EU ministers want global tax on kerosene

An informal meeting of EU transport and environment ministers in Louvain-la-neuve (Belgium) on 15 September 2001, called for a global tax on aviation fuel as a tool to diminish the environmental impact of air travel. EU ministers will try to get the tax on the agenda of the assembly of the International Civil Aviation Organisation, at the end of September.

EU transport and environment ministers call for the abolition of the tax-free status of aviation fuel. According to the EU ministers, the tax could alleviate the environmental impact of air travel, which is among the fastest growing sources of carbon dioxide emissions.

EU ministers said they would push for a tax during the general assembly meeting of the ICAO end of September. Belgian transport minister Isabelle Durant said that if the tax could not be pushed through at the ICAO meeting, the EU might undertake unilateral action, such as abolishing the tax exemption on air fuel used for internal EU flights, or a charge on air freight.

Such a tax is, however, likely to face major resistance from airlines, considering the important economic downturn in the sector which was even worsened by the security concerns raised by the terrorist attacks on the USA.

 

Background

An international agreement currently provides airlines with substantial tax exemptions, particularly from all taxes on aviation fuel, or kerosene.

In November 1999, the European Commission already adopted a Communication on taxing aviation fuel. The Ecofin Council subsequently approved a recommendation that Member States should work together with the International Civil Aviation Organisation (ICAO) on this issue - so far without much success.

On 8 September 2000, the European Parliament approved a report calling for a kerosene tax on all flights departing from the EU (see EURACTIV,

1 September 2000and8 September 2000). In September 2001, the European Commission published a White Paper on European Transport Policy, which aims to break the link between economic growth and transport growth, and to counter the increasing pressures of transport on the environment. One of the issues prepared in this White Paper is the abolition of the tax exemption.

 

Timeline

The International Civil Aviation Organisation's general assembly will take place from 25 September to 5 October 2001, in Montreal. Airline security will dominate the agenda, following the terrorist attacks on the US last week. On 20 September, the Conférence européenne de l'aviation civile (CEAC) meets in Bordeaux to prepare the ICAO meeting.