Airlines Reject Germany’s Proposed Environmental Tax

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The aviation industry reacted negatively to German Chancellor Angela Merkel’s proposal to levy an environmental surcharge on airline passengers flying out of German airports, according to press reports.

The Associated Press reported that Lufthansa's Chief Executive Wolfgang Mayrhuber estimated the tax would increase ticket prices by $9.5 - $19 a ticket.

Merkel said she wanted the tax in place until aviation emissions are included in Europe’s carbon trading scheme, which go into effect in 2012, at which point the tax would be repealed, according to the Times of London. Lufthansa has previously said it is in favor of delaying implementation of a carbon trading scheme. According to the AP report, the tax would raise $1.19 billion. Passengers embarking from British airports already pay a similar tax.

The CEO of the International Air Transport Association (IATA), Giovanni Bisignani, said the tax would harm the aviation industry and confer no environmental benefit. He said governments could assist the industry in reaching its goals by improving infrastructure and investing in and providing financial incentives to drive innovation.

Meanwhile, the IATA asked governments to work together to support the industry’s goal of increasing fuel efficiency 1.5 percent each year. That goal would mean cutting CO2 emissions by half of their 2005 levels by 2050 and switching from traditional kerosene-based jet fuel to compressed natural gas within the next ten years. Using biofuels and implementing energy saving technology can also help achieve that goal, he said. Airbus parent EADS recently tested a plane powered by an algae-based biofuel.

According to reports, Paul Steele, director of aviation environment at IATA, said the industry had reduced CO2 emissions by 71.4 million tons from 2004 to 2009. Bisignani said airlines must also reduce the amount of fuel wasted from inefficiency by up to 18 percent, equivalent to 120 million tons of CO2.

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