EU to propose aviation fuel tax in green policy push

    EU to propose aviation fuel tax in green policy push

    The European Commission has drawn up plans to set a minimum tax rate at EU level for aviation fuel pollution, as it seeks to achieve more ambitious goals in the fight against climate change, according to a Reuters document.

    The European Commission is preparing a comprehensive review of EU energy taxation, as part of a package of measures it will propose on 14 July to achieve a target of reducing EU greenhouse gas emissions by 55% by 1990 levels from 1990 levels. A draft of the Commission’s tax proposal targets aviation, which evades EU fuel taxes.

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    The exemption “is inconsistent with current climate challenges and policies,” the document said, adding that EU tax rules promote fossil fuels over green energy and need to be rewritten to support climate change. objectives of the block.

    The proposal would impose a minimum level of tax at EU level on energy products supplied as aircraft fuel for flights within the EU.

    From 2023, the minimum tax rate for aviation fuel would start from scratch and increase gradually over a period of 10 years, until the full rate is imposed. The draft proposal did not specify what the final price would be.

    Sustainable fuels, including renewable hydrogen and advanced biofuels, will not face minimal EU taxes during this decade. The Commission declined to comment on the draft proposal, which could be changed before publication.

    Presenting proposals can be politically difficult. Changes in EU tax rates require unanimous approval by the 27 EU countries, which means that only one state could reject them. EU countries are responsible for setting national taxes, although Brussels may set minimum rates for the whole.

    The levies will be based on the energy content of a fuel and environmental efficiency, which means that polluting fuels will become more expensive.

    The goal is to encourage airlines to start switching to sustainable fuels, such as electronic kerosene, to reduce greenhouse gas emissions. Consumption of such fuels has been hampered by high costs and they account for less than 1% of jet fuel consumption in Europe.

    Brussels is also expected to propose next month requirements for airlines to use a minimum share of sustainable fuels to boost demand for them.

    The EU minimum tax rate will not apply to cargo-only flights or “leisure flights” and “commercial aviation”. This could include the recreational use of an aircraft or a company using an airplane, not a public lease, to conduct business. Member States could choose to tax the fuel for these flights on a national basis.

    The draft proposal will also introduce minimum tax rates on polluting fuels used for navigation, fisheries and freight within the EU.

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