European 'environment tax' on aviation?

[Passenger]

On Aviation24.be's homepage, 02 March 2019:

After the Netherlands, Belgium will propose to its European Union partners to introduce a European taxation on commercial aviation, newspaper Le Soir reports this Saturday. It could be either a tax on aviation fuel, currently exempt from any tax, or a VAT on airline tickets.

The discussion will take place at the Council of Environment Ministers next Tuesday, at the request of the new Flemish Minister for the Environment Koen Van den Heuvel. In a note given to its partners, the Belgian delegation recommends “a fair and correct pricing of air transport with regard to its impact on the environment. There is currently no taxation on kerosene or VAT on tickets More environment-friendly modes of transport such as railways are more taxed than air transport.”

The European discussions will allow “the next European Commission to make adequate proposals,” hopes Walloon Environment Minister Jean-Luc Crucke. Belgium is thus part of an initiative launched by France and The Netherlands.

In any case, it will be difficult to go alone, given the competition with neighbouring countries where low-cost airlines could base their aircraft.

The decision not to tax aircraft fuel dates back to World War II. At the time, the United States wanted to do anything to develop civil aviation.
https://www.aviation24.be/airlines/alon ... ir-travel/

Le Soir:
https://www.lesoir.be/209837/article/20 ... s-en-avion

HLN.be:
https://www.hln.be/nieuws/binnenland/be ... ~a20ad962/

AD.nl:
https://www.ad.nl/politiek/kabinet-onde ... ~a5c8a624/

NRC.nl:
https://www.nrc.nl/nieuws/2018/12/07/vl ... h-a3059893
https://www.nrc.nl/nieuws/2018/12/07/vl ... t-a3059863

[Passenger]

I hope our politicians won't forget to charge international shipping too - a bigger and nastier pollutor then aviation.
https://www.eea.europa.eu/articles/avia ... s-in-focus
https://www.transportenvironment.org/wh ... tion-ships
https://en.wikipedia.org/wiki/Environme ... f_shipping

[jan_olieslagers]

No need for an additional tax, they only need to remove exemption.
But it must be done at European level.

NB agree about shipping - I cannot compare the amount of pollution, but surely the rules should apply equally to all modes of transport - as the supporters of rail transport complain today, not without reason.

[sn26567]

Rail transport should not complain. Maybe they pay VAT, but they receive massive subsidies for their infrastructure and public service obligation.

[Passenger]

Rail transport should not complain. Maybe they pay VAT, but they receive massive subsidies for their infrastructure and public service obligation.

On my last invoice from Belgian Rail, there was no mention of the VAT amount.

- - -

Edit: there is 6% VAT on Belgian Rail traintickets indeed, but it's already included in the tariffs.

Belgian Rail is 100% state-owned, VAT goes direct to the state and Belgian Rail gets about 90% of their revenu from state subsidies.
So actually it's not the train user who pays that 6% VAT: they only pay 10% of that VAT. The remaining 90% is paid by the tax payers, no matter if they use railways or not.

[convair]

No need for an additional tax, they only need to remove exemption.
But it must be done at European level.

NB agree about shipping - I cannot compare the amount of pollution, but surely the rules should apply equally to all modes of transport - as the supporters of rail transport complain today, not without reason.

I fully agree, except that the rail users shouldn't complain too much as rail is largely subsidized, at least in Belgium, as explained in a post by passenger hereunder.

[Passenger]

From what I understand, the tax exemption for kerosene in the airline industry dates back to 1944 when the Chicago Convention was adopted, inter alia, to promote international air traffic. The Convention does not apparently mention any exemption for domestic flights.

Indeed. And Article 15 forbits taxes that are not related to a flight itself (use of an airport, use of an aerodrome, use of other facilities). A "pollution tax" therefore is forbitten by the Chicago Convention.

[jan_olieslagers]

I've said so before and I'll keep on saying: there is not a single reason for an additional tax. Anyone insisting on additional tax rulings is only seeking complication, opening more backdoors to more political clientelism. Beware of politicians, they are always seeking their own advantage first!!! A better approach is to reduce rulings and laws; for example by removing exemptions of VAT and accise tax on fuel. On all kinds of fuel, of course, for all purposes.

And if that is contrary to a convention made in 1944, it is high time to re-negotiate that one. The world has changed a lot since 1944, and is bound to change more. The Chicago convention is most important, but it is not carved in stone. (And neither is any forbiting it )

[sn26567]

Today at the A4E Airline Summit held in Brussels, the airlines of course vehemently opposed any tax is being counter-productive and aim to reduce CO2 emissions by other means: more fuel-efficient aircraft, reduction of congestion in the sky, implementation of ICAO's CORSIA, etc.

https://www.aviation24.be/organisations ... itiatives/

https://www.aviation24.be/organisations ... anagement/

[Ge203]

Introducing a tax on kerosene would just kill the few small airlines that are still flying, and really damage the others, just like when the price of the barrel increases! People think that airlines make hundreds thousands of profit on every single flight, but it's mostly a few thousands euros (if not even cost selling...) and that thoses taxes won't hurt them.

People also claim that the industry has to invest on low CO2 emissions aircrafts, but they just ignore - or want to ignore - the fact that newer generation of aircrafts reduce CO2 emissions by 20%.

They just want to think that they aren't responsible of the actual pollution, but the big and bad aviation industry is.

[convair]

Introducing a tax on kerosene ....
...the big and bad aviation industry is.

Nobody is saying ...big and bad aviation industry. No need to play victim here! The aviation industry is now priviledged thanks to the tax exemption on kerosene; that is a fact, and even the aviation fans (including me) can acknowledge that.

And if you think about it, it's not normal you can fly to, say Francfort, at cheaper price than by taking the train. We often talk here about level playing field, so...
Of course any such measure must be taken on the EU level, and provide for ways to counter any loophole attempt, like filling up outside the EU, unless it's declared to the ad hoc authorities and the corresponding tax is paid on arrival on EU territory.

[Conti764]

Well, if they are really serious about leveling the playing field between plane and train, it will cost fortunes. In theory you could take a train from Brussels to let's say Madrid and an HST might reach speeds up to 250 km/h on a regular base, but in reality it's not realistic at all... Apart from many lines not adapted to those speeds, you have trains stopping at different stations, congestion on many lines,... So when in theory you might reach Madrid within 4,5 hours or so, it will still take an entire day or more still putting the train on a major disadvantage to planes... So imposing a tax on aviation wouldn't solve anything but would rather put yet another nail in some airlines coffins... And for Belgium it would mean another pile of money to be thrown away in a bottomless pitt.

Although I do agree that flying between AMS, BRU, CDG, CGN, FRA or even LHR to name a few is irresponsible and ridiculous.

Would fewer flights within Europe be an advantage to BRU? Less hub and spoke flying to different bigger hubs and more direct flying to more international destinations.

Making intra-European flight, let alone <500 km-flights less attractive or even impossible might be benificiary to SN as well since it would mean EW actually becomes more or less obsolete accept for LC long haul...

[Ge203]

I’m not against a tax on kerosene, but the whole aviation industry has been build on that exemption. It would be very hard to for the airlines to add that to their costs.
And I wasn’t playing the victim, just saying that the impact of the aviation on the environnement is relatively small compared to others, but it’s easy to attack this industry because a lot of people think it’s the most polluting, even if you confront them with numbers.
I totally agree with you on the second part. I think it’s more about making it more interesting to take the train between Brussels City and FRA/AMS/CDG/LHR with a codeshare (and of course check-in in Brussels). Nowadays, it’s cheaper, faster and stress-free to take the plane to connect those cities. That’s the problem. We’ll never be able to connect every city in Europe with an HSL.

[convair]

I’m not against a tax on kerosene, but the whole aviation industry has been build on that exemption. It would be very hard to for the airlines to add that to their costs.
And I wasn’t playing the victim, just saying that the impact of the aviation on the environnement is relatively small compared to others, but it’s easy to attack this industry because a lot of people think it’s the most polluting, even if you confront them with numbers.
I totally agree with you on the second part. I think it’s more about making it more interesting to take the train between Brussels City and FRA/AMS/CDG/LHR with a codeshare (and of course check-in in Brussels). Nowadays, it’s cheaper, faster and stress-free to take the plane to connect those cities. That’s the problem. We’ll never be able to connect every city in Europe with an HSL.

Glad to read were're on the same page. And exemption of the kerosene tax should be done progressively and sensibly, imho, e.g. being implemented during a period of low price fuel.

[SR20]

The European Commission is drafting an overhaul of EU energy taxation, as part of a package of measures it will propose on July 14, to meet a target to reduce EU greenhouse gas emissions by 55% by 2030, from 1990 levels.

The proposal would impose an EU-wide minimum level of tax on energy products supplied as aircraft fuel for flights within the EU.

The minimum EU tax rate would not apply to cargo-only flights or to “pleasure flights” and “business aviation”.

https://www.euractiv.com/section/altern ... licy-push/

[Passenger]

News article on the homepage:
Belgium might introduce new environmental taxes on the airline sector:
https://www.aviation24.be/airlines/belg ... ne-sector/

As part of a future revision of the tax code, the High Council of Finance (HCF) of Belgium is looking, in a 56-page report dated July 2021, for new revenue intended to finance tax cuts affecting labour.

The High Council of Finance believes “that the budgetary cost of the base scenario can be partially recovered by the introduction of environmental and climate taxes“. The HCF suggests three measures affecting the aviation sector, which currently benefits from many tax exemptions:

1. It indicates in its report that “the absence of excise duties on kerosene for the aviation sector and the absence of VAT on the sale of plane tickets are not justified by economic or social reasons and even less for ecological reasons.” The increase of the excise duty on jet fuel equivalent to diesel and gasoline would bring in 1.15 billion euros per year to the State coffers.

2. A VAT of 6% on plane tickets would allow Belgium to garner 202 million euros per year.

3. The HCF is also putting on the table a third measure: a boarding tax on air travel of 10 euros per plane ticket for departures (transfer and transit included), with an estimated revenue of 142 million euros for the State.

In total, the aviation sector could thus contribute 1.5 billion euros to the State budget of Belgium.

The HCF is of the opinion that Belgian support for European and international initiatives in this field is highly desirable; indeed, unilateral initiatives by Belgium would harm the competitive position of its airline industry. However, this objection does not apply to the introduction of a boarding tax, since this already exists in several neighbouring countries.

Links NL:
press release 23/07/2021:
https://www.hogeraadvanfinancien.be/nl/ ... hervorming
Report - pdf NL:
https://www.hogeraadvanfinancien.be/sit ... 021_07.pdf

Links - FR:
press release 23/07/2021:
https://www.conseilsuperieurdesfinances ... me-fiscale
Report - pdf FR:
https://www.conseilsuperieurdesfinances ... 021_07.pdf