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-Include high octane/high ethanol Regular Grade fuel in EPA Tier 3 regulations.
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Home » Aviation Fuel, European Union (EU), Opinions, Policy

EU-Wide Taxes on Jet Fuel and Plane Tickets Could Help Plug Budget Gap and Address Transport Climate Impact, Says T&E

Submitted by on March 7, 2018 – 4:44 pmNo Comment

(GreenAir Online)  Taxing jet kerosene and applying a value added tax to plane tickets within Europe could raise €26.5 billion ($32bn) a year that could be used to plug an EU budget gap, reduce labour taxes and help meet climate targets, says a position paper by campaign group Transport & Environment. With the EU currently drafting its post-2020 budget and looking for alternative sources of revenue to make up for the UK’s Brexit departure, this is an opportunity to raise revenue from transport for both EU and national budgets while helping to tackle rising emissions from the sector, argues T&E.

The €150 million ($185m) annual cost of complying with the EU Emissions Trading System does little to address this imbalance, it argues, and points out the ETS directive does not say the scheme can be the only charge on carbon emissions of covered entities. A kerosene tax would also send a price signal to airlines and aircraft manufacturers to increase efficiency, something it says is not being sent by the ETS. “Taxes also can encourage companies to utilise cleaner technologies, promote smarter transport behaviour amongst users and help bridge the price gap with cleaner future fuels,” it adds.

T&E says its position is aligned with 17 eminent European economists – including former Italian prime minister Enrico Letta, ex-WTO head Pascal Lamy and former German finance minister Hans Eichel – who signed an open letter to EU leaders and finance ministers calling for a carbon tax on fossil fuels as well as a kerosene tax and an application of a minimum level of VAT on all airline tickets to help with the post-Brexit EU budget.

Meanwhile, US airlines are fighting a Senate subcommittee proposal to double the $4.50 Passenger Facility Charge cap, an airport tax paid by passengers through their airline ticket.

“Contrary to the Administration’s historic tax reform package that provided tax relief to all Americans, the average traveller still pays 21% of the total cost of a roundtrip airline ticket to the federal government – the same tax bracket designed to discourage use of so-called ‘sin products’,” wrote six airline CEOs in a letter to Transportation Secretary Elaine ChaoREAD MORE

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