Press Release

T&E reaction to European Commission statement on inclusion of aviation in the European Union Emissions Trading System (EU-ETS)

March 07, 2011

The European Commission has today decided on the historical aviation emissions which will be used to calculate the number of aviation allowances to be available from 2012 when the sector is brought into the EU-ETS (1).

T&E calculates that the cost to the aviation sector will be the equivalent of a one-cent per litre tax on aviation fuel which is currently untaxed in the EU. The effect on ticket prices, if not inflated by airlines, should be less than 1 per cent on average.

This negligible impact on fuel costs is in stark contrast to rates of tax for road transport. The average level of road fuel tax in the EU is around 48 cents per litre. The EU also sets minimum levels for road fuel taxes, currently 36 cents per litre for petrol and 33 cents per litre for diesel.

T&E programme manager Bill Hemmings said: “Aviation, by far the most polluting transport sector, still operates in a European-wide fuel and VAT tax haven. Inclusion of the sector in the EU-ETS is no more than a minor first step. And it is no excuse for prolonging the massive subsidy of fuel tax and VAT exemptions. In times of fiscal austerity these subsidies are more irresponsible than ever.”