Brussels aims to levy a tax on aviation fuel to reduce carbon emissions
Brussels will formulate a plan this week to increase taxes on polluting fuels and impose a tax on aviation kerosene for the first time within the EU, a move aimed at putting it at the forefront of global efforts to reduce carbon emissions.
The European Commission will propose amendments to its 15-year-old carbon tax rules to incentivize low-emission fuels and impose taxes on heavily polluting energy used by the aviation and shipping industries. This measure is one of more than a dozen policies announced on Wednesday to ensure that the EU can achieve its goal of reducing average carbon emissions by 55% by 2030.Other measures include extending the EU’s Emissions Trading Scheme, Tough Automobile CO2 emission regulations with one Impose a carbon tax on some imported goods.
The draft legal text of the Energy Tax Directive seen by the British “Financial Times” proposes to gradually increase the minimum tax rate on the most polluting fuels (such as gasoline, diesel and kerosene) used as jet fuel within 10 years. According to the proposed system, zero-emission fuels, green hydrogen and sustainable aviation fuels will not be taxed for ten years.
The “Fit for 55” package puts the EU at the forefront of decarbonization efforts, but these proposals may arouse strong opposition from some governments and the public.
The introduction of environmental taxes may be one of the most politically sensitive measures in the committee’s plan. Unlike most of the new green policies in Brussels, the updated energy tax directive requires the unanimous support of the 27 EU member states to become a reality.
Brussels Economic Commissioner Paolo Gentiloni (Paolo Gentiloni) called reforms “now or never.”
“The paradox is, [the current energy taxation directive] Encourage the use of fossil fuels instead of environmentally friendly fuels. We must change this situation,” Gentiloni said at the G20 Finance Ministers meeting this weekend.
According to the text, the EU’s energy tax rules can be traced back to 2006, and due to a series of exemptions and loopholes for dirty energy in different member states, a system that “facilitates the use of fossil fuels” was created. The directive aims to set a series of minimum tax rates for the entire group’s energy products.
One of the major changes proposed is to end the exemption for heavily polluting fuels such as aviation kerosene. Officials said the draft stated that the new minimum tax rate should be applied to jet fuel used on flights within the European Union, and the specific details have not yet been determined. However, according to the draft, these rules should exempt cargo flights and apply lower rates to non-commercial flights.
Although the kerosene tax has been welcomed by many EU countries, it has also triggered resistance from the aviation industry. Brussels also plans to phase out the free carbon credits provided to the industry under its ETS. With the introduction of tax rules, the gradual abolition of free quotas will greatly increase the pressure on the aviation industry to reduce emissions or pay pollution fees.
The draft stated that a gradual increase in the minimum tax rate during the ten-year transition period will help avoid “double taxation” problems in the maritime and aviation industries, as they may be subject to two forms of carbon dioxide pricing.
The airline group A4E stated that the industry’s new carbon tax is “ecologically and economically counterproductive.” Market-based carbon pricing should be the only major form of carbon dioxide pricing in the industry.
“The kerosene tax within the EU may cause distortions in the European internal market and global competition,” A4E said. “The kerosene tax, which may set the lowest tax rate for intra-EU flights, may have the greatest negative impact because it may open the door to different tax rates within the single market.