If governments are serious about reducing the environmental impact of aviation, they may have to make biofuels a more attractive alternative. However, this might come at the cost of taxing ordinary jet fuel, something that will likely upset a lot of airlines.
Airlines are facing increasing scrutiny over their damaging environmental impact and are having to search for ways to reduce their carbon emissions.
At the moment this mainly comes from efficiency improvements in newer aircraft and controversial carbon offsets but some countries, like France, are bringing in taxes to try and fund greener forms of transport. Not everyone agrees, however.
“If you look at what taxes have done in terms of our environment I will tell you nothing. They do nothing. When governments have successfully developed renewable energies they have not taxed, they have subsidized…they have provided reduced tariffs,” said Alexandre de Juniac, the chief executive of airline trade body the International Air Transport Association.
De Juniac suggested the potential for governments to help subsidize biofuel to make it cheaper to buy.
“The cost is too high, you don’t have mass production, you don’t have a distribution system so if… government could help us develop that, that would be a very good incentive, he said.
The elephant in the room though is that the airline industry has mostly enjoyed a 75 year tax exemption on jet fuel, which has kept prices low and arguably stifled investment in alternatives.
In some parts of the world airlines pay tax on fuel for domestic flights and of course there are other taxes, for example air passenger duty in the UK.
De Juniac is also wary of airlines over promising developments in areas such as battery-powered planes.
“The research points to probably a bit of hybrid, a bit of electric. Hydrogen could also be a solution but it’s not short term. We shouldn’t lie. We should work on what is useful and work able now,” he said.
737 Max Concerns
With the Boeing 737 Max aircraft still grounded following two fatal crashes, all eyes are now on global safety regulators.
The only problem is that country and regional bodies may move away from a a process of mutual recognition, meaning that the jet could conceivably return to service in one part of the world but not in another.
The potential fragmentation of the industry is something that concerns De Juniac.
“If now there is one certification process and one certification authority per country or per region it will be a nightmare and I will tell you the consistency and the effectiveness of the safety system will be significantly reduced. So we strongly advocate in favor of a single authority of certification and mutual recognition. And so when we see fragmentation among regulators on the 737 Max we are very worried,” he said.
Have a confidential tip for Skift? Get in touch
Photo credit: The sun and an aircraft. The CEO of IATA wants government help not new taxes. Bernal Saborio / Flickr