EU sat on data showing benefits of ending airlines’ tax break – leak

Taxing aviation kerosene sold in Europe [1] would cut aviation emissions by 11% (16.4 million tonnes of CO2) and have no net impact on jobs or the economy as a whole while raising almost €27 billion in revenues every year, a leaked report for the European Commission shows. The reduction in carbon emissions, which cause climate breakdown, would be equivalent to removing almost almost 8 million cars from our roads. European campaign group Transport & Environment said the study, finalised last year but yet to be made public, debunks the industry’s myth that the economy would be irreparably damaged if airlines were required to pay excise duty on the fuel they burn.

Unlike road transport, particularly truckers and motorists, local and foreign airlines in Europe have never paid a single cent of excise duty on the fuel they take on at EU airports. Airlines are not even taxed on domestic flights where, the report shows, taxation barriers were lifted in 2003. In contrast, jet fuel taken on for domestic aviation has been taxed for many years in countries such as the US, Australia, Japan, Canada and even Saudi Arabia.

Bill Hemmings, aviation director of Transport & Environment, said: “Aviation’s decades-long kerosene tax holiday needs to end now. This is essential to fight climate change and will help the millions afflicted by unbearable aircraft noise. Europe’s unique and deplorable status as a kerosene tax haven is indefensible.”

Contrary to the aviation industry’s claims, the leaked study notes that the Chicago Convention [2] “does not explicitly prohibit the taxation of jet fuel”, only the taxation of fuel remaining on board an aircraft upon arrival from another state. T&E says that member states have long had the power to start taxing kerosene, but have failed to do so.

The European aviation sector is heavily undertaxed compared to other regions. Over 20 EU states don’t tax international aviation at all. [3] Whereas in aviation markets in North America, the Middle East and Asia, domestic kerosene is taxed or VAT/sales taxes or ticket taxes apply. Member states have had the option since 2003 to tax kerosene uplifted for flights within Europe by using bilateral agreements. EU finance ministers meet in The Hague 20-21 June for an unprecedented two-day summit on aviation taxation

Bill Hemmings said: “Flying is the fastest way of frying the planet. The kerosene tax exemption subsidises frequent fliers and business travel, fueling runaway emissions and depriving government budgets. It’s high time finance and climate ministers woke up to this reality and put an end to it.”

Transport is Europe’s biggest climate problem, representing 27% of the bloc’s greenhouse gas emissions. Aviation CO2 emissions grew 4.9% within Europe last year – while emissions from all other industries in the ETS fell 3.9%. CO2 from flying in Europe has soared 26.3% in the last five years – far outstripping any other EU emissions source.

Notes to editors:

[1] Imposing an excise duty on all departing flights to all destinations of €0.33/litre, the minimum rate in the 2003 Energy Taxation Directive on all fuel uplifted at European airports to all destinations.

[2] The Chicago Convention (1944) established the UN’s aviation agency, ICAO.

[3] Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

Read more:

Leaked European Commission study and T&E briefing


Contact the press team

Nico Muzi
Communications Director
+32 (0)484 27 87 91 
nico.muzi@transportenvironment.org

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