Aviation is responsible for 5% of global warming and its rapid growth puts it on track to consume a quarter of the world’s carbon budget by 2050. There is a way to avoid this outcome but we need to act fast, a green transport NGO has said. By driving out the use of fossil kerosene fuel through carbon pricing and requiring aircraft to switch to synthetic fuels, the climate impact of flying can be reduced dramatically, according to a new report by Transport & Environment (T&E).
The EU should fill its post-Brexit budget gap with new revenues from taxing transport, which is Europe’s biggest emitter of greenhouse gases, former Italian prime minister Enrico Letta, ex-WTO head Pascal Lamy, former finance minister of Germany Hans Eichel and 14 other economists have told EU leaders. In advocating a green tax shift, they called for a higher minimum tax on road diesel, VAT on airline tickets for the first time and taxing aviation kerosene which is currently exempt. Sustainable transport group Transport & Environment welcomed the letter, citing its own analysis that such a green tax shift would generate additional revenues of more than €50 billion a year which would allow for the income tax burden to be reduced.
One billion. That’s how much in euro that Germany’s tax on airline tickets generates every year. A billion is about a quarter of what trucks pay in Maut every year, or about 35 times less than the motor fuel tax.
MEPs voted today to limit the exemption from the EU ETS of flights to and from Europe until 2021, pending further information regarding the UN aviation body ICAO’s global offsetting measure known as ‘CORSIA’. Sustainable transport group Transport & Environment (T&E) welcomes this vote as essential to safeguarding European climate goals. MEPs also endorsed a number of reforms to aviation’s inclusion in Europe’s emissions trading scheme which will start to cut back on the sector’s special treatment on climate policy.
Flights to and from Europe have been automatically re-included in EU ETS since the start of 2017. In February the Commission proposed, in response to development at ICAO, to once more exempt these flights, this time indefinitely. The environment committee (ENVI) of the European Parliament adopted its report on this file in July, and the full Parliament will vote on it on September 13th.
T&E’s ETS calculator shows how getting the right balance on aviation’s inclusion in the EU emissions trading system (ETS) can help solve two problems at once: the sector’s major and growing climate impact, and Europe’s need to raise climate finance. Decision-makers should seize this opportunity offered by the ongoing reform of aviation provisions in the EU ETS.
Aviation is a substantial and growing driver of climate change, currently responsible for almost 5% of global warming. The objectives of the Paris Agreement cannot be achieved without action to rein in its emissions growth. This T&E briefing outlines how, at its triennial assembly, ICAO has an opportunity to adopt a global market-based measure which can be a starting point for greater global ambition. However, negotiations dominated by the need to protect industry and favour historic emitters is weakening the prospect of a credible deal.
Despite being in need of reform, the EU’s aviation ETS is functioning, is being complied with, and has the potential to deliver real emissions reductions, a new analysis shows. Its key design features – emissions allowances instead of offsets, being binding instead of voluntary, and full instead of partial coverage of emissions – are all superior to the draft global deal under negotiation at the UN’s aviation agency ICAO. Europe is under pressure to dismantle its regional measure even though discussions on a global measure at ICAO remain fractious.
Aviation is a major source of emissions, increasing 21% within Europe in the last three years, and is projected to continue to grow. If Europe is to meet its climate targets action is needed and fiscal policy has a key role to play. To date all aviation fuel used in Europe has been tax exempt despite such taxation being permitted on European domestic flights and intra-EU since 2003, the latter subject to bilateral agreements.
EU countries can end the decades-long exemption and tax kerosene on flights between them, according to legal experts. This could either be done at EU level through a series of bilateral agreements or by agreement between individual countries, the independent legal analysis for green NGO federation Transport & Environment (T&E) finds. The old argument that foreign carriers’ operating within the EU – de facto a small number of flights – can’t be taxed can be overcome by introducing a de minimis threshold below which fuel burn would not be taxed.