MIAMI – The European Commission (EC) wants to reduce EU emissions of greenhouse gases by nearly half of those of 1990 levels by 2030. As part of the effort, the bloc is working to revamp energy taxes as part of a package of initiatives.
Since aviation is singled out from EU fuel taxes, so the draft of the Commission’s tax is clearly aimed at the aviation sector.
The plan, to be presented on July 14, would impose a minimum tax on energy items used as aircraft fuel for flights inside the EU continent. Specifically, from 2023, the minimum tax rate on aviation fuel would begin at zero and progressively increase over a 10-year period until it reaches the maximum rate.
The Goal of the Proposal
While the maximum rate has not been specified in the proposed plan as of yet, the catch of the proposal is that during that 10-year period, sustainable fuels such as renewable hydrogen and innovative biofuels would be exempt from the minimum rate.
The main goal is to persuade EU airlines to transition to sustainable aviation fuels (SAF) like e-kerosene in order to reduce the region’s greenhouse gas emissions. However, high prices have impeded their adoption, and they account for less than 1% of Europe’s jet fuel usage.
Cargo-only flights, as well as “pleasure flights” and “business aviation,” would be exempt from the EU’s minimum tax rate. This might include personal use of an aircraft or corporate usage of a plane that is not available for public hire. However, according to the preliminary plan, member states might opt to also tax regular gas used by those aircraft on a national level.
Featured image: Aircraft over Trees. Photo by Sam Willis from Pexels