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European airlines will pay over €5 billion in environmental taxes and ETS contributions in 2019

European airlines will pay over €5 billion in environmental taxes and ETS contributions in 2019.

Missed opportunity to dedicate these funds to help industry decarbonise.

  • Aviation is determined to play its role in reducing carbon emissions.
  • 2019 estimated payments under EU Emissions Trading System (ETS) €590 million (+59% vs 2018)
  • Total ETS payments (2013-2018) over €1.3 billion.
  • A4E airlines proactively investing €169 billion in environmentally-friendly technologies until 2030, including 800 new aircraft and more rapid production of sustainable aviation fuels.
  • N. global carbon off-setting and reduction scheme for aviation (CORSIA) will result in the mitigation of around 2.5 billion tons of CO2 between 2021 and 2035.

Europe’s biggest airlines will pay more than €5 billion in national environmental taxes and other payments this year – funds which could have otherwise been dedicated to support the industry’s decarbonisation efforts. This includes around €590 million in expected payments to the EU’s ETS, (+59% vs 2018) which airlines have been a part of since 2013. Aviation is currently the only transport sector which participates in the ETS.

A4E airlines remain focused on positive solutions with a high potential to lower emissions levels, investing more than €169 billion in environmentally-friendly technologies until 2030. This includes the purchase of around 800 fuel-efficient aircraft, which have already reduced emissions by 24% between 2005 and 2017[1], and over €1 billion in the set up of innovative partnerships designed to fast-track the production of sustainable aviation fuels in Europe.

In addition, from 2020 onwards, the UN’s global aviation carbon emissions reduction  scheme, CORSIA, will enable airlines to deliver on the industry’s goal of carbon-neutral growth by early 2020. As of July 2019, 80 states representing 77% of international aviation activity have voluntarily signed up to CORSIA – and more than half of these states are European. CORSIA will result in the mitigation of around 2.5 billion tons of CO2 between 2021 and 2035, with airlines paying to offset their emissions by investing in climate-friendly projects.

“The claim that airlines are not paying environmental taxes is completely false”, said Michael O’Leary, Chairman of A4E and Ryanair CEO. “This environmental debate has been badly misinformed. Globally, European airlines are the only airlines paying environmental taxes, forecast at over €5 billion in 2019, including €590 million in ETS, up from €370 million in 2018, a 59% increase. More aviation taxes are a knee-jerk reaction that will undermine European competitiveness and particularly hurt the integration and free movement of EU citizens, especially for peripheral and island Member States such as Ireland, Spain, Portugal and the Baltic States, for example”.

“The fact is, EU policy-makers have missed an opportunity to reduce aviation emissions by failing to reform the European sky or by making sustainable fuels sufficiently available for aviation. Rather than introducing new taxes — which do nothing to make flying more sustainable  — EU governments should recognise and support airlines’ sustainability initiatives with better research and development opportunities”, said Thomas Reynaert, Managing Director, A4E.

Until then, European airlines will continue to invest independently in a variety of initiatives to reduce their environmental footprint:

  • In 2019, airBaltic fully implemented its E-GEN project, which has enabled over 500 high precision approaches across Europe on its Bombardier Q400 NextGen fleet, significantly improving fuel efficiency levels and reducing CO2 emissions.
  • KLM Royal Dutch Airlines has committed itself to the development and purchase of 75,000 tonnes of sustainable aviation fuel per year for the next 10 years, starting in 2022. It will reduce KLM’s CO2 emissions by 200,000 tonnes per year (the equivalent emissions of 1,000 KLM flights between Amsterdam and Rio de Janeiro).
  • British Airways is building a plant with renewable fuels company, Velocys, to convert organic household waste into renewable jet fuel to power its fleet. It will start operations in 2024.
  • Ryanair is purchasing 200 x B737 in next 5 years (value more than €20bn), reducing emissions by 16% per seat.
  • The Lufthansa Group has pledged to become 100% carbon-neutral for all ground operations in Germany, Austria, and Switzerland by 2030.
  • easyJet has a partnership with Wright Electric who are working to develop an electric aircraft with the intention that it will be viable for short-haul routes in Europe by 2030.
This press release was sourced from A4E on 10-Jul-2019.