The Strategist

EU to introduce jet fuel tax

07/05/2021 - 03:49

The European Commission intends to introduce a pan-European fuel tax on airlines, Reuters reported, citing a draft document that was made available to the agency.

Greg Bishop
Greg Bishop
Currently, the EU does not impose a fuel tax on airlines. However, as noted in the document, such a policy is "not consistent with the current climate problems" and the desire of European authorities to reduce harmful emissions. 

On this basis, the European Commission intends to propose a tax on aviation fuel for flights within the EU on 14 July. The new tax would not apply to hydrogen or modern biofuels, which should encourage airlines to switch to greener fuels.

According to the agency, the European Commission wants to introduce a minimum fuel tax rate from 2023, and initially it will be 0%. Over the next ten years, the rate will gradually increase until it reaches the planned level. At the same time, the draft document does not yet mention what the minimum fuel tax for airlines should eventually become.

It is noted that the new tax will not apply to cargo traffic, as well as business aviation. Thus, the new law, if approved by all 27 EU members, will only affect scheduled passenger flights.

European authorities aim to cut greenhouse gas emissions in the EU by 55% by 2030 compared to 1990. Earlier, Frans Timmermans, vice president of the EU's environmental policy and climate change directorate, told the Finanicial Times (FT) that the EU was preparing a new programme to encourage the production of electric cars and combat exhaust fumes. Mr. Timmermans said in particular that the new measures would include tougher CO2 standards for new cars and additional taxes for carmakers that exceed the EU emissions limits.