“Au Revoir” to Aviation Fuels Exemption

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In an effort to urge the aviation industry to use more clean-burning fuels, a draft from the European Commission proposes a minimum tax within the EU on polluting aviation fuels, specifically on energy products supplied as aircraft fuel for flights within the EU. This means aviation fuels would no longer be exempt from taxation in the EU. The new tax would start in 2023 and be gradually increased over a decade – the final rate has not yet been set.

With dirtier fuels being more expensive, it is hoped that European airlines will be more likely to adopt more sustainable fuels like e-kerosene, which are currently considered to be too expensive. The new minimum tax looks to be applied mostly to commercial flights.

The measure, and an overall reinvention of energy taxation in the Union, are part of the EU’s broader “Fit for 55” package, which aims to reduce greenhouse gas emissions by 55% by 2030 (using 1990 GHG emissions as a baseline). The full package is set to be released by the European Commission on 14 July.

Source: Reuters