"No obstacles" to EU aviation pollution charge

Study says scope for EU taxes on aircraft fuel, emissions, without distorting market

Europe could introduce pollution charges on aviation without significantly impairing the EU aviation industry's global competitiveness, according to an independent report presented to the EU Presidency and the European Commission in Brussels today.

Pollution from global civil aviation is expected to triple from 1990 to 2015, the report says. Aeroplanes account for only 2-3% of current emissions of carbon dioxide or nitrogen oxides but this share is set to increase substantially.

Increasing fuel prices by US$0.20 (Ecu0.18) per litre of kerosene over the current price of US$0.16/litre could halve the expected growth in EU emissions by 2025, the report concludes.

With sponsorship from several EU governments and the European Commission, the study was commissioned by the European Federation for Transport and Environment (T&E), an NGO coalition, and carried out by the Centre for Environmental Technology and Energy Conservation at Delft University, the Netherlands.

It was commissioned against a background of several failed EU moves to reach agreement with other countries to end a current tax exemption for aircraft fuel under the international Chicago Convention. Last year, the Dutch government used its EU presidency to push the issue up the EU and international political agenda. Transport minister Annemarie Jorritsma said she thought a unilateral EU tax would be feasible (ENDS Daily 12 March 1997).

Last June, finance ministers asked the European Commission to study the feasibility of an aviation tax. But ENDS Daily has learned that the Commission has yet to start the study, despite initial pledges to complete it by the end of 1997. Results are now expected in the autumn.

According to T&E, the study "demonstrates that there are no obstacles to the European aviation industry paying for its high environmental costs". It shows that by careful design, a pollution charge could be introduced in the EU with insignificant consequences for competition between European and non-European Airlines, between airports in and around Europe and between tourist destinations.

Charges based on emissions have the least market-distorting effects, while producing the greatest environmental benefits. However, one drawback is that there is no internationally accepted method for calculating emissions across an entire flight. Revenue-neutral emission charges, where revenue is paid back to airlines, offer less environmental benefit but would give less of an administrative headache.

Fuel charges offer similar environmental benefits to emission charges and are easier to administer, but raise more competitiveness and legal problems, the study concludes.

Follow Up:
European Federation for Transport and Environment, tel: +32 2 502 9909.

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