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View from Brussels - Aviation urged to go green for green

Airlines have been laid low by the coronavirus outbreak and now want public money to help them survive the slump in air travel demand. But carriers might yet have to commit to stricter environmental targets to unlock bailout funding.

Border closures and travel restrictions have played havoc with Europe’s flight operators, many of which have curbed services altogether and laid off staff. Government intervention will almost certainly be needed in order to save many from bankruptcy.

The European Union opened the door for that kind of bailout action last month when its normally stringent antitrust division - headed by the Borgen-inspiring figure of Margrethe Vestager - relaxed its rules amid the coronavirus outbreak.

EU countries, including the UK which is still bound by most laws until at least December, have since submitted requests to inject cash into employment schemes, public transport firms and other measures which would have normally fallen foul of state aid safeguards.

Airline bailouts have not yet come in thick and fast, although Italy’s government decided to help out already-embattled flag-carrier Alitalia, after prospective buyers were scared off by the virus’s economic impact.

Part of the delay is down to the fact there are a growing number of calls for airlines to do more to curb their environmental footprint in return for public money. 

The EU’s erstwhile climate chief, Miguel Arias Cañete, last week said that government money “must be conditional, otherwise when we recover we will see the same or higher levels of carbon dioxide”.

He added that carbon taxes or emissions trading should be considered to bring aviation emissions to heel. Cañete is a member of the EU’s conservative political family, as is the current commission president and the transport commissioner, so pressure could yet tell on Brussels to roll out stricter measures.

National governments are already starting to diverge on what should be done. Poland suggested in early March that free pollution permits issued to airlines under the EU’s carbon market should be scrapped, while the Netherlands confirmed that its upcoming aviation tax will still kick in next year despite the virus outbreak.

Airlines for Europe, an industry group that represents some of the continent's largest carriers, said it was “astonished” that the Dutch government is proceeding as planned, adding that any revenues raised will go straight into the general budget, rather than contribute to green initiatives.

The industry’s fortunes are slightly brighter in France, where the government got EU approval to defer a whole host of aeronautical taxes until 2021 and to offer airlines a 24-month grace period in which to pay what is owed.

It is still unclear which taxes will be suspended, although a French diplomat told E&T that a new green levy on tickets is likely to be put on ice for the time being.

Clean mobility group Transport & Environment said in a statement that “EU governments should make airline bailouts conditional on carriers paying fuel, ticket and other taxes once the crisis has passed” and that carriers should commit to using green technologies here and now.

The industry has previously claimed that sustainable fuel development is simply too immature to rely on currently and that it has no other option than to use kerosene. In late March, the European Commission launched “ReFuelEU Aviation”, a scheme aimed at changing that.

Advanced biofuels and e-fuels, produced using renewable energy, make up just 0.05 per cent of jet fuel globally, so the initiative is designed to boost supply and incentivise demand. A public consultation window is open and the Commission hopes to launch legislation as soon as possible.

But any green aviation push in Europe will have to contend with developments across the Atlantic, where the US government has agreed to pump billions of dollars into its airlines, with little to no environmental strings attached. 

House speaker Nancy Pelosi had proposed obliging carriers to halve their emissions by 2050 in return for the money but that idea fell by the wayside. 

The US is a powerful influence over global aviation matters. The EU’s carbon market only includes flights that take-off and land within the bloc, largely because of American lobbying at UN level during the last decade.

Technology, again, holds the answer to this particular problem though. It could just need a bit of courage from Brussels to chart the right flightpath towards cleaner planes once normality returns after the virus threat passes.

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