The EU should fill its post-Brexit budget gap with new revenues from taxing transport, which is Europe’s biggest emitter of greenhouse gases, former Italian prime minister Enrico Letta, ex-WTO head Pascal Lamy, former finance minister of Germany Hans Eichel and 14 other economists have told EU leaders. In advocating a green tax shift, they called for a higher minimum tax on road diesel, VAT on airline tickets for the first time and taxing aviation kerosene which is currently exempt. Sustainable transport group Transport & Environment welcomed the letter, citing its own analysis that such a green tax shift would generate additional revenues of more than €50 billion a year which would allow for the income tax burden to be reduced.
The EU is negotiating trade deals with Mercosur (Argentina, Brazil, Paraguay and Uruguay), Indonesia, and soon Malaysia, These trade deals represent a risk for the EU’s sustainable transport plans. All mentioned countries are producers and exporters of crop-based biofuels, especially from palm and soybean oil that have higher overall emissions than fossil diesel. All ongoing negotiations include chapters on energy and raw materials.
The European Parliament will vote next week on whether to strengthen the proposal for Europe’s key climate law, the so-called Effort Sharing Regulation (ESR) – or ‘Climate Action Regulation’, the name agreed by the environment committee. MEPs will be asked to back a more ambitious starting point than the European Commission’s proposal and to close some loopholes to ensure member states actually reduce their emissions.
In November 2016 the Commission presented its new proposal for a Renewable Energy Directive in the 2021-2030 period. The main elements of the proposal on transport are to reduce the cap on food and feed-based biofuels to 3.8% in 2030 and to establish a mandate on fuel suppliers, requiring them to blend 6.8% of advanced fuels by 2030 (T&E’s position on biofuels in the RED can be found here).
The Effort Sharing Regulation (ESR) defines the carbon budget for EU member states for the non-traded sectors (surface transport, buildings, agriculture, small industry and waste) until 2030. If the ESR’s headline goal of -30% compared to 2005 is undermined through loopholes, the ESR will not lead to real-world emission reductions in those sectors. This FAQ is aimed at bringing clarity to one element being discussed during the negotiations: the ESR Safety/Early Action Reserve.
There are growing calls for a green tax shift to the transport sector, which would help fill a gap in the EU’s budget after the UK leaves. A T&E analysis has found new measures such as a carbon tax on motor fuels, aviation kerosene duty, and ending the VAT exemption for flights within and from Europe would raise more than €50 billion annually. And last week, as EU leaders discussed the looming gap, 17 eminent economists rowed in behind the idea, calling it a ‘once in a decade opportunity’ to create a fossil-fuel contribution to the EU budget.
Transport is Europe’s biggest climate problem, representing 27% of the bloc’s greenhouse gas emissions. If Europe is to meet its climate targets and avoid the severe impacts of climate change, additional action is needed to tackle emissions from the transport sector. Meanwhile, the EU is drafting the post-2020 budget with a proposal expected in May 2018. The annual €10-14 billion gap that will be left as a result of the UK’s departure from the EU has triggered debate on alternative sources of revenue for the EU budget. This position paper outlines how a green tax shift has a key role to play in tackling transport emissions and addressing a gap in the EU's budget post-2020.
Environmental destruction costs human lives too. On 8 December an NGO friend phoned me up with the shocking news that Colombian community leader and land claimant Hernán Bedoya had been assassinated, reportedly by paramilitary groups. It was a tragic reminder that campaigning to stop deforestation is as much about protecting the livelihoods and homes of the communities that have been living in those habitats for centuries as it is about combating climate change and protecting endangered species.
The continued use of high-emitting biofuels to power Europe’s cars and trucks is up for decision in the European Parliament next week. In deciding the Parliament’s position on reform of the Renewable Energy Directive, MEPs will be asked whether European drivers should be obliged to burn massive quantities of food crops in their fuel tanks until 2030.
Transport has taken over from power generation as the biggest source of greenhouse gas emissions in the US – and the situation is likely to get worse as the Trump administration plans to weaken emissions standards. T&E says the policy will only damage US carmakers. Transport has been the single biggest emitter of greenhouse gases in Europe since 2016.