France 'will introduce eco-tax' on flights out of France

17 Sept 2019, 00:00
France 'will introduce eco-tax' on flights out of France

France will introduce an eco-tax on airlines flying out of France, which is expected to raise around €180 million from 2020, transport minister Elisabeth Borne said on Tuesday.

"We have decided to put in place an eco-tax on all flights from France," Borne said during a news conference, adding the funds will finance daily transport in France.

The tax will vary depending on the length of the flight, its destination and on the class (economy or business).

Flights within France or the EU will be taxed €1.50, economy flights out of the EU will be taxed €3, while €9 will be the price of the tax for business class flights within the EU and it will go up to €18 for business class flights outside the EU.

The tax will be applied to all companies taking off from a French airport, except for flights to Corsica, French overseas departments and territories, and connecting flights, the transport minister said.

The measure will be included in France's 2020 budget.

Shares in airlines across Europe fell on the news, with Air France down 5.2%, Ryanair down 4.8%, easyJet down 4% and Lufthansa down nearly 3% at midday on Tuesday.

However, activists said the new tax was unlikely to change consumer behaviour at the proposed levels and was low compared with other countries. Brussels-based NGO Transport and Environment (T&E) estimates airline taxes raise about €1 billion per year in Germany and more than 3 billion in Britain.

The French government also said that from 2020 it expected to raise €140 million from reducing tax benefits on diesel for trucks.

"The government is finally targeting tax breaks for the most polluting industries such as trucking and airlines, but these modest measures will not significantly reduce greenhouse gas emissions," said Climate Action Network's Lorelei Limousin.

Limousin said tax exemptions for jet plane kerosene fuel cost French taxpayers more than €3.7 billion per year. But she welcomed the fact France was taking action at home, rather than waiting for an EU-wide initiative on airline tax.

France said last month it wanted the new European Commission to push for an end to global tax exemptions for jet fuel to reduce CO2 emissions. It has also linked up with the Netherlands to try to convince fellow European nations to tax airline travel more.

Air France said the new tax would significantly hurt its competitiveness and represent an additional cost of over €60 million per year.

It said 50% of its flights were operated out of France, notably for its domestic network, where losses amounted to more than €180 million in 2018.

Klaus Röhrig, EU Climate & Energy Policy Coordinator at Can Europe, told Euronews that although the French measure is a "good first step" towards tackling carbon pollution created by the aviation sector, but that this measure is "not enough".

To set the highest tax level at €18, Rohrig said, is still "too low": "It does not really represent the pollution that flights are causing", he said. "It could be good to start with this price, and then increase it progressively."

Despite the fact that both countries are outside the EU, "we can't treat a flight to Morocco the same as a flight to Thailand", he said: one will consume a lot more kerosene than the other.

Rohrig said he wishes more EU member states will come forward in support of eco-taxes on flights. The Netherlands has passed a similar ecotax in the past, but had to backtrack due to political pressure, he said. "It needs to happen at the European level."

France and the EU, he added, should tackle the global tax exemption for kerosene to really make a difference.

Andrew Murphy, air travel specialist at T&E, told Reuters the new policy was "a more equitable tax. Driving a car is often unavoidable, but frequent flyers tend to be wealthy urbanites," he said.

French President Emmanuel Macron's government has said it wants to put the environment at the centre of its policies, but late last year it abandoned an attempt to increase tax on diesel fuel following the "yellow vest" protest movement.

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