Governments should be encouraging new technologies and sustainable aviation fuels to reduce aviation carbon emissions, rather than impose ineffective ‘environmental’ taxes.

The call came from Iata research as European governments consider a Dutch proposal for an EU-wide tax on air tickets.

The most preferred actions for governments to prioritise for managing aviation’s climate change impacts are to:

• Back the development of sustainable aviation fuels (64%)
• Support research and development of new technology and better operations (62%)

Environmental taxes were one of the least popular options, with just 22% support, according to the aviation trade body’s study.

And consumers have little faith in government’s spending environmental taxes on environmental action.

When asked “do you trust governments to spend money from environment taxes specifically on environmental protection programmes?” the survey results were uniformly sceptical across several key EU markets – with 66% in the UK saying they did not trust law makers on the issue.

Iata pointed out that commercial aviation is responsible for around 2% of annual global carbon emissions.

The industry has a target to cap CO2 through carbon-neutral growth from 2020, and to cut emissions in half by 2050, compared to a 2005 benchmark.

Achievement of this target ensures aviation’s compatibility with the goals of the Paris climate agreement, to limit global warming to between 1.5-2 degrees.

Iata director general and CEO Alexandre de Juniac said: “The research shows that the public’s feelings are very clear. People want to travel. They value the freedom to fly. And they want to see the industry and governments taking action on emissions.

“Making it more expensive for people to fly is not the answer. Rather, action to encourage new technology and sustainable fuels is the solution.

“Airlines are taking bold steps to cut emissions. Sensible governments should take practical measures to help, not hinder investment through weakening the industry and trying to make flying a preserve of the rich.”

He added: “Aviation takes the climate change challenge very seriously. For more than a decade we have set and exceeded tough targets for carbon emissions, and we plan to achieve much more.

“Public opinion has a clear message to governments: work with aviation to encourage investment in clean fuels, and new hybrid and electric technology. This will help airlines cut emissions in half by 2050.

“From next year we will cap emissions in a global offsetting scheme that will generate $40 billion of climate financing.

“And airlines have bought up all the sustainable aviation fuel that is available. Governments should listen to their citizens. The way forward for aviation and the environment is sustainable aviation fuels. Promoting their commercialisation will do more than any tax.”

But NGOs Transport & Environment (T&E) and Natuur & Milieu argue that discussing ways to tax aviation and address its climate impact is a long overdue and welcome development.

They are calling for eurozone governments to not get “bogged down” in seeking unanimity for a EU tax but instead work bilaterally to tax airlines.

Taxing aviation kerosene sold in Europe would cut aviation emissions by 11% and have no net impact on jobs or the economy as a whole while raising almost €27 billion in revenues every year, a recent European Commission study showed.

Currently only six EU countries have airline ticket taxes but unlike road transport, airlines have never paid a single cent of excise duty on the fuel they take on at EU airports, the NGOs claim.

Expanding air taxes would make up for revenues lost due to the VAT exemption enjoyed by airlines.

Bill Hemmings, aviation director at Transport & Environment, said: “No new laws are needed to tax aviation fuel in Europe. What has lacked so far is governments’ willingness to abolish fossil fuel subsidies for Europe’s fastest growing polluter. Now is their chance to respond to the current clamour for action at the ballot boxes and in our streets.”

Marjolein Demmers, director at Natuur & Milieu, added: “The current proposal of the Dutch government to implement a €7 ticket tax is a start, but needs to be raised and complemented with a kerosene tax.”

Meanwhile, Iata said that global airline share prices fell sharply in May.

This indicated that forward-looking equity investors expect tougher financial conditions ahead.

“The performance of airline index has been diverging from global equity markets since the beginning of this year due to the concerns regarding airline profitability stemming from rising risks such as Brexit and US-China trade war,” the organisation said.

MoreAirlines slam EU air tax findings

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