French air ticket tax set to clash with EU green plans

France will go ahead as of 2006 with a levy on airlines to finance development aid, President Chirac has announced on 29 August. But the tax could upset a separate EU proposal to cap pollution from airplanes.

Plans announced by Chirac to tax airlines as a way to finance development aid may well frustrate measures currently being prepared by the European Commission to cap pollution from airplanes.

The Commission says it hopes to publish a proposal before the end of September to include the aviation sector in the EU cap-and-trade system for greenhouse gases. But with oil prices at an all-time high, the airline industry is already complaining that its economic fundamentals are being challenged.

"A tax for aid will only worsen the situation", the Association of European Airlines said in July this year, adding that the tax would "fly in the face of European competitiveness goals".

The Commission said it is aware of the pressure currently exerted on the airline industry but that the various proposals are being coordinated at European level. "Of course, it's not an easy time for airlines," a Commission spokesperson admitted, indicating that the various issues will come out in the European debate. EU finance ministers have already endorsed the French air ticket tax proposal at a meeting in May.