The European Union countries are considering delaying the introduction of taxes on polluting aviation fuels at the EU level by 20 years, as they seek progress on tax reforms that have been negotiated for years without results, according to a draft document seen by Reuters.
The European Commission has proposed a review of energy taxation rules in 2021 to make them more environmentally friendly, including gradually introducing taxes on fuels for flights within the bloc of 27 countries, which currently escape EU-level taxes.
After countries failed to agree on previous proposals that would introduce a minimum EU tax rate for aviation fuel starting in 2028, they are now considering exempting both aviation and maritime fuels from these taxes for another 20 years, according to a compromise draft.
"As there is currently not enough sustainable alternative fuel (SAF) on the market, taxing aviation fuels would lead to increases in airfare prices and not a general transition from fossil fuels to SAF," the document states.
Only small aircraft, with a maximum of 19 seats, and boats used for "private pleasure craft navigation" would face minimal EU taxes before the 20-year expiration, as stated in the press release.
For other aircraft and vessels, countries may introduce national taxes if they wish - but they are not obligated.
According to the compromise draft, EU countries will reconsider in 15 years whether to start applying minimum EU tax rates for aviation and maritime fuel once the 20-year exemption ends.
Other fuels, such as gasoline used in cars, as well as electricity, already face minimum tax rates in the EU.
The compromise was drafted by Hungary, which holds the rotating EU presidency and therefore leads the negotiations between EU countries until the end of the year. EU country diplomats will discuss the proposal during this month.
Changing EU tax policy is extremely difficult as it requires unanimous approval from EU countries - meaning any government can block it.
Climate change activists, who have long called for an end to the EU tax exemption for aviation fuel, said that a 20-year delay would contradict the EU's goal of achieving net-zero emissions by 2050.
"By the time this tax comes into effect, the world should have reached climate neutrality," said Jo Dardenne, aviation director at the non-profit group Transport & Environment.