his airline of finances that would otherwise be invested in environmental projects.
“We are very much against it,” he told a webinar last week organised by trade body Airlines for Europe. “Equally distortive is Greenpeace’s demand to cap CO2 emissions with a linear reduction. This would put the airline sector in the Netherlands on a totally unequal footing compared to their competitors, with serious consequences for jobs and connectivity. It is not very helpful if we want to get through this crisis.”
A Reuters report suggests the CCC’s tax proposals may be put on hold, with French finance minister Bruno Le Maire saying it would be “completely grotesque” to hit the aviation sector with new taxes at this time. The report says the environment minister has yet to decide whether to support the measures and suggests even if the taxes were put before the French parliament, they would likely be defeated.
Members of the UK’s first Climate Assembly, formed by six Parliamentary cross-party select committees to consider policies to set the country on the path towards the national net zero by 2050 target, identified 14 areas relating to air travel they would like government and Parliament to look at. Most wanted a solution to aviation emissions that allowed people to continue to fly but rejected a future in which passenger numbers grew by the forecasted 65% between 2018 and 2015, believing the growth should be limited to 25-50%, depending on how quickly technology progresses.
A large proportion (80%) ‘strongly agreed’ or ‘agreed’ that taxes should increase as people fly more often and as they fly further, and the scrapping of incentives that encouraged people to fly more was also favoured. Significant support was also found for investment by airlines in greenhouse gas removals as a way of reaching net zero, and the need for investment in new aviation technologies such as electric aircraft and synthetic fuels.