Europe's airlines losing the battle against climate change taxes

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Europe's airlines are losing the battle against new aviation taxes and increased costs associated with mitigating their climate change impact. On 14-Jul-2021 the European Commission (EC) announced proposals to reduce net greenhouse gas emissions by at least 55% by 2030 relative to 1990.

Perhaps the most significant proposal for aviation is the ending of jet fuel's exemption from taxation for intra-EU flights. Aviation's free allowances within the EU's emissions trading scheme (ETS) will also be phased out. In addition, a growing proportion of sustainable aviation fuel (SAF) taken on at EU airports will be mandated.

Earlier this year the UK adopted a recommendation by the independent Climate Change Committee (CCC) to include international aviation in its CO2 emissions targets. The CCC's recommendations also include aviation tax reform to constrain growth, no net increase in airport capacity, and encouraging continued online communications in place of business travel.

The UK government is in the process of developing its Aviation Decarbonisation Strategy and the CCC is likely to be influential.

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