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Netherlands' lofty goal: Tax jet fuel

June 20, 2019

The Netherlands wants the EU to place a tax on kerosene-based jet fuel to end what it calls the undertaxation of the aviation industry and to fight climate change. The lofty goal could prove a challenge to implement.

Two people dressed in uniforms of plane staff hold up signs for greener plane travel
Image: Martijn Beekman

The government of the Netherlands led a charge for a Europe-wide tax on jet fuel on Thursday as a two-day aviation conference opened in The Hague.

The Dutch state secretary for finance, Menno Snel, said all forms of transport, including planes, should be taxed in the same way. Currently, no European Union member nation taxes kerosene jet fuel.

The Dutch government also proposed taxing international plane tickets, which is currently done by only six EU countries. 

The initiatives are part of a drive to make the EU carbon neutral by 2050. The European Commission calls aviation one of "the fastest-growing sources of greenhouse gas emissions," one of the major contributors to global warming.

Aviation industry 'underteaxed'

At the conference, Snel cited a study that found taxing kerosene in Europe would cut aviation emissions by 11% and would have no net impact on jobs or the overall economy.

Menno Snel speaks in fron of a screen showing the earth
Snel said that taxing jet fuel would help the planet and not harm the economyImage: Martijn Beekman

Fellow conference speaker Ruud de Mooij, head of the Tax Policy Division at the International Monetary Fund, pointed out that around half the price of a tank of gas goes to taxes used to compensate for emissions, as well as pay for infrastructure projects.

"Airline travel is nearly entirely exempt from all tax, despite having many externalities of its own," he said. "Ending its undertaxation would level the playing field versus other modes of transport."

Activists have said that taxing kerosene would be the fastest way to end cost imbalances favoring air travel over the more heavily taxed car and train travel.

Conference organizers hope that the tax would incentivize people to choose less carbon-intensive modes of transport.

Read more: Swedes switch to trains due to global warming

Jet-fuel tax an EU-wide issue

Around 29 countries were attending the conference in The Hague. It took place as European heads of state were gathered in Brussels to wrangle over key leadership positions in the EU and discuss the bloc's efforts to become carbon neutral by 2050.

Snel said the incoming president of the European Commission would quickly face the topic of the aviation industry's role in climate change.

"The new president of the Commission will have to present plans for the fight against climate change in Europe. It is a no-brainer that the possible contribution of the aviation sector will be put on his agenda in the first week in office," he said.

In a video message at the conference, the EU's current commissioner for economic and financial affairs, Pierre Moscovici, said enacting a kerosene tax in the EU could prove difficult, as all EU member states would have to agree on the measure and there is currently no consensus.

An airplane turbine emits fumes
Kerosene is used in jet fuel while car fuel is petroleum-basedImage: picture-alliance/imagebroker/H. Lippert

However, he welcomed the Dutch initiative and said decisive action was required in order to cut emissions.

France also backs ending tax breaks on jet fuel.

The conference hopes to present its conclusions to the new European Commission when it is sworn in later this year. 

If no EU-wide consensus can be reached, the Netherlands plans to introduce a departing ticket tax of €7.50 ($8.46) as of 2021.

Ticket taxes, which vary greatly among EU members nations, will also be discussed at the conference. The average weighted tax per person in the EU is around €11 euros. In comparison, US ticket taxes stand at around €15 and in Brazil, Mexico and Australia they are as high as €30-40. 

cmb/sms (dpa, Reuters)

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