March 5, 2021

France creates an ecotax for aviation and wants European taxation

Paris, Jul 9 (EFECOM) .- The French Government announced on Tuesday an ecotax that will apply since 2020 to the flights that take off from the airports of the country, a way to begin to make effective their will to promote a tax of this type at European level.

The Minister of Transport, Elisabeth Borne, explained that this ecotax will be applied to flight tickets that take off from a French airport and will be progressive: from 1.5 euros for domestic journeys or with a European destination in tourist class up to 18 euros for flights. intercontinental in business class.

The lines that connect with Corsica, with the French overseas departments or territories and other interiors in which it is considered that there is no competitive alternative means of transport will be excluded.

The measure, with which the Government expects to collect about 180 million euros per year that will be devoted essentially to railway infrastructure, is part of a policy of ecological transition that responds to a growing social demand and "incomprehension" on the fiscal treatment of transport aerial.

On June 6, at a meeting with her EU counterparts in Luxembourg, the French minister launched an appeal "in favor of an assessment of air transport at European level" that did not intend an immediate decision, but to prepare the ground for the entry into operation of the new European Commission in the autumn.

The announcement of the French eco-tax generated a reaction of rejection in chain in the aerial sector, beginning with which it appears as the main victim, Air France, since 50% of its flights leave a French airport and are likely to be taxed .

Air France, which recalled that its activity accounts for 1.1% of France's gross domestic product (GDP) and 350,000 induced jobs, complained that this tax would "strongly penalize" its external competitiveness.

The company estimates that it will cost more than 60 million euros annually, an amount equivalent to the measures that the Executive launched last year to support it.

The platform for Airlines for Europe (A4E), of which Air France is part alongside the other major EU airlines, added to the criticism of the French tax and proposed instead to seek solutions for sustainable aviation development.

The International Air Transport Association (IATA), which represents more than 260 companies from all over the world, also considered the decision of the French Government to be wrong because of the damage it can cause to the airline business in this country and the jobs it generates.

The big European airlines suffered a blow on the stock market with the announcement of the French ecotax, starting with Ryanair, which left 4.94% on the Dublin Stock Exchange, and Easyjet, which registered a decrease of 3.35% in London.

AirFrance lost 3%, Lufthansa 2% and IAG 1.56% lost on the Madrid Stock Exchange.

The idea of ​​a rate for airlines in the EU as a whole has been hovering over the meetings of ministers in Brussels for months, with France, the Netherlands, Belgium and Luxembourg as the main promoters.

One of its main arguments is that the airplane is the means of transport that generates more pollutant emissions per passenger and per kilometer.

If you compare a round trip between Paris and Marseille with the train (in France the electricity is mostly of nuclear origin), a passenger by plane can generate a volume of carbon dioxide up to about 50 times higher.

In addition, kerosene used by aircraft is exempt from taxes, on the contrary, for example, that the fuel in cars, for which taxation can reach two thirds of the price.

Large aircraft builders, such as Boeing and Airbus, and aeronautical engines, such as GE Aviation, Rolls Royce, Safran and United Technologies, reacted in June reaffirming their commitment to limit their environmental impact and asking the authorities for incentives, but not penalties.

They explain that commercial aviation represents around 2% of global carbon dioxide emissions and that the continuous technological improvements have allowed that since 2006 the rate of progression of these emissions is half that of increase in passenger traffic. .

For Spain, whose economy is heavily dependent on the income of tourists who arrive mainly by plane, the Government has pointed out that a tax on aircraft kerosene is not the "first option" in environmental taxes.

(tagsToTranslate) France (t) ecotax (t) aviation (t) European tax (t)

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