European notebook: Attaching green strings to airline bailout

Stephen Rae considers whether politicians have the firepower to force climate regulation on cash-starved airlines.

By Stephen Rae

(About the author: Stephen Rae is a leading European writer who splits his time between Brussels and Dublin. He is the former Group Chief Editor of INM, Ireland’s largest online and print media group. He serves on the board of the World Association of News Publishers (WAN-IFRA) and previously served on the board of the World Editors Forum. He was appointed by the European Commission to its High Level Expert Group on Online Disinformation. Stephen grew up on Ireland’s southwestern-most Atlantic coast and has always been committed to green and biodiversity issues.)

  • Green conditioning for bailing out sectors like aviation: Will airlines play along?

  • South Korea could be the first Asian country to work with the EU on its own version of the Green Deal.

  • On the next episode of the European Parliament’s Environment Committee: “Look Inside the MEP’s Home Office”.

DUBLIN (Callaway Climate Insights) — There are two types of aircraft flying in Europe right now: cargo planes and empty planes.

The effective 95% reduction in air travel on the continent has been welcomed by climate activists who point to the massive carbon benefits.

The top 10 carbon emitters in Europe are coal plants — with one exception. No frills and low-fares airline Ryanair, the continent’s biggest, came in at No.7 on that list in 2019 — highlighting the urgent need for the industry to clean up its act.

The big question here is whether Europe will place carbon conditions on its airlines in return for the urgent taxpayer-funded handouts they need to stay in business in the wake of the Covid 19 pandemic. While the European Commission insists it will demand climate commitments, not everyone is convinced this is what will happen.

The European airline industry stands on the brink of bankruptcy with many of the sector’s household names of such as British Airways, Air France and Lufthansa left with just a few weeks of cash reserves. The European Commission has responded by lifting laws banning state aid to the sector. Even the mighty Lufthansa, which has been strident up to now in objecting to state subsidies, has joined the queue to seek survival loans from the German government.

Of course, the airlines would dearly love to accept the cash without any commitment to reducing their carbon emissions. Top-of-their-list of exemptions would include the scrapping of the proposed EU-wide tax on jet fuel and the retention of free allowances within Europe’s Emissions Trading System (ETS).

This growing resistance to aspects of the Green Deal by the industry was to be found in the response by lobby group Airlines for Europe, or A4E. “We definitely don’t need new taxes right now,” said spokeswoman Jennifer Janzen. “Environmental taxes are just going to make this bad situation even worse,” she claimed.

It is going to be a test of Commission President Ursula von der Leyen. 

Von der Leyen so far has been insistent that airlines must pay their fair share for the industry’s impact on greenhouse gas emissions.

The way out of this crisis for sectors, including airlines, “means doubling down on our growth strategy by investing in the European Green Deal. As the global recovery picks up, global warming will not slow down,” she explained to MEPs last week.

A Commission spokesman added: “In line with the increased ambition proposed under the European Green Deal, all sectors including aviation, are expected to contribute to the EU’s 2030 economy-wide target.

Miguel Arias, Europe’s former Climate Commissioner, says it is absolutely crucial that the airlines have carbon conditions attached to the taxpayer euros they receive. State aid “must be conditional otherwise when we recover we will see the same or higher levels of carbon dioxide.”

Someone with a growing profile in the Brussels Bubble is the chair of the European Parliament’s environment committee — French MEP Pascal Canfin. The smartly dressed Eurocrat insists the airlines have to sign up to an “ecological transformation contract.” 

Not so convinced that the airlines will play ball is fellow member of the committee, Green MEP Bas Eickhout. The Dutch politician points out that whatever the bureaucrats in Brussels think, individual countries can place their own conditions on loans to the aviation sector. That, he says, will mean separate debates in every country leading to no clear European Union position. That would be a “very bad signal,” he told a committee meeting Tuesday. Green conditioning for sectors like aviation must be insisted on, he told fellow MEPs.

This will be the crux of the matter.

Will von der Leyen hold firm on her commitment to the Green Deal and a carbon neutral Europe by 2050 in the face of countries seeking derogations for vital national interests such as their powerful airlines?

Or will she be forced to water down the proposals as premier Angela Merkel lobbies for Lufthansa, Emmanuel Macron and Mark Rutte for Air France and KLM, and Pedro Sanchez for Iberia owner IAG -- which also owns British Airways?

This is a golden opportunity for Europe to green its airline sector. Will Europe grab that opportunity or revert to the bad old ways? We’ll see but it will be a mighty political battle. This is a critical juncture for the continent and its politicians. 

South Korea could be the first Asian country to work with the European Union on drafting its own version of the Green Deal. 

The European Parliament heard Tuesday that EU officials and their South Korean counterparts will meet shortly to discuss how best to work together on a green deal. Other countries could soon follow.

The news came as Climate Commissioner Hans Timmermans pledged that the Covid-19 pandemic would not be used to by big industry to derail the Green Deal. “The Green Deal is not a luxury that we drop when we hit another crisis. It is essential for Europe’s future,” he told MEPs.

The Green Deal is the name given to Europe’s commitment to be carbon neutral by 2050.

He admitted, however, that it could be a hard sell in the circumstances and it was essential there were quick wins for consumers. Areas where the European Union could win over millions of citizens included:

  • Grants to install solar panels

  • Grants for home installation

  • Help families to buy a “clean car.”

  • Ecological car scrappage schemes

The schemes would also help SMEs rebuild after the pandemic and ensure “periods of unemployment are as short as possible.”

Using medical analogies, Timmermans described Covid-19 as an “enormous, sudden shock” but said climate change “compared to high blood pressure, which if ignored will kill you.”

Droughts in the south of Europe and enormous disruption to harvests showed the climate crisis was ongoing danger “and it will only get worse unless we keep temperatures down.”

There were pressures from industry to go back to the “old ways” and veer away from the Green Deal but it had to proceed and was Europe’s growth strategy, he said. “It is not a luxury, it is about the survival of humanity,” he warned MEPs.

Referring to talks with South Korea and the Asian nation’s interest in the Green Deal he spoke of the importance in Europe’s soft power and investment in “Carbon Diplomacy.”

One of the first identifiable casualties of the Covid crisis on the Green Deal is the deadline for the European Union’s “farm-to-fork” strategy.

Farm-to-fork is an important part of the biodiversity agenda, setting targets for organic farming and pesticide use. The strategy was due to be published March, now it is likely to be next month before it finally sees the light of the day. 

Green MEP Bas Eickhout is not happy with the delay in preparing the policy to ensure “our food systems are more sustainable.” Eickhout says the March deadline was pushed out to the end of April “and now is further postponed. This cannot be tolerated.”

Climate Commissioner Frans Timmermans responded that he was using “maximum pressure” to have the strategy finalized and promised the postponement would be no longer than a “matter of weeks.” Fingers crossed on that one.

Tuesday saw Timmermans appear by video before the European Parliament’s Environment Committee.  

It was a strange experience. It could have been titled an episode: “Look Inside the MEP’s Home Office.”

Few of the offices were exceptional or even impressive — probably a good idea with a handful of voters watching. Most had some books on display in the background (always a good idea!)

In the cavernous parliament building (capacity 751) itself there were just three MEPs present — all socially distanced — and the chairman Pascal Carmin. Not as socially distanced were the parliamentary officials who sat in a cluster at the corner of the chamber and safely out of a camera view. No out of sight of your trusty Callaway Climate Insights correspondent, however.

Airlines are not the only ones seeking exemptions from Europe’s Green Deal using the Covid-19 pandemic as a screen.

Lobbyists may not be converging on Brussels airport and bars of Place du Luxembourg for the moment but they are filling the in-trays of the Commissioners’ Berlaymont Building email accounts.

Plastics producers and car manufacturers are two of the sectors most active. 

EuPC, the lobby group for plastic converters, is using the cover of Coronavirus to lift the ban on the use of single-use plastics. It also wants plastics guidelines that are in the regulatory pipeline to be delayed.

Climate officials in the European Commission, however, told Callaway Climate Insights that  they are taking a dim view of the plastics industry “using the need for PPE” to rail against the ban on single-use plastics.

Auto manufacturer lobbyist Eric Mark Huitema, meanwhile, called the Commission’s work on consultations “crazy.” The car builders were fighting for survival and “don’t have the time to fill in questionnaires,” he submitted.

The actions are shameless, observes Margarida Silva of transparency NGO Corporate Europe Observatory. The big industry groups are “jumping at the opportunity to use the pandemic to recycle old lobbying demands. Quite shamelessly in some cases,” she says.

“A few months back if you said: ‘Actually, environmental protections are not a priority,’ you would have everyone immediately criticizing. Now you can say that the corona crisis means ‘we can wait.’”