MEPs push for tax on aviation fuel

The Committee on Regional Policy, Transport and Tourism argued in a meeting last week that a kerosene tax should be introduced to lower ‘unsustainable environmental impacts of air transport’, and to encourage the use of more environmentally-friendly means of transport.

Kerosene tax won the overwhelming support of 49 out of 50 Committee members in its report stage on June 21st and will be on the agenda for the plenary session in the early autumn.

“I think we are definitely looking at a tax on airline fuel, probably not this year, but sometime in the near future,” said Ton Huyssoon, Press Spokesman of the Committee.

The Committee’s report cited a huge increase in air traffic, with passenger numbers set to double over the next 15 years in the European Union, as justification for ‘urgently needed’ legislation to combat “a negative impact on the environment which must be limited.”

Caroline Lucas, Green Party member from the UK, said that because air travel emits a far greater amount of greenhouse gases per person than any other mode of transport, a tax should be introduced to counteract

falling prices which “do not reflect the full environmental costs of aviation”, and which are partly blamed for the growth in air traffic volume.

The MEPs hope that price increases resulting from a tax would encourage “a modal shift from short haul air travel to high speed train.” The report provided evidence of rail being a viable alternative to air

travel; 69% of flights within European airspace in 1997 were under 1000km, and 45% were under 500km. In addition to this, The Intergovernmental Panel on Climate Change (IPCC) has suggested that up to 10% of existing short haul flights in the EU could already be

replaced by existing high speed rail links.

The Committee also concluded that the zero-rated VAT on air tickets, kerosene, and new aircraft is not fair “since it distorts competition among transport modes’ and ‘over-stimulates” aviation”.

Lucas’ report did, however, recognise the logistical problems of imposing a tax for all routes departing from the EU, which would require the renegotiation of many thousands of bilateral agreements.

One alternative policy put forward was a Community-wide environmental charge levied on all airlines for the amount of pollutants emitted on all flights starting or arriving at EU airports, with a 50% reduction on international flights from or to the EU.

However, Mr Huysson stressed that the policy preferred by the Committee on Regional Policy, Transport and Tourism is a kerosene tax because “it would probably be far easier to collect.”

The Transport Campaigner for Friends of the Earth, Simon McRay, was encouraged by the result, but emphasised his preference for the polluter-pays principle. “We have supported a tax on kerosene since 1997. However, we believe that more effective than VAT on fuel would be a charge on the level of greenhouse pollution generated, which applies to the emissions charge problem more effectively than tax, which may reduce consumption but not necessarily improve fuel efficiency or pollution,” he said.

Naturally, the aviation industry is strongly opposed to the move: “Aviation is among the highest taxed forms of transport. The airport tax was introduced by the Government in 1994 in lieu of a fuel tax on aviation, and it has been doubled since then.

“Most importantly, there is no evidence that a tax on aviation fuel would deliver significant environmental benefits- it has not worked with cars,.“ a British Airways spokesperson told edie, adding that “any kerosene tax would have to demonstrate a clear environmental benefit in a cost-benefit analysis.”