EU countries dilute fuel tax hike as green anger mounts

The legislation notes member countries “should be allowed to apply a preferential treatment to the taxation of certain activities … important to the functioning and the security of the member state,” such as maritime patrols and military flights.

Another caveat would allow member countries to set a zero tax rate on civilian air travel to and from airports “located on islands with no road or rail link with the main continental landmass of the EU.” The measure, which would apply to member countries like Cyprus and Malta, would be in effect for the next 10 years, with an additional five-year transition period after that.

To climate activists, these compromises are simply loopholes that undermine the point of updating the EU’s energy tax rates to match its climate ambitions.

“One of the biggest challenges with the revision of the Energy Taxation Directive was to get rid of the unfair tax privileges that some sectors benefited from,” said Jo Dardenne, an expert on aviation at the Transport & Environment green campaign group. “But every new compromise is coming with a set of new exemptions. There are significant loopholes in the text which mean that most of the aviation fuel remains untaxed.”

Even the most polluting parts of the sector aren’t facing the full force of the environmental reforms, Dardenne argued. While private jet owners and those chartering aircraft would have to pay tax on their fuel under the rules, they are expected to pay the same amount of tax that the average motorist pays when filling up at the pump. 

“That seems unfair given private jet flyers’ disproportionate climate impact and wealth,” she added.