France plans ‘eco-tax’ for air fares
France is set to introduce an “eco-tax” for all flights from French airports, the government has said.
The tax is expected to raise about €180m ($202m; £162m) from 2020, said Transport Minister Elisabeth Borne.
The amount of the tax will depend on the type of ticket being bought.
Economy class tickets on flights within France or the EU will have a tax of €1.50 imposed. Business class tickets for flights out of the EU will have the highest tariff of up to €18.
“We have decided to put in place an eco-tax on all flights from France,” Ms Borne said during a news conference on Tuesday.
The tax will only apply to outgoing flights and not to those flying into the country.
Ms Borne said the money raised by the tax will be invested in in less-polluting transport, such as rail.
Pollution set to grow
The French government has tried to tighten environmental regulation, but last year abandoned its plans for fuel tax rises after the widespread protests from the “yellow vests” (“gilets jaunes”).
The airline industry is also introducing its own initiatives to try and reduce pollution.
The Carbon Offsetting and Reduction Scheme for International Aviation requires airlines to monitor and report their emissions from this year.
The full scheme will start in 2021.
The European Union says that without any action, CO2 emissions from aviation are set to grow by up to 300% by 2050.
France to impose green tax on plane tickets
EURACTIV.com with AFP
10 Jul 2019
France announced Tuesday (9 July) it would impose new taxes on plane tickets of up to €18 per flight, joining other EU states seeking to limit the environmental impact of air travel.
The government said that the funds from tickets for flights originating in France would be used to create less-polluting transport options as concerns grow about carbon emissions from planes.
The move, which will take effect from 2020, will see a tax of €1.5 ($1.7) imposed on economy-class tickets on internal flights and those within Europe, Transport Minister Elisabeth Borne said.
It will rise to €9 for within the European Union in business class, €3 outside the EU in economy class and a maximum €18 for flights outside the European Union in business class, she added.
The new measure is expected to bring in some €180 million a year which will be invested in greener transport infrastructure, notably rail, she said.
“France is committed to the taxation of air transport but there is an urgency here,” she said.
It will only be applied on outgoing flights and not those flying into the country, Borne added.
Flights to the French Mediterranean island of Corsica and also the French overseas departments – which are hugely dependent on air links for their existence – will be exempt, she said.
Next Commission urged to launch ‘aviation package’
The next European Commission should make curbing aviation emissions a priority in its work programme for the next five years, according to lawmakers at a special summit on Thursday (20 June) dedicated to taxing flights.
Shares in Air France fell sharply, down almost 4% to trade at €8.54. Its German competitor Lufthansa also traded lower with its shares falling €2.50 to €14.8. Air France slammed the measure, which it said would “strongly penalise its competitiveness” at a time when it needed to invest, notably in renewing its fleet, to reduce its carbon footprint.
A similar tax was introduced in Sweden in April 2018, which imposed an added charge of up to 40 euros on every ticket in a bid to lessen the impact of air travel on the climate.
Sweden has seen the development of a movement called “flight shaming” (flygskam) spearheaded by 16-year-old schoolgirl Greta Thunberg who has become a symbol of the fight against climate change.
The industry has been under fire over its carbon emissions, which at 285 grams of CO2 emitted per kilometre travelled by a passenger far exceed all other modes of transport.
Road transportation follows at 158 and rail travel is at 14, according to European Environment Agency figures.
“The sector is under considerable pressure,” Alexandre de Juniac, the chief executive of the International Air Transport Association (IATA), admitted at a meeting of the industry body in June.
Netherlands ready to start taxing air travel
The Dutch government will introduce a €7 levy per air passenger in 2021 if the EU does not manage to set up a pan-European tax, as momentum builds behind calls to crack down on aviation’s environmental impact.
‘Won’t deter from flying’
So-called ecotaxes have met with heavy criticism from the IATA.
It argues that the effectiveness of such taxes is “doubtful” and said “no government that introduced a ticket tax has been able to demonstrate that such tax reduced CO2 emissions.”
The industry is already subject to the EU carbon emissions trading system and, from 2020, to a new global mechanism called the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
Andrew Murphy, aviation expert with the NGO Transport & Environment (T&E) in Brussels which presses for cleaner transport, said that the tax was far from unique in Europe with similar measures in Britain, Germany, Norway, Italy, as well as Sweden.
“I don’t think that because there is a €18 tax it will deter anyone from flying,” he told AFP. “It will have some minor impact on demand.”
French President Emmanuel Macron is seeking to cast himself a champion of the fight against climate change and ensuring that the 2015 Paris accord on fighting global warming is respected.
He went into this month’s G20 summit in Japan declaring that climate change was a “red line” and emerged with a statement from 19 of its members endorsing the Paris agreement – but without the United States after President Donald Trump pulled out of the agreement in 2017.
Macron is aware he needs to tread carefully on climate issues after rising fuel taxes – which aimed to help France meet its Paris climate accord goals – helped spark the yellow vest street protests against his government last year.
Dutch Sec of State for Finance says an EU airline tax needed to limit low-cost flights
The Dutch Secretary of State for Finance, Menno Snel, has said the EU needs an airline tax to disincentivise consumers from using low-budget airlines for frequent travel. Mr Snel is to make his pitch for an EU-wide tax at a meeting of European finance ministers, as a way to curb aviation CO2 emissions. He said: “We need to come up with some ideas. It’s not sustainable that we fly for a weekend with some friends all around Europe, when we could do it with the train.” Using the example of a €19 return ticket from Amsterdam to Berlin, he said: “[People] understand it’s not a fair price right now.” Mr Snel said the tax could complement emissions reduction programs like the EU’s Emissions Trading System (ETS) and the UN’s CORSIA. He said just having a carbon price does not mean there cannot ALSO be taxes on flights. Aviation is an under-taxed sector, paying no fuel duty and no VAT. He understands that CORSIA itself is not sufficient to even dent aviation carbon emissions, and more taxes on flights are needed – on a global scale. Mr Snell will suggest an EU-wide minimum ticket tax, above which individual countries could charge more. EU tax initiatives require unanimity to be adopted.
German air passenger tax (now €7 – 40) under threat as negotiations continue to form new German government
Negotiators for a new grand coalition between Chancellor Angela Merkel’s conservatives and Social Democrats may drop a proposal to progressively abolish Germany’s air transport tax (the Luftverkehrssteuer.) The tax is levied on air ticket prices and costs between €7 and 40 euros depending on the distance flown, and generates about €1 billion per year. The airlines, of course, want the tax abolished, and claim it harms “competitiveness.” Aviation in Germany already pays no VAT (except on domestic flights) and no fuel duty. The CDU (Merkel) and SPD negotiating teams were discussing abolishing the ticket tax, but so far the tax seems to have survived the talks. It would be crazy to allow aviation to pay even tax than it does now, bearing in mind its massive CO2 emissions. Aviation is on its way to eating up all of what remains of our chances to limit global warming to below 2°C as agreed in Paris. Aviation emissions are growing fast (up 8% in the EU in 2016), billions of people are waiting to catch their first flight (just 3% of India’s population have ever boarded a plane). Efficiency improvements in the sector are slow and shrinking. What’s more, by ignoring non-CO2 effects we’re underestimating aviation’s contribution to global warming by a factor of at least two.
Swedish government commission proposes climate tax (about £6.50 – £29) on air fares
A commission appointed by the Swedish has recommended that airlines operating in Sweden should pay a tax of between 80 and 430 Swedish crowns ($9-47 or £6.80 to £29) per passenger per flight to compensate for carbon emissions. One the levy is instituted, the cost of a domestic flight would rise by 80 crowns and an international flight by 280 to 430 crowns (£24 – 29), depending on the distance of the flight. Currently in Sweden airlines pay VAT of 6% on domestic flights while international flights are exempt from VAT. Predictably, the centre-left government’s plans for an airline tax have been criticised by opposition parties who say it would do little to reduce CO2 and would harm the airline industry, by very slightly reducing demand. The government is expected to incorporate a form of the proposal, possibly amended, within their next autumn budget in October 2017. The Swedish commission proposed that the tax come into force on January 1, 2018 and it would be expected to raise around 1.75 billion Swedish crowns (about £150 million) per year. Many other countries have charges for flights, at different levels, and for different reasons. These include Australia, Norway, Germany, Austria, France, Spain, Doha, Abu Dhabi, Sharjah and Hong Kong. Details on this link.
Irish Republic to scrap air travel tax – which was only €3 (had been €2 and €10 till 2010)
The Irish government has announced that it will be scrapping its tax on air travel. At present there is a tax of just €3 per flight, and this will end in April 2014. This has led to concerns about the potential impact on Northern Ireland’s airports, where there is still Air Passenger duty of £13 per passenger (€26 per return flight) for short haul flights (not for long haul flights). Ryanair has immediately said it will increase its traffic at Irish airports by one million passengers a year – which is rather surprising, if the difference in tax from what it is now is just €3. It is not thought likely that many people will travel from Northern Ireland to Dublin to save €20 – the trip there and back might cost more. George Best Belfast City Airport said the move was “very unlikely to cause a stampede to Dublin for cheap flights”. Stormont Finance Minister, Simon Hamilton, said the move by the Republic was “not really a surprise” and that it would be prohibitively expensive for Northern Ireland to match the cut. “The cost to the NI block grant and other public services would be significant – between £60 – £90 million a year,” he said.