A Portuguese regional airport that was expanded with large amounts of EU funding has announced plans to turn itself into an aircraft parking facility because demand for the airport has fallen badly short of predictions. The case highlights T&E’s call for greater scrutiny of public money being used to prop up carbon-intensive, underutilised infrastructure with questionable social and economic benefits.
EU approval of Ireland’s €42.5 million in state aid to small regional airports has been criticised for allowing public money to prop up underutilised infrastructure with questionable social and economic benefits. Four airports will receive the grants over the next four years – while the Irish government faces calls to address ‘chronic’ underinvestment in low-carbon public transport.
Further decarbonisation of transport through a shift to alternative fuels and electro-mobility forms a major part of the European Commission’s strategy for an ‘energy union’, unveiled last week. With transport being responsible for more than 30% of EU energy consumption and a quarter of emissions, the Commission said legislation on ‘decarbonising the transport sector, including an action plan on alternative fuels’ would be put forward in 2017.
Last week saw Europe extend its dirtiest subsidy, the one that makes ultra-cheap air tickets possible, by at least another decade. That’s the simplest way to sum up new rules for state aid to regional airports and airlines. The text itself is, as usual, almost impossible to read for lay people, so in this piece I will try to paint the rules and their consequences as simply as possible.
State subsidies for regional airports and airlines serving them – mainly the low-cost airlines – will be allowed to continue for at least another 10 years, according to the Commission’s finalised guidelines on state aid for airports. The revised guidelines, which cannot now be challenged by MEPs, are ostensibly aimed at streamlining and tightening state aid for airports.
The Commission has published proposals aimed at reducing the amount of taxpayers’ money that goes to airports and airlines. However, the fine print of what is initially a consultation means small airports will continue to receive massive subsidies that often make their way to low-fares airlines, even when such subsidies distort competition between airlines. The consultation is important, because when it is complete the Commission can implement its preferred solution without consulting MEPs.
The NGO network CEE Bankwatch says the European Bank for Reconstruction and Development urgently needs to reduce its carbon-heavy investments in new motorways and air travel, and instead promote transport that assists the transition to a low-carbon economy. Its comments come in a consultation by the Bank on how it decides its transport lending in central and eastern Europe. Bankwatch also says the Bank’s ‘private sector at just about all costs’ approach is leading to bad lending decisions, and it should ensure that railway restructuring does not become a misleading term that takes trade off the rails because of higher costs.