[Article] EU air ticket tax

Thomond Pk

EU pollution penalty could add to price of air tickets
By George Parker in Brussels
Published: July 24 2005 22:08 | Last updated: July 24 2005 22:08

Ticket prices for return flights out of European airports could rise by up to €9 under a proposal by Brussels to make airlines pay for the pollution they cause.

The European Commission wants to include airlines in its strategy to tackle climate change, putting them in the same category as power generators and oil refineries.

Under plans seen by the Financial Times, the Commission wants airlines included in Europe's emissions trading scheme, which caps the amount of carbon dioxide an industry is allowed to produce.

The proposal has the backing of the British European Union presidency and is accepted by some leading airlines, including British Airways.

An aide to Stavros Dimas, EU environment commissioner, said: “Some airlines see this as inevitable and the least bad solution but Lufthansa is among those that are concerned.”

Mr Dimas said that including airlines in the emissions trading scheme was “the most promising way forward”, preferable to alternatives such as a tax on kerosene or a new ticket tax.

His draft proposal accepts that the cost of the emissions crackdown was “likely to be passed on to air transport users” with a surcharge on a return ticket of up to €9. Mr Dimas hopes to present his plan in the autumn after a wide-ranging environmental programme was approved in principle by the Commission last week. However, new legislation is unlikely to come into force until several years after the original 2008 target date.

The draft paper says: “As regards the coverage of flights, the Commission believes that all emissions from any flight departing from the EU should be included.”

The inclusion of non-EU airlines in the scheme would help protect the competitiveness of European airlines.

The Commission adds that including flights that both depart and land inside the EU would address only 40 per cent of the emissions caused by flights leaving European airports.

Europe's emissions trading scheme, which started on January 1 the first of its kind in the world caps emissions of carbon dioxide.

Companies are issued with free permits for each tonne of carbon dioxide they may produce. Cleaner companies that do not use their allowance can sell their permits on the market to those companies lagging behind.

The Association of European Airlines said it was evaluating the emissions trading scheme but said it was already using better technology to reduce emissions.

It admitted that some airlines, including Lufthansa, had raised concerns but they were mainly related to the timing of the scheme's introduction.

Mr Dimas said that, although airlines contributed only 2-3 per cent of EU emissions, that share would grow as air travel increased and undermined Europe's efforts to complywith the Kyoto climate change treaty.

http://news.ft.com/cms/s/0b1dd96e-fc7b-11d9-8386-00000e2511c8.html