Taxing airlines could raise €3.7bn a year and help prevent return to pollution growth - new analysis

Europe’s six biggest emitting regions could help prevent a return to airline emissions growth and raise €3.7 billion a year by taxing jet fuel, new analysis shows. [1] An EU study leaked last year said ending airlines’ fuel tax exemption would cut aviation emissions significantly. Now Transport & Environment’s Aviation Tax Tool shows a tax agreed by Germany, France, Italy, Spain, the Benelux and the EU Nordics could cover 59% of pollution from flights within Europe. Such an agreement could be a first step towards an EU levy on airline polluters which, unlike almost all other forms of transport, pay no fuel tax.

The tool shows that in the case of an EU-wide tax, which requires unanimous approval by the EU-27, up to €6.3 billion would be raised. But there are no legal obstacles to European countries taxing jet fuel through multilateral agreements, a new expert study for T&E, published today, confirms. The Aviation Tax Tool analyses how much revenue can be raised and how much pollution covered by the various options for jet fuel taxes. Users can select which European countries would participate in a fuel tax and at which tax rate. The tool also calculates the impact of reforming the EU’s emissions trading system.

Jo Dardenne, aviation manager at T&E, said: “The nonsense of airlines paying no tax on their fuel needs to stop, for the sake of the climate and governments’ coffers. European countries do not need to wait for unanimous EU approval and can agree today to tax airline polluters and prevent emissions from bouncing back.”

While airlines’ emissions will fall this year due to Covid, they are expected to bounce back once the global health crisis has passed. Passenger numbers have repeatedly broken records in the aftermath of global shocks such as the 2008 financial crisis, the September 11 attacks, the Gulf War and the SARS outbreak, industry data [2] shows.

Airlines are currently seeking €32.9 billion in European taxpayer-funded bailouts with no binding environmental conditions attached. T&E said the taxing jet fuel would allow countries to target airlines’ pollution and incentivise the move to greener fuels while helping repair strained public finances.

Jo Dardenne concluded: “Airlines ask for billions in government bailouts but pay little tax themselves. That’s unsustainable. While European governments are pumping unprecedented amounts of money into recovery packages, ending aviation’s tax exemption will open a much needed revenue stream.”

Airlines’ carbon emissions grew 1.5% overall within Europe last year and have risen 27.6% since 2013, far outpacing any other transport mode. Globally, aviation is responsible for 5% of global warming.[3]

Notes to editors:

[1] In this scenario, the tool calculates revenues generated in 2030 based on a tax of €0.33 per litre of fuel burned on flights between Germany, France, Italy, Spain, the Netherlands, Belgium, Luxembourg, Sweden, Denmark and Finland, outermost regions excluded.

https://transenv.eu/taxing-airlines

[2] Boeing analysis of passenger numbers from UN aviation agency ICAO and airlines’ trade association IATA.

Boeing, Commercial Market Outlook 2019–2038, page 19: 

https://www.boeing.com/resources/boeingdotcom/commercial/market/commercial-market-outlook/assets/downloads/cmo-sept-2019-report-final.pdf

[3] Lee, D. et al., 2009. Transport impacts on atmosphere and climate: Aviation. Atmospheric Environment. https://core.ac.uk/download/pdf/30987495.pdf

Learn more:

Tool: How to tax airline polluters?

Briefing and study: Implementing jet fuel taxation in Europe today

Contact the press team

Eoin Bannon
Media Manager
+32 (0)487 717296 
eoin.bannon@transportenvironment.org

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