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PB February/March 2024 February/March 2024 65
Ryanair’s O’Leary spins
the figures to downplay
aviation’s impact
The 2021 ESRI Report on ‘The Impacts of
Aviation Taxation’ in Ireland gives aviation
emissions as 13.9% of EU total transport
emissions
“I always feel somewhat aggrieved that the
airlines are the poster child for climate change,
when airlines account for 2% of CO2
emissions”
— Michael O’Leary, The Guardian, 28/12/2023
F
lying is one of the most carbon-
intensive modes of transport.
Michael O’Leary is not far o when he
claims that aviation is responsible for
only 2% of CO2’s worldwide CO2
emissions.
What he omits to say is that the non-CO2
impacts are bigger, more than doubling the
climate impact of aviation.
Advances in satellite technology and
laboratory experiments have added to new
computer power for climate modelling leaving
no doubts that the concentration on CO2
reduction masks the far greater impact of
aviation’s non-CO2 emissions. These are
nitrous oxides, sulfur dioxide, soot, particulate
matter [PM], and water vapour. Water vapour
yields contrails, cirrus clouds that trap heat in
the atmosphere and can linger for 12 hours or
more.
Depending on the type of aircraft, the altitude
at which emissions occur, and the atmospheric
conditions (as well as the length of time they
persist), non-CO2 emissions are more than
twice those of CO2, at 67% of the total. And,
while they are shorter-lived, their impact is
proportionately greater than their volume —
75% of aviation’s overall warming impact
comes from non-CO2 emissions.
The industry agency, IATA, has succeeded in
fending o addressing the impact of non-CO2
emissions on the grounds that we lack scientific
certitude – “the relative scale of their impact is
highly uncertain” — promising to implement
them “when the international scientific
community agrees on the emission factors for
non-CO2 gases”.
And the scale
Aviation is a relatively young industry and it
began with the highest of motives. The Paris
Convention in 1919 defined the purpose of
aviation as the “peaceful intercourse of
nations”. The Chicago Convention of 1944
proclaimed its purpose as “to create and
preserve friendship and understanding among
the nations and peoples of the world”. Thus,
By Tony Lowes
Chapter 14 of the Chicago Convention expressly
exempted aviation from taxation in any form:
“No fees, dues, or other charges shall be
imposed by any contracting state in respect
solely of the right of transit over or entry into or
exit from his territory of any aircraft of a
contacting state or persons or property
thereon”.
Internationally, the Kyoto Protocol was
adopted in 1997 but intense lobbying meant
that it committed members only to “pursue”
reduction of emissions of CO2 from aviation.
The 2015 Paris Agreement does not specifically
address aviation’s CO2 emissions within its
main text, but created the International Civil
Aviation Organization (ICAO) Carbon Oset and
Reduction Scheme for International Aviation
(CORSIA) to address aviation emissions.
CORSIA – which is linked to the currently-stalled
revision of EU Energy Directive in Brussels -
aims to stabilise CO2 emissions at 2020 levels
by 2025 and beyond. The UK ‘roadmap’ aims to
reduce CO2 emissions to zero by 2050 while still
growing UK aviation by 78%.
Big emitters such as China, Russia, India and
Brazil have not indicated they would join the EU
initiatives.
O’Leary’s claim that aviation is only 2% of the
Aviation: cull the fleet
ENVIRONMENT
66 February/March 2024 February/March 2024 67
CO2 emissions world-wide should be contrasted
with the 2021 Economic and Social Research
Institute [ESRI] Report on ‘The Impacts of
Aviation Taxation in Ireland’. That gives aviation
emissions as 13.9% of EU total CO2 transport
emissions.
Running to keep up
The problem with reducing aviation’s impact is
that the ‘demand-led’ industry is growing faster
than the savings. The industry says Boeing Max
aircraft are 25% more ecient on a “seat by
seat basis”.
In fact, technical progress has already led to
a 24% decrease in fuel consumption per
passenger-km since 2005.
But the number of passengers is up by 60%
and flights departing and arriving from Europe
are likely to increase by 62% by 2050 compared
to 2019 levels, according to Transport and
Environment Europe, an NGO.
Radical solutions like green hydrogen fuel
will require new infrastructure on the ground as
well as new aircraft design.
Certainly we are witnessing the slow
evolution of more ecient aircraft — generated
by the likes of new composite manufacturing
materials and foldable wings — and fuels like
hydrogen that require infrastructure changes.
The industry’s chimera is ‘drop-in sustainable
fuels’.
The idea that ‘they are here’ was the message
behind a UK Government push to convince the
public they can fly without environmental
damage. It spent £1m on a Virgin Atlantic
Boeing 787 Dreamliner flight from London to
New York last November, claiming 100%
sustainable aviation fuel.
That the fuel had to be imported into the UK
was omitted from the calculations and while
88% was from renewable resources — cooking
oil, tallow and ‘sustainably sourced’ vegetable
oils — 12% was ‘aromatics’, the fossil fuels that
remain requisite for safe use in existing
engines. Calling it 100% sustainable is a good
example of the subtle industry greenwashing
– the flight wasn’t possible without fossil fuel.
They are not here.
There are four main drop-in fuels:
• from renewable resources,
•
from e-fuels produced using renewable
electricity and feedstocks — like hydrogen
•
from ‘biofuels’ derived from algae or
sugarcane and
•
from ammonia if produced through
electrolysis.
The targets abound. Under the UK’s
Department of Transport’s Sustainable Air Fuels
mandate, at least 10% of fuel used by airlines
in the UK must be made from sustainable
feedstocks by 2030.
Aside from funding the Dreamliner stunt, the
UK is providing £10m in funding for five start-up
companies. Proposed blending requirements
for ‘sustainable fuels’ currently proposed are
2% in 2025 reaching 63% per cent in 2050, with
a minimum share of synthetic aviation fuels of
0.7% in 2025 and 28% in 2050. The current
figure is 0.2%.
The problem is not scientific but engineering.
Increasing the scale of production to meet the
required global need will see unknown
engineering problems of monumental
proportions.
Blimps, airships, balloons and
wingcopters
Meanwhile, ‘Lighter than Air’ vehicles [LTA] are
making a comeback. Once the height of luxury
on transatlantic crossings, silent, smooth, and
spacious, the Hindenberg disaster in New York
City in 1937 killed 36 people and set the industry
back. Transatlantic liners – themselves capable
of great luxury as well as serving an economy
class – took over until the air fleets arrived.
Filed with extremely light gas — most vehicles
now use helium, not hydrogen, the flammable
gas that brought the Hindenburg down — and
powered by electricity, blimps, airships, and
balloons make ‘floating the new flying’. While
slow (130km/hour), the new aircraft can
compete with airplanes on shorter routes, in
part because of quicker take-o and landing
times and where airport infrastructure is scarce.
A Lockheed Martin Hybrid Airship, which is
designed for cargo transportation to remote or
hard-to-reach areas, combines elements of
both airships and fixed-wing aircraft to provide
greater payload capacity and flexibility. A
startup called Sceye is building a helium-
powered vehicle that can hover in the
stratosphere, high enough to rival the
capabilities of some of Musk’s satellites in low-
Earth orbit.
But none of these will address the industry’s
ever-growing impact on our climate.
Ticket Taxes, fuel duties, and
VAT
Taxes should work.
In the ‘green’ days of 1999, the Irish
Government introduced a €10 ‘Irish Air Travel
Tax’ on all flights greater than 300 km (I0%) and
€2 on shorter flights, raising €125 million a
year. ‘In the current economic climate all sectors
of society must contribute”, the Dáil was told.
Ryanair announced it would have no choice but
to cut flights from Shannon, a reduction It said
would lose 700,000 passengers a year. It even
complained to the EU.
In March 2011 the reduced rates for airports
within 300 km was ruled by the EU to be an
interference with the internal market. A flat €3
rate was introduced and retitled the ‘Air
Passenger Duty’. Strongly opposed by the
airlines and tourism industry as making Ireland
less competitive, hitting the poor hardest, and
Non CO2 emissions
represent two thirds of
aviation’s impact on
climate change
66 February/March 2024 February/March 2024 67
IRELAND: THE UNTAXED
OASIS FOR PLANES
The tax ‘exemptions’ for the aviation
industry in Ireland extend right
down to the airport’s retail outlets’
exemption from the plastic bag tax
Ireland was unexpectedly declared a tax
haven for aircraft leasing companies by the
Brazilian Revenue Service in 2016, imposing
an extra 25% tax. Ireland has a unique role in
international aviation — the leasing of aircraft:
60-90% of the world’s flights are leased from
12 of the major firms based in Dublin’s
Financial Services Centre.
The nature of the industry favours the
leasing of aircraft rather than outright
ownership as it allows airlines to quickly
expand or contract, which is critical to those
that rely on low fares to drive demand.
The key is that while leases on land are
subject to rent, in the sky lessors can write o
the cost of the aircraft itself and any loan
interest, enabling Ireland to tout ‘no
withholding tax’ as a competitive advantage.
The industry is also exempt from stamp duty
on title transfers and mortgages. And Ireland’s
double taxation treaties allow multinational
companies to shift profits out of their home
countries and into Ireland in order to reduce
their tax liabilities. The tax ‘exemptions’ for
the aviation industry in Ireland extend right
down to the airport’s retail outlets’ exemption
from the plastic bag tax.
The Brazil decision had the potential to
wreak havoc on the aircraft leasing sector for
the entire country. It was estimated that
approximately 65% of the Brazilian
commercial fleet was leased from Irish-based
lessors. This included countless helicopter
leases for aircraft used to support Brazil’s oil
and gas industry, most or all of which suddenly
became subject to an unexpected, significant
withholding tax burden.
The decision was reversed the next year.
The cost in revenue to the Irish exchequer
forgone through the exemption to withholding
tax was estimated by Oxfam in 2017 to be
€577m. Senator Frances Black recently cited
Central Statistics Oce figures in the Dáil
giving this subsidy as €634m in 2019. In
2022, the Committee of Public Accounts found
that the exemption from withholding tax on
lease rental income is “a significant cost to the
Exchequer” and recommended that the Irish
government review the exemption.
The industry is now seeking a ‘carve out’
from the Corporation Tax rise to 15% which
they say ‘could impede their ability to reduce
their tax bills in Ireland’.
not raising enough revenue to justify the cost
of collection, it was abolished by the then Irish
Minister for Transport, Tourism and Sport — Leo
Varadkar — in 2014.
Stating that the government believed that the
tax “is no longer in the best interests of Ireland’s
economy”, Varadkar promised a new Air
Passenger Duty that was “more targeted and
less damaging to tourism”. It never happened.
Meanwhile, it was said that the Attorney
General’s oce had to assign four full-time sta
to the compensation claims from O’Leary alone.
Standard arguments are the threat to
connectivity for a little island and the cost to the
economy of squeezing this industry which
feeds so many good jobs, particularly in
leasing.
In fact, independent studies show that, if
introduced gradually, the impact on a country’s
economy is very small indeed and the projected
increase in flight numbers, if demand continues
current increase patterns, dwarfs any slight
threat to connectivity. The tourists lost are at
the lower end of the financial spectrum and
would be those spending less while domestic
tourism would actually benefit from ’Flyskam’,
the imported Scandinavian notion of flight
sham.
It was not until 2012 that aviation emissions
joined land-based industries in the international
Emissions Trading Scheme [ETS]. Even then the
industry was given an annual free allowance for
95% of average total emissions in the years
2004-2006. But because of the growth of the
industry, the free ride covered only 60% of the
CO2 emissions in 2014 and just 44% by 2019.
The EU’s plans to reduce the allowances to zero
by 2026 are now dependent on who is elected
to this year’s EU Parliament.
The idea of introducing an EU aviation tax
which would be restricted to climate’s ‘Loss and
Damage’ from climate change would be popular
with the public. But restrictions on this revenue
would be resisted by Member States, who
consider such conditions are ‘Brussels’
violating their sovereign rights.
The Tax Gap
The cash cow has many names: VAT; an Air
Transport Tax, Levy, or Duty; a Civil Aviation Tax;
an Air Passenger Solidarity Tax; an Embarkation
Tax; a City Council Tax; a Luxury Tax; a Fiscal Tax.
Air travel taxes raised €8.8 billion across
Europe in 2022, with the bulk of revenues
coming from ticket taxes (€5 billion) and
domestic VAT (€1.1 billion).
The French Government (which has four ticket
taxes) used its national airlines impending
bankruptcy through Covid to prohibit domestic
flights where an alternative direct train service
operates in under 2.5 hours.
In a July 2023 Report, Transport and
Environment Europe [‘Aviation Tax Gap: How
Much Revenue are Governments losing Out to
Due to Poor Aviation Taxation’] found that the
total European tax gap amounted to €34.2
billion in 2022. The fuel tax and ETS exemptions
amounted to €20.5 billion and the VAT
exemption to €18.8 billion, partially oset by
€5 billion in revenues from aviation ticket taxes.
Unfortunately, passengers have a relatively
high willingness to pay (WTP) – in the UK, £16
- £37 extra already – before behaviour changes.
Taxes high enough to change behaviour would
(currently) be politically unacceptable.
Yes to coercive measures, if
climate change is imminent
We learned during the Covid pandemic that
aviation is not actually indispensable. In 2020,
international air travel reduced by 97% on the
previous year. A recent Swedish study found
relinquishing air travel is the option consumers
found most feasible for reducing their climate
footprint – ahead of a new car, streaming TV,
new-pet ownership — or becoming a vegetarian.
The authors of that Swedish study suggested
“coercive measures” will only be supported if
they are seen to be eective – and if the threat
from climate change is seen as more imminent.
But the threat of climate change is already
imminent.
Michel O’Lery: erosexul
