Airplane fuel’s tax-free status could soon be grounded after the European Commission agreed on Tuesday (30 April) to register an official petition that calls for an end to kerosene’s exemption.
The Taxing KerosenEU Citizens’ Initiative was successful in lodging a “legally admissible” petition with the Commission, and the EU executive concluded that it is within its area of competence to get involved with environmental and indirect taxation matters.
The petition calls on the Commission to “propose to member states the introduction of a tax on aviation fuel (kerosene)” claiming that “the aviation sector enjoys tax advantages despite being one of the fastest growing sources of greenhouse gas emissions”.
International agreements currently grant airlines their derogation but a revision of the Energy Taxation Directive is seen by experts as a way of ending kerosene’s free ride.
At this stage, EU HQ has not looked into the details of the initiative but if it garners at least 1 million signatures from at least seven different countries over the course of a year, the Commission will be obliged to examine it and respond within three months.
Under the Citizens’ Initiatives scheme, civil society groups can register petitions on a whole range of subjects and there is already a precedent of successful initiatives affecting policymaking. The most notable example to date is new rules on drinking water.
Calls to impose some sort of taxation on aviation have gained momentum lately. Earlier in the year, Belgium and the Netherlands both proposed some sort of tax but left it open as to whether it would be levies on fuel or on tickets, the latter of which are currently exempt from VAT.
Bilateral pacts between member states look to be the most plausible measure currently, as taxation is still an area in which the EU’s hands are tied, although recently the Commission proposed changing the way environmental taxes are managed so that unanimous decisions will no longer be required.
Aviation’s emissions and noise impact are on the up and a January report compiled by Europe’s premier aviation and environmental agencies concluded that improvements to engine efficiency were significantly outstripped by increasing numbers of flights.
[Edited by Zoran Radosavljevic]