As airlines are being hit hard by the coronavirus crisis, there are fears that the relaunch of the aviation sector is taking place in disregard of environmental considerations. In this context, EUROPE met with Gilles Dufrasne, a member of the non-profit organisation Carbon Market Watch and a specialist in carbon market and international aviation negotiations, to take stock of the measures in place, planned or potential, to help control emissions from this sector [interview by Damien Genicot].
Agence Europe - You believe that the CORSIA system will prove to be ineffective in reducing the international airline industry’s CO2 emissions. Why?
Gilles Dufrasne - There are several reasons. First of all, CORSIA's objective of carbon-neutral growth from 2021 is in itself totally insufficient as it tackles emissions above a certain reference threshold without worrying about emissions below this threshold.
The emissions covered by the scheme thus represent only about 16% of global CO2 emissions from international flights and about 10% of all CO2 emissions from the aviation sector.
Next, the system itself does not create an incentive to reduce emissions in the aviation sector, since the objective is simply to offset these emissions by requiring companies to buy carbon credits.
However, the cost of these carbon credits ($3 per tonne of CO2 on average in 2018) is totally incomparable with the cost of reducing emissions directly within the aviation sector. If alternative fuels were used, for example, the cost would be around $200/tonne of CO2 for the cheapest fuels, which are not available in sufficient quantities anyway.
In addition, carbon credits are not always linked to quality projects that actually reduce emissions.
You also criticised the recent decision of the Council of the International Civil Aviation Organization (ICAO) to change the reference period for calculating the compensation requirements of airlines during the pilot phase of CORSIA (see EUROPE 12518/5).
As a result of the impact of the coronavirus on the aviation sector, the airlines have obtained that the reference threshold is no longer the average of 2019 and 2020 aviation sector emissions, but only 2019 emissions.
With Covid-19, the threshold initially set would have been lower than expected due to the unexpected sharp decrease in air traffic and, therefore, in emissions from this sector, which would have forced airlines to compensate more.
In concrete terms, this change in the reference period means that CORSIA is unlikely to have any impact before 2023 or even later, as the sector's emissions are likely to remain below the new threshold based on the year 2019 for a few more years.
The European Commission plans to review the EU Emissions Trading System (EU ETS) Directive on aviation. What should this revision include to guarantee the compatibility of the ETS with CORSIA without weakening the EU's climate ambition?
In its roadmap (see EUROPE 12521/9), the Commission proposes different options, some of which would lead to replacing part or even all of the ETS by CORSIA. For us, this kind of solution is unacceptable, since it is believed that CORSIA will have no impact.
It is thought that the EU should stop applying its strategy of reducing its own policies in favour of less ambitious international systems in the hope that this will encourage countries such as China, Brazil, Russia, India or the United States to join the movement.
It doesn't work (out of the five, only the US decided to participate in the pilot phase of CORSIA) and it only leads in the end to a weakening of EU policies.
What else should this revision include?
All forms of free distribution of permits must be stopped immediately. Currently, the airline industry receives 85% of the permits originally allocated to it free of charge.
In addition, there is the issue of international flights outside the European Economic Area (EEA).
Following enormous political pressure, in particular from the United States, it was decided to grant an exemption for international flights outside the EEA (see EUROPE 11924/5). This is the ‘Stopping the clock’ mechanism.
This means that, for these flights, the ETS rules are put on hold until 31 December 2023.
For us, the revision should not renew the ‘Stopping the clock' mechanism so that the ETS system applies to international flights outside the EEA, since CORSIA will have a much smaller impact than the ETS.
Furthermore, the ETS does not create competition concerns, since all airlines, whether US, European or other, with flights to, from or within the EEA would be covered.
Finally, there is the issue of non-CO2-related climate effects, such as nitrogen oxide (NOx) particulate matter. It is thus estimated that the effect of aviation on the climate could be two to four times greater than the effect currently taken into account, based solely on the sector's CO2 emissions.
During the last ETS review, the Commission was mandated to produce a report on this issue. It must publish this analysis, which normally should have been done before 1 January 2020, and propose measures to regulate these non-CO2 effects.
What do you think of the idea of a tax on kerosene?
We're all for it. There is no reason why trains and cars should pay tax on fuel and not airplanes.
The argument often used against this proposal is that the Chicago Convention (Editor's note: the Convention on International Civil Aviation) prohibits taxing aircraft fuel. In fact, it only prohibits taxing the fuel contained in the tanks of an aircraft when it arrives in a country.
It is therefore very possible to tax the fuel that an airline takes in a certain country. In fact, there is no international convention that would prohibit taxing kerosene.
On the other hand, there are bilateral agreements between countries. The provisions of these agreements whereby the signatory States agreed not to tax aircraft fuel should be terminated.
Some will tell you that the kerosene tax will result in an increase in the price of tickets, thus preventing people from continuing to travel by plane.
It's true that it has an impact on the consumer, but it won't be huge.
One must also keep in mind that a plane trip from Paris to Palermo for €20 is not something normal. In reality, it has a climate cost, a social cost. This is a significant non-financial cost that we do not necessarily see and that we make everyone pay for it.
I would therefore give the opposite argument: it is not taxing kerosene and not putting a price on carbon that is socially unfair, because those who decide to fly impose a climate cost on the rest of the population.
It is in fact socially regressive not to tax air travel, since it is the richest individuals who can travel the most and who are indirectly subsidised by the poorest, since the latter will suffer more strongly from the climate impact generated by such travel. This has repercussions both within a society, but also in the North-South dynamic between countries.
Beyond that, a recent study (https://bit.ly/3i6sJj1 ) has shown that in Europe, the share of the aviation sector in a person's carbon footprint is higher among the wealthiest. If we put a tax on air travel, it will automatically affect the richest people more.
While some airlines have already received public aid to deal with the coronavirus crisis, environmental NGOs and others are calling for this aid to be made conditional on compliance with climate targets. What should these ‘green conditions’ be?
In my opinion, the general idea of not offering flights below a certain number of kilometres would be a good start.
But most of the conditions are actually very difficult to apply at the level of a specific company.
For example, if you forbid Brussels Airlines to fly below 1, 000 km in exchange for aid, the only consequence will be that other competitors will offer exactly the same flight.
So I think that when a government decides to give a loan to a company, it must at the same time take measures that cover all flights in the country.
The support given to airlines could in fact help governments to put in place rules at national and European level (kerosene tax, VAT for flights, measures governing the expansion of airports and the subsidies granted to them), which in another context would be more difficult to implement.